CALGARY - Precision Drilling Corp. (TSX:PD) said Monday it is increasing its 2014 capital spending by about 23 per cent and that it's been awarded several new international contracts.
The company, which provides drilling and other services to the oil and gas industry, says its budget for this year will be $634 million — a $119 million increase from its forecast released just last month.
The new plan includes $320 million for expansion capital, $195 million for sustaining and infrastructure spending and $119 million to upgrade existing rigs.
This year, Calgary-based Precision plans to deliver six new build rigs to Canada, two to the United States and three to international locations. Another one will only be completed once the company secures a firm customer contract.
Precision said it's signed a multi-year contract to deliver a new rig to the Middle East in the fourth quarter of 2014. It has also inked multi-year contracts for six drilling rigs in Mexico.
"These new contracts will grow our share of the technically challenging portion of the market and create scale benefits in our core geographic operating regions," CEO Kevin Neveu said.
He added that Precision is also encouraged by greater customer demand it's seeing in North American markets, such as the Permian Basin in West Texas and liquefied natural gas-related activity in Western Canada.
"Our footprint and customer base affords us excellent opportunities to invest capital and our focus remains on selecting the best projects producing returns on the capital we deploy and returning value to shareholders in the form of share price appreciation and dividends," said Neveu.