Estimate Update Reflects Curtailed Industry Drilling Activity
The US rig count has declined in recent months as operators have curtailed activity in the face of declining oil and natural gas prices. According to the Baker Hughes rig count, total US working rigs had declined to 669 on July 21, 2023, from 755 on March 31, 2023. ICD’s fleet of pad-optimal super-spec rigs primarily serves customers in the Haynesville, Permian, and Eagle Ford regions. The ability of ICD’s rigs to support multi-well pad development projects targeting long-lateral horizontal wells is expected to keep the company’s fleet in high demand... We have adjusted our estimates to reflect a business trough in 2Q23/3Q23. Our revised estimates are based on an average of 17.0 rigs working in 2Q23, 15.0 in 3Q23, returning to 17.0 in 4Q23. Repositioning rigs to the Permian from the Haynesville is expected to cause some cost inefficiencies in 2Q23 and 3Q23... Our model suggests ICD remains on track to improve the leverage ratio as cash builds on the balance sheet... ICD is scheduled to report 2Q23 financial and operating results before the NYSE opens on Thursday, August 3, 2023. A conference will be held that day at 12:00 pm ET. The dial-in number is (855) 239-3115 and the passcode is 9447728. International callers can use (412) 542-4125.Independence Contract Drilling provides land-based contract drilling services for oil and natural gas producers targeting resource plays in the United States. The company owns and operates a fleet comprised of drilling rigs. The company's rig fleet includes 29 marketed AC powered (AC) rigs and a number of additional rigs requiring conversions or upgrades in order to meet its AC pad-optimal specifications. The company's rigs are operating in the Permian Basin, the Haynesville Shale and the Eagle Ford Shale.
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