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Precision Drilling president and CEO Kevin Neveu.

TODD KOROL/REUTERS

Precision Drilling Corp. is reporting profit of $83-million, or 29 cents per diluted share, for the three months ended Sept. 30.

That compares to net earnings of $56-million, or 20 cents per diluted share, for the same quarter of 2010.

The figures include a tax settlement with the Canada Revenue Agency and an Alberta provincial income tax reassessment which decreased net earnings by $26-million.

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The Calgary-based company also says a foreign exchange gain raised net earnings by $25-million.

Precision says although wet weather impaired activity in Canada during the first part of the third quarter, activity levels increased rapidly in August and September.

Precision is Canada's largest oilfield services company, with a presence in the United States and Latin America.

With producers chasing unconventional oil and gas reservoirs throughout North America, demand has been high for the powerful, high-tech drilling rigs Precision has in its fleet.

Earlier this month, Precision announced it would build eight new rigs, bringing its total 2011 program to 38 rigs. Of those rigs, Precision expects to deliver 18 in 2011 and the remaining 20 next year.

Precision expects to spend $880-million this year on its capital program, with another $300-million carried forward into 2012.

The company has grown through a series of acquisitions, large and small, over the past few years.

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In late 2008, Precision gained a big U.S. presence through a $2.1-billion deal with Grey Wolf.

In September, Precision announced the acquisition of Axis Energy Services holdings, a private company that provides drilling services to the western Canadian oil and gas industry.

In March, Precision announced the purchase of two related Texas companies – Drake Directional Drilling LLC and Drake MWD Services LLC – that operate in Texas, Louisiana, Oklahoma and Colorado.

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