Precision Drilling Corporation (PDS) CEO Kevin Neveu on Q2 2020 Results - Earnings Call Transcript

Precision Drilling Corporation (NYSE:PDS) Q2 2020 Earnings Conference Call July 23, 2020 2:00 PM ET

Company Participants

Dustin Honing - Manager, IR and Corporate Development

Kevin Neveu - President and CEO

Carey Ford - SVP and CFO

Conference Call Participants

Kurt Hallead - RBC

Taylor Zurcher - Tudor, Pickering, Holt

Waqar Syed - ATB Capital Markets

Ian Gillies - Stifel

Jeff Fetterly - Peters & Co.

John Daniel - Daniel Energy Partners

Blake Gendron - Wolfe Research

Operator

Ladies and gentlemen, thanks for status via way of means of, and welcome to the Precision Drilling Corporation Second Quarter 2020 Results Conference Call. At this time, all participants' traces are in a listen-simplest mode. After the speakers’ presentation, there may be a question-and-solution session. [Operator Instructions]

I might now like at hand the convention over on your speaker nowadays, Mr. Dustin Honing, Manager of Investor Relations and Corporate Development. Thank you. Please cross ahead, sir.

Dustin Honing

Thank you, Daniel, and correct afternoon, everyone. Welcome to Precision Drilling's 2nd region 2020 profits convention name and webcast. Participating nowadays on the decision with me are Kevin Neveu, President and Chief Executive Officer; and Carey Ford, Senior Vice President and Chief Financial Officer.

Through our information launch in advance nowadays, Precision suggested its 2nd region 2020 effects. Please observe those monetary figures are in Canadian dollars, until in any other case indicated. Some of our feedback nowadays will talk over with non-IFRS monetary measures, along with EBITDA and working profits. Please see our information launch for extra disclosure on those monetary measures.

Our feedback nowadays will consist of forward-searching statements concerning Precision's destiny effects and prospects. We warning you that those forward-searching statements are situation to some of dangers and uncertainties that would motive real effects to vary materially from expectations. Please see our information launch and different regulatory filings for extra records on forward-searching statements and those chance factors.

Carey will start nowadays's name via way of means of discussing our 2nd region monetary effects. Kevin will then observe via way of means of supplying an operational replace and outlook.

With that, I'll flip it over to you Carey.

Carey Ford

Thanks Dustin.

I'd first want to cowl numerous of the price saving and coins renovation steps taken via way of means of the business enterprise to confront the pointy lower in pastime skilled our sector. In March we decreased staffing tiers, applied earnings discounts during the business enterprise, closed on worthwhile enterprise traces, decreased CapEx, paused our proportion repurchase application and basically removed all discretionary spending. We put together for an unheard of drop in pastime tiers that in the end materialized at some point of the second one region. We incurred an additional $6 million in severance and restructuring expenses at some point of the second one region and assume the modifications to generate an additional $four million in financial savings yearly from what we communicated in April.

Last region, we furnished steerage of a 30% discount in constant price made out of overhead and G&A and we now assume the discount to be 35%. We assume coins financial savings for the 12 months to now be up to $one hundred fifty million as compared to the preceding steerage of over $a hundred million.

Furthermore, we assume to exceed the $30 million discount in annualized G&A goal we furnished in April. Cost discount and coins renovation will stay priorities during our business enterprise.

Additionally, Precision has been taking part withinside the Canadian Employment (sic) [Emergency] Wage Subsidy Program which we talk over with as CEWS. This Canadian authorities application helps monetary pastime in all sectors of the economic system and has allowed us to keep some of positions inside our business enterprise via way of means of offsetting salary cost with subsidies. We assume to take part on this application at comparable tiers to the stability of the 12 months.












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