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Precision Drilling repays total of C$170 million of debt in 2020
By Taylor Fox
New York, Jan. 5 – Precision Drilling Corp. repaid a total of C$170 million of debt in 2020, following additional open market repurchases of its senior notes in the fourth quarter, according to a news release.
As of Dec. 31, Precision had C$286 million of 7¾% senior notes due Dec. 15, 2023, C$263 million of 5¼% senior notes due Nov. 15, 2024 and C$348 million of 7 1/8% senior notes due Jan. 15, 2026 outstanding.
The repayments exceeded the high end of the company’s 2020 annual targeted range of C$100 million to C$150 million.
The company has paid down C$550 million of debt three years into its long-term debt reduction plan, exceeding the high end of each year’s annual targeted debt reduction range.
As a result of its further reduction of absolute debt levels, the company anticipates its forward run-rate of cash interest costs from debt to be C$85 million.
Precision said it increased its long-term debt reduction target to C$800 million from C$700 million for the years 2018 through 2022, requiring C$250 million of debt reduction over the next two years to achieve the revised target.
The target increase is due to the accelerated debt reduction achieved and the company’s forward free cash flow outlook, further strengthened by its reduced fixed cost structure and lower interest expense run-rate.
Precision anticipates a reported 2020 year-end cash balance of C$105 million to C$110 million, C$30 million to C$35 million higher than year-end 2019, which, combined with availability under its credit facilities, gives it access to over C$700 million of total liquidity entering 2021.
Precision Drilling is a Calgary, Alta., provider of services to the oil and gas industry, including contract drilling rigs, directional drilling services, well service and snubbing rigs, camps, rental equipment and wastewater treatment units.
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