Precision Drilling suspends distributions

Precision Drilling Trust put an indefinite halt Monday to its cash distributions to investors, citing poor economic conditions.

The Calgary-based oil and gas well driller announced the suspension as it posted higher fourth-quarter earnings. The trust said it made $92 million, or 71 cents per unit, up from $89 million, or 71 cents a unit, a year earlier.

Precision Drilling's revenue for the fourth quarter of 2008 was $335 million, up 35 per cent from $249 million in the fourth quarter of 2007.

"The increases resulted from the trend established during the third quarter of 2008 as customer demand from high commodity prices carried over to start the fourth quarter," the company said. "However, by the end of the quarter, commodity prices had declined as the economic recession deepened and customer demand declined."

In light of a slow start to 2009, Precession Drilling said it has put distributions on holds indefinitely, commencing with its March payment. The trust said the move will increase debt repayment capability and help strengthen its balance sheet.

The trust's February payout of four cents per unit will go ahead as normal.