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Oct 21 (Reuters) - Canadian rig contractor Precision Drilling Corp PD.TO PDS.N reported a smaller-than-expected quarterly loss, helped by lower operating costs, and raised its capital budget for the year after winning new contracts.
Oil prices CLc1 have nearly doubled since touching a low of $26.05 in February, encouraging oil producers to put rigs back to work.
"We have recently experienced increased activity and if current commodity prices hold we expect our customers to increase their capital budgets for 2017," the company said on Friday.
However, the company warned that the "optimism may be fragile and sensitive to commodity price volatility".
Precision, which in July said oil producers were changing capital budgets due to the rally in crude prices, raised its 2016 capital expenditure budget to C$222 million ($167.61 million) from C$202 million to reflect capital backed by customer contracts.
Industry leaders, Schlumberger NV (NYSE:SLB) SLB.N and Halliburton (NYSE:HAL) Co HAL.N , have also forecast improved activity in North American drilling, but have warned of limited visibility into customers' investment plans for 2017. Drilling said it now has 37 rigs operating in the United States, up 70 percent from the second quarter. The company currently has 45 active rigs in Canada.
The worldwide rig count for September rose 37 percent to 1,584, from August.
Precision's net loss narrowed to C$47.4 million, or 16 Canadian cents per share, for the third quarter ended Sept. 30, from C$86.7 million, or 30 Canadian cents per share, a year earlier. on average had estimated a loss of 21 Canadian cents per share, according to Thomson Reuters I/B/E/S.
The company's operating expenses for contract drilling services fell 39.2 percent to C$116.9 million.
Revenue fell 44.6 percent to C$201.8 million, below analysts' estimate of C$212.2 million. ($1 = 1.32 Canadian dollars)