Good day, ladies and gentlemen, welcome to the Precision Drilling Corporation Announces Webcast of 2019 Annual and Special Meeting of Shareholders Conference Call. I would now like to introduce your host for today's conference, Mr. Steven W. Krablin. Sir, you may begin.
Good afternoon. My name is Steven W. Krablin, on behalf of myself and the other members of the Board of Directors of Precision Drilling Corporation, I welcome you to today's annual and special meeting of shareholders. I declare that the meeting will now come to order, I will act as Chairman of this meeting. After the formal business of the meeting and its adjournment, you're invited to stay for a presentation from Kevin Neveu, President and CEO of Precision. I ask that you hold any questions you may have until that time.
For this meeting, we will receive and consider the corporation's audited consolidated financial statements for the year ended December 31, 2018, elect the corporation's directors, appoint KPMG as the corporation's auditors and authorize the directors to set the auditors' fees, have a say on pay vote regarding the corporation's approach to executive compensation, confirm our amended shareholder rights plan. Sitting with me at the head table, Kevin Neveu, President, Chief Executive; Veronica Foley, Senior Vice President, General Counsel, and Corporate Secretary, she will also act as Secretary for this meeting; Carey Ford, Senior Vice President and Chief Financial Officer. I also appoint Ms. Elissa Rojo, representative of Computershare Trust Company of Canada, to act as scrutineer. I would like to take a moment to introduce our directors and senior officers of Precision who are here today.
If you would just stand to let people know who you are for the directors, Mike Culbert, Bill Donovan, Brian Gibson, Allen Hagerman, Sue MacKenzie, Kevin Meyers, David Williams, as well as Kevin Neveu and myself for the directors for this meeting. Senior officers in attendance today, Shuja Goraya, Darren Ruhr. Shuja is our Chief Technology Officer. Darren is a Chief Administrative Officer. Gene Stahl, President of the Drilling Operations. I also welcome the attendance of Mr. Shane Doig, Partner at KPMG. Turning to the formal portion of the meeting. I have proof of filing and proof of mailing of the notice of this meeting, instrument of proxy, financial statements, management information circular, accompanying documents that were sent to the holders of the corporation's common shares.
I've instructed the secretary to keep a copy of these documents and the scrutineer's report, reflecting the shareholders in attendance and their holdings with the records of this meeting. I've been advised that a quorum is present, and I declare that the meeting is regularly called and properly constituted for the transaction of business. Regarding the voting procedures, we're going to conduct all votes by ballot. All registered shareholders and duly appointed proxy holders are entitled to vote. As you entered the meeting, you should have completed a ballot for each matter to be voted upon. I'm certain that most of you have previously voted electronically or by mail or filled out the ballot coming in.
If there's anyone who is in here that is a registered shareholder or a duly appointed proxy holder that did not receive the ballot form and needs one, please indicate so, and we'll get that to you. Okay. Seeing none, we can now proceed with the business of the meeting. Certain shareholders have been previously selected to make and second the nominations in order to facilitate this meeting. The first item is the presentation of the audited consolidated financial statements of the corporation for the fiscal year ended December 31, 2018, and the reading of the auditors' reports. As copies have been mailed to every shareholder who requested them, we can dispense with the reading and accept them as presented. While approval of the financial statement is not required, if you have any questions regarding them, you may raise your questions following Mr. Neveu's presentation.
The next item of business is the election of the directors. Shareholders have been given the ability to vote for or withhold their vote for each individual director nominee. The floor is now open for nomination of the directors.
Mr. Chairman, my name is Harmandeep Dhaliwal, I nominate each of the nine current directors who are standing for re-election as described in the management information circular for election as directors until the next annual meeting of the shareholders of the corporation.
Thank you. As no other nominations were properly submitted in compliance with our bylaws, I declare the nominations closed. I will now ask for a motion to approve an ordinary resolution that each person nominated be individually elected as director of the corporation to hold office until the next annual meeting of the shareholders of the corporation.
Mr. Chairman, my name is Christina Wenzel. I so move.
Thank you. May I have a second?
Mr. Chairman, my name is Corey Lazar. I second the motion.
