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Energy and Resources Precision Drilling writes down assets, says 2016 spending to plunge

File photo of a worker operating the controls for a spinning drill at a Precision Drilling operation in Alberta.

Norm Betts/Bloomberg

Precision Drilling Corp. is writing down the value of its assets and planning for a much smaller capital spending budget next year, the company said Thursday as it reported a 38 per cent decline in third-quarter revenue.

The Calgary based company reported an $87-million net loss, or 30 cents per share, for the three months ended Sept. 30, as revenue dropped to $364-million from $584.5-million in last year's third quarter when the oil and gas industry was booming.

Precision Drilling said it has taken $74-million million of asset writedowns, cutting 25 cents per share from its net earnings, and that it will reduce capital spending substantially in 2016.

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It has cut its 2015 capital spending plan to $531-million, down $15-million from the previous estimate in July, and is projecting only $180-million in capital spending for 2016.

This year's third-quarter loss contrasted with a net profit of $52.8-million or 18 cents per share in the third quarter of 2014, which was prior to a collapse in oil and gas prices that began in late November.

Precision Drilling says this year's third quarter recorded a $73-million pretax write down of the value of property, plant and equipment of its Canadian well service assets, and $24-million of other writedowns before taxes.

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