S&P views Precision Drilling positively

S&P said it revised its outlook for Precision Drilling Corp. to positive from stable and affirmed the B+ ratings on the company and its senior unsecured notes but improved the recovery rating to 3 from 4.

“Precision lowered its absolute debt by close to C$800 million over the past five years (about a 55% reduction), and we project further debt reduction from free cash flows through 2025. In our view, the lower gross debt levels will enable the company to sustain improved credit measures through the commodity cycle,” the agency said in a press release.

S&P said it expects Precision to continue repaying debt and delivering improved credit measures over the next 12 months.

The agency forecasts the company’s EBITDA will hover at relatively healthy levels of about C$525 million-C$530 million. “We also forecast S&P Global Ratings-adjusted FFO to debt of C$450 million in 2024 and assume relatively flat levels in 2025.”

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