Thank you. You've heard the motion. Is there any discussion? I've been advised by the scrutineers that based on the proxy received, each of the nine current directors who are standing for re-election have been duly elected individually and by the requisite majority as directors of the corporation to hold office until the next annual shareholders meeting. I therefore declare the resolution carried. Details of the vote and of every other vote held today can be obtained from the secretary of the meeting after the meeting and will be publicly filed. The next item of business is the appointment of auditors. I'd ask for a motion to approve KPMG be appointed as auditors for the ensuing year and that the directors are hereby authorized to set the fees for KPMG.
Mr. Chairman, my name is Dustin Honing. I so move.
Thank you. A second?
Mr. Chairman, my name is Christina Wenzel. I second the motion.
Thank you. You've heard the motion. Any discussion? Based on the proxies received, the resolution is passed. The next item of business is to consider an advisory resolution, commonly known as a say on pay, regarding the Corporation's approach to executive compensation. As this is an advisory vote, the results will not be binding upon the board. However, in considering our approach to executive compensation in the future, the board will take into account the results of the vote together with any other feedback we receive on this issue. I'll now ask for a motion that on an advisory basis, not to diminish the role and responsibilities of the board, the shareholders accept the approach to executive compensation disclosed in the management information circular. Is there a motion?
Mr. Chairman, my name is Ian Mandry, I so move.
Thank you. Second?
Mr. Chairman, my name is Agnes Milosh, I second the motion.
Thank you. I have heard the motion. Any discussion? I have also been advised by the scrutineers that the resolution has passed by the requisite majority. Therefore, I declare it carried. The next item of business is to confirm our shareholder rights plan. The primary objective of the shareholder rights plan is to ensure, to the extent possible, the equal treatment of all our shareholders in connection with any takeover bid for our shares, and in event of a hostile takeover bid, to provide our board with sufficient time to evaluate the bid and to explore and develop alternatives. In order for the shareholder rights plan to remain in effect, a majority of our shareholders must vote as a group in favor of the resolution approving the confirmation and continued existence of the plan.
If the continuation of the plan is approved, it will remain in effect until our annual meeting of shareholders in 2021, unless terminated in accordance with its terms prior to that. I will now ask for a motion that the ordinary resolution authorizing and approving the continuation of our shareholder rights plan as described in the management circular be approved.
Mr. Chairman, my name is Thomas McGrogan, I so move.
Thank you. A second?
Mr. Chairman, my name is Gian Muchuwadana. I second the motion.
Thank you. Any discussion? Based on the proxies received, the resolution has passed by the requisite majority. I now ask if there's any other business to be brought before the meeting. Hearing none, may I have a motion to terminate the meeting?
Mr. Chairman, my name is Brenda Lee. I move that the meeting be terminated.
Thank you. A second?
Mr. Chairman, my name is Dustin Honing. I second the motion.
Thank you. Discussion? Would all those shareholders entitled to vote who are in favor please raise their hands. Any contrary? Thank you. Therefore, the motion is carried. I declare that the meeting is terminated. Now, Kevin Neveu will present a brief presentation on Precision Drilling. Thank you for your attendance.
Thank you. Good afternoon. Welcome to Precision Drilling's annual general meeting. I'll commence with our typical investor presentation to walk you through how we're working hard to create value for our shareholders in a very challenging industry. All right. It'd be great if this would advance. I'll try this. There we go. All right. Much of what I'll be saying today is either our views looking forward and how we view this business and how we interpret what we're seeing in the business. Of course, the cautionary warnings about the uncertainty of our business going forward is very important to keep in mind. Over the last several years, in a very uncertain industry, we've been very clear with our investors to state our priorities for each year and the things we're going to work on that are focused on creating shareholder value.
This year is no different. We began 2019 by focusing on the top three things we think will generate the most shareholder value for our shareholders over both the short term and the long term. At the top of our list is working on our capital structure, and that's reducing our debt and putting more value on the equity side. I'll speak more to this later. It'll be clear that last year and this year, we've been setting clear targets for the short term. This year, our targets are CAD 100 million-CAD 150 million of debt reduction this year. Over the longer term, we've given targets now stretching CAD 400 million-CAD 600 million over the longer term. I'll speak more to that in a few minutes.
The second key priority for this year is focusing on financial performance in broad terms, but more specifically, focusing on leveraging the scale we have in this business. We're a large oilfield services company spanