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Precision Drilling to Sell Trucking Assets, Focus on Core Ops

The largest drilling contractor of Canada, Precision Drilling Corporation (PDS1 Snapshot Report2) declared that it has entered into an agreement with oilfield hauling and rentals company, Aveda Transportation and Energy Services Inc., to divest a part of its trucking operations. The closure of the deal is expected on Jul 1.

The assets under sale include trucks and other associated assets that are used to move drilling rigs for Precision Drilling and other third parties based in Texas and New Mexico.

Precision Drilling s management stated that the company intends to use the funds generated from divesting these non-core assets to facilitate growth of its core operations in Canada, the U.S. and other regions abroad. The company also believes that the trucking assets will be put to better use in an organization dedicated to enhance trucking services.

Calgary, Canada-based Precision Drilling primarily provides drilling services to customers by its technologically advanced and versatile drilling fleet. The company also offers coil tubing services.

Earlier in the month, Precision Drilling closed a $400 million notes offering. The notes, expected to mature in 2024, were issued to a small number of select investors and carried an interest of 5.250%. The company intends to use the proceeds from this offering for manufacturing new rigs and for other corporate purposes.

Precision Drilling currently has a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players in the oil and gas drilling industry like Pioneer Energy Services Corporation (PES3 Snapshot Report4), Nabors Industries Ltd. (NBR5 Analyst Report6) and Patterson-UTI Energy Inc. (PTEN7 Analyst Report8). Pioneer Energy Services sports a Zacks Rank #1 (Strong Buy), while Nabors and Patterson-UTI Energy carry a Zacks Rank #2 (Buy).

References

  1. ^ PDS (www.zacks.com)
  2. ^ Snapshot Report (www.zacks.com)
  3. ^ PES (www.zacks.com)
  4. ^ Snapshot Report (www.zacks.com)
  5. ^ NBR (www.zacks.com)
  6. ^ Analyst Report (www.zacks.com)
  7. ^ PTEN (www.zacks.com)
  8. ^ Analyst Report (www.zacks.com)


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