PRECISION DRILLING Corp — Annual Report 2003

Feb 13, 2003

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO SECTION 13A-16 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For February 13, 2003 Commission File Number: PRECISION DRILLING CORPORATION (Exact name of registrant as specified in its charter) 4200, 150 - 6TH AVENUE S.W. CALGARY, ALBERTA CANADA T2P 3Y7 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [] Form 40-F [X] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1). Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders. Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PRECISION DRILLING CORPORATION Per: /s/ Jan M. Campbell --------------------------------------- Jan M. Campbell Corporate Secretary Date: February 13, 2003 Calgary, Alberta, Canada - February 13, 2003 YEAR-END RESULTS - DECEMBER 31, 2002 Precision Drilling Corporation ("Precision" or the "Corporation") today reports results for the year ended December 31, 2002. Revenue for the year decreased 14% to $1.69 billion while diluted earnings per share decreased to $1.66 from $4.03 in 2001. Fourth quarter diluted earnings per share of $0.16 was in line with previously announced expectations. The 2001 comparative numbers have been restated to give effect to the retroactive application of the new Canadian accounting standard for foreign exchange gains and losses on translation of US dollar denominated long-term debt. The new standard, which is consistent with US practice, resulted in a decrease in earnings per share of $0.03 for the twelve-month period ended December 31, 2002 with no effect on the fourth quarter. Canadian oilfield service activity was lower than expected to begin the fourth quarter but improved significantly during December with the strength continuing into 2003. The US market continued to be weak with drilling activity remaining consistent with the third quarter. Revenue generated in international markets also remained relatively unchanged from the third quarter. In the Contract Drilling Group, revenue for the fourth quarter was $190.0 million compared to $226.7 million in the previous year, a 16% decline. The 10% decline in year over year Canadian drilling activity was accompanied by a similar erosion of pricing. International drilling revenue declined slightly in the fourth quarter of 2002 relative to 2001. Activity in Venezuela was curtailed due to the political unrest in that country, with this decline being largely offset by additional rigs working in Mexico. Both activity and pricing for well servicing also declined by approximately 5%. The Technology Services Group continued to be burdened by the cost of service delivery and support structures with capacity greater than required for current revenue levels, particularly in international markets. Rationalization of operations and capital investment in this segment will be our focus in the months ahead. The company is committed to achieving profitability in all product lines and regions in 2003. We are very pleased with the continued success of the field test program for the new Revolution(TM) 4 3/4-inch rotary steerable system. The Corporation's new HEL(TM) measurement-while-drilling system is currently being used on jobs in Canada, the US, Mexico and Indonesia. This utilization is proving invaluable in refining the tool's capabilities and reliability. Finally, demand for the Precision EMpulse(TM) electromagnetic measurement-while-drilling system is strong with this technology making increasing contributions to revenue. Revenue in the Rental and Production segment was down slightly from $64.1 million in the fourth quarter of 2001 to $59.5 million in 2002. Declines were experienced in each of the oilfield equipment rental, gas compression packaging and industrial plant maintenance businesses. Although challenging, 2002 was the Corporation's third best in terms of revenue and fourth best bottom line performance with net earnings of $91.3 million. Maintenance of our strong balance sheet helps ensure stability and supports future growth. The Corporation is well positioned to capitalize on strong Canadian oilfield services activity levels and is cautiously optimistic of the prospects for improving US and international markets. Certain statements contained in this press release, including statements which may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of Precision to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include fluctuations in the market for oil and gas and related products and services; competition; political and economic conditions in countries in which Precision does business; the demand for services provided by Precision; changes in laws and regulations, including environmental, to which Precision is subject and other factors, which are described in further detail in Precision's filings with the Securities and Exchange Commission. CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF CASH FLOW

SEGMENT INFORMATION

*excludes acquisitions (1) Certain expenses have been reclassified between segments to more appropriately reflect operating earnings. CANADIAN DRILLING OPERATING STATISTICS

• Excludes non-CAODC rigs. A conference call to review the year-end results has been scheduled for 12:00 noon MST on Thursday, February 13, 2003. The conference call dial-in number is 1-800-814-4859. A live webcast will be accessible at www.precisiondrilling.com. Precision Drilling Corporation is listed on the Toronto Stock Exchange under the ticker symbol PD and on the New York Stock Exchange under the ticker symbol PDS. FOR FURTHER INFORMATION, PLEASE CONTACT DALE E. TREMBLAY, SENIOR VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER, 4200, 150 6TH AVENUE S.W., CALGARY, ALBERTA, T2P 3Y7, TELEPHONE: (403) 716-4500, FAX: (403) 264-0251; WEBSITE: WWW.PRECISIONDRILLING.COM.