Precision Drilling provides 2025 outlook

The company stated, “The long-term outlook for global energy demand remains positive with rising demand for all types of energy including oil and natural gas driven by economic growth, increasing demand from third-world regions, and emerging energy sources of power demand. Oil prices are constructive as OPEC+ continues to honour its production quotas, producers remain committed to returning capital to shareholders versus increasing production, and geopolitical issues continue to threaten supply. In Canada, the Trans Mountain pipeline expansion, which became operational in May of 2024, combined with the imminent startup of LNG Canada are projected to provide significant tidewater access for Canadian crude oil and natural gas, supporting additional Canadian drilling activity. In the U.S., the next wave of Liquefied Natural Gas export terminals is expected to add approximately 11 bcf/d of export capacity from 2025 to 2028, supporting additional U.S. natural gas drilling activity. Coal retirements and a build-out of artificial intelligence data centers could provide further support for natural gas drilling. Our Canadian drilling activity continues to be robust in 2025 and we currently have 81 rigs operating and expect this activity level to continue until spring breakup. Our Super Single fleet is near full utilization as heavy oil customers are benefiting from improved commodity pricing and a weak Canadian dollar. Our Super Triple fleet, the preferred rig for Montney drilling, is also nearly fully utilized, and with the expected startup of LNG Canada in mid-2025, rig demand could exceed supply. Overall, we expect our Canadian drilling activity to be up year over year with near full utilization of our Super Series rigs, which should support day rates and increase demand for term contracts as customers secure rigs to ensure fulfillment of their development programs. The uncertainty introduced by potential U.S. tariffs on Canadian oil and gas exports, has been tempered and we have not experienced any change in customer demand or their longer-term plans. In the U.S., we currently have 34 rigs earning revenue, which has been relatively consistent since mid-2024. Drilling activity growth remains constrained as producers continue to focus on shareholder returns rather than growth, while volatile commodity prices, customer consolidation, and drilling and completion efficiencies have restricted activity growth. If commodity prices remain stable and around today’s level, we expect drilling demand to begin to improve in the second half and gain momentum through the remainder of 2025 as new LNG export capacity is added and customers seek to maintain or possibly increase production levels. Internationally, we have eight rigs working on term contracts, five in Kuwait and three in the Kingdom of Saudi Arabia. The majority of these rigs are under five-year term contracts that extend into 2027 and 2028, providing predictable cash flow for the next few years. We continue to bid our remaining idle rigs within the region and remain optimistic in our ability to secure rig reactivations. As the premier well service provider in Canada, the outlook for this business remains positive. We expect the Trans Mountain pipeline expansion and LNG Canada to drive more service-related activity, while increased regulatory spending requirements are expected to result in more abandonment work. Customer demand should remain strong, and with continued labour constraints, we expect firm pricing into the foreseeable future.”