Precision Drilling Wins With Grey Wolf Addition (PDS, BJS, HAL, WFT)

Precision Drilling Trust (NYSE:PDS) reported net first quarter 2009 earnings per common unit of about $0.26, off 62% from the same period a year ago. Revenues grew almost 31%, from $277 million to $362 million. (Amounts converted from Canadian dollars at US$1=CDN$1.23832.) Analysts had been expecting earnings per unit of $0.36.

The revenue growth resulted from Precision’s acquisition of driller Grey Wolf, which was completed in December 2008. That acquisition was credited with softening the blow of “the worst winter drilling season in Canada for the past 17 years.”

Earlier this week, BJ Services Co. (NYSE:BJS) reported very weak results, following so-so reports from both Halliburton Co. (NYSE:HAL) and Weatherford International Ltd. (NYSE:WFT). And also earlier this week, Precision announced a new financing deal to reduce the interest on its borrowing to purchase Grey Wolf. That deal caused the company’s unit price to drop 11% when it was announced on Monday.

Precision common units closed at $4.19 yesterday and shares are up 1% so far at $4.23. The company’s 52-week range is $2.00-$28.59.

Paul Ausick
April 22, 2009