Precision Drilling Meets 2023 Debt Repayment and Share Repurchase Targets and Provides Capital Allocation, Financial and Operational Updates

CALGARY, Alberta, Jan. 05, 2024 (GLOBE NEWSWIRE) -- This news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release.

Precision Drilling Corporation (“Precision” or the “Company”) (TSX:PD; NYSE:PDS) is pleased to provide a series of positive announcements including: 1) 2023 debt repayment and year-end liquidity update; 2) capital allocation framework update; and 3) financial and operational update.

2023 Debt Repayment and Year-End Liquidity Update

Precision reduced total debt by $152 million in 2023, meeting its debt reduction goal. As at December 31, 2023, Precision’s outstanding debt obligations included:

• US$273 million – 7.125% unsecured senior notes due January 15, 2026
• US$400 million – 6.875% unsecured senior notes due January 15, 2029
• US$28 million of real estate credit facilities
  

Precision ended 2023 with a cash balance of approximately $55 million and total liquidity of approximately $615 million.

Capital Allocation Framework Update

Over the past two years, we have reduced our debt by $258 million and lowered our Net Debt to Adjusted EBITDA leverage ratio¹, which we expect to be below 1.5 times as at December 31, 2023. Precision is well on track to exceed its long-term debt reduction target of repaying $500 million between 2022 and 2025 and reaching a sustained Net Debt to Adjusted EBITDA leverage ratio of below 1.0 times by the end of 2025.

During 2023, Precision returned $30 million to shareholders through share repurchases under our Normal Course Issuer Bid and as at December 31, 2023, had 14,336,539 shares outstanding. 

With a robust free cash flow outlook, we plan to improve our capital returns to shareholders in 2024 by increasing our debt reduction and share buyback allocations. In early February, we will provide specific capital allocation plans and targets for 2024.

_{¹ Net Debt to Adjusted EBITDA leverage ratio is a Non-GAAP measure. Please refer to page 41 of Precision’s Annual Report for the year ended December 31, 2022 for more information.}

Financial and Operational Update

Financial Results

Precision intends to release its 2023 fourth quarter results before markets open on Tuesday, February 6, 2024. These results will include contributions from the acquisition of CWC Energy Services Corp. (“CWC”), which closed on November 8, 2023. Fourth quarter drilling field margins in Canada and the U.S. are expected to align with previous guidance. With a closing share price of $71.96 on December 31, 2023, share based compensation expense for the fourth quarter and year-end 2023 is expected to be approximately $12 million and $34 million, respectively, which also aligns with previous guidance. Following the closing of the CWC acquisition in the fourth quarter, we added 18 high-quality drilling rigs to our fleet and decommissioned 27 legacy rigs. Accordingly, we expect to recognize a non-cash asset decommissioning charge of approximately $11 million in 2023.