Between volatile oil prices, an unprecedented global health crisis and moving targets on global output quotas, the head of Precision Drilling Corp. said there’s no shortage of headwinds for the oil and gas sector.
“The list of things that keeps me awake at night just keeps growing,” said Kevin Neveu, president and chief executive officer of Precision Drilling, in an interview Friday.
“Even with the global pandemic and the OPEC meltdown (in 2020), we did a great job managing our business. We adjusted our costs down and stayed cash-flow positive. I think we’ve shown we’re a very durable company.”
Oil field activity is at roughly half that of pre-pandemic levels, said Neveu. Precision is operating 40 rigs in the U.S., whereas in total, the industry is running about 500 rigs, he said.
Neveu said activity will ramp up in the second half of 2021 to meet demand, adding that he hopes to gain more market share because roughly 100 rigs need to be brought back online in order to get back to balance.
If that proves true, Precision and its peers will have to go on a hiring spree, but that could prove challenging.
“A lot of people are still concerned about moving around,” said Neveu.
“In Western Canada right now, in particular, trying to recruit for field operations has been a real challenge as we come out of this pandemic.”
Neveu acknowledged young workers may be wary given that there has been a lot of disruption in the sector of late, and that many are still apprehensive about relocating, but added that the Canadian government’s aid programs are discouraging workers from re-entering the workforce.
Precision is looking to add 300 to 400 workers within the next few weeks, and then up to an additional 1,000 workers going into next year, according to Neveu.