Precision Drilling Sees Canadian Rig Demand Jump 22% on Strong Oil Prices

Precision Drilling Sees Canadian Rig Demand Jump 22% on Strong Oil Prices

Precision Drilling Corp. posted an 11% revenue increase to $452.8 million for the quarter ended June 30, with Canadian drilling activity climbing 22% year-over-year, the Financial Post reports.

Market Impact

The Calgary-based driller averaged 61 active rigs in Canada during the quarter, outpacing the sector’s overall 16% average increase, according to the company. CEO Carey Ford attributed the demand to “improving producer economics and expanded market access,” pointing specifically to condensate and heavy oil basins as areas of strength. Ford said he expects activity in the back half of the year to stay above prior-year levels.

In the US, Precision ran 35 active rigs, up slightly from 33 a year earlier, as North American oil prices averaged above $90 a barrel during the quarter. The gains were tied to the US-Iran conflict, which drove up energy demand and oil prices amid concerns over attacks on infrastructure and transportation routes.

The picture was different overseas. Precision’s international business, which includes rigs in Saudi Arabia and Kuwait, reported lower revenue and margins as the conflict complicated drilling operations. The company did secure a new five-year contract for an existing Kuwait rig and expects its international rig count to grow from seven to eight by mid-2027. Precision also closed its Dubai office, taking a $3 million restructuring charge, and said the move would cut costs while putting leadership closer to customers in Saudi Arabia and Kuwait.

Separately, Precision disclosed that the Canada Revenue Agency issued a reassessment notice for the 2018 tax year, denying certain deductions. CFO Dustin Honing said the company plans to contest the notice, with a maximum potential liability of $155 million plus interest if the CRA prevails, though he called that outcome “highly unlikely.” The company posted a net loss of about $1 million for the quarter, versus a $16 million profit a year earlier, driven largely by an $11 million depreciation expense.

What It Means for Subcontractors

• Drilling-support trades in Canada’s condensate and heavy oil basins, including well testing, fluid hauling, and rig-up crews, should see sustained work into the second half of the year given Ford’s guidance that activity will stay above 2025 levels.
• US-based crews serving Precision’s 35 active rigs can expect steady demand tied to oil prices holding above $90/bbl, but should watch for volatility if Middle East conditions ease and prices soften.
• Contractors working Precision’s Kuwait operations should note the rig count is expected to rise from seven to eight by mid-2027 under the new five-year contract, a longer-term signal for regional service planning.
• Vendors tied to Precision’s Dubai office should confirm invoicing and contract points of contact have shifted to teams now based in Saudi Arabia and Kuwait following the office closure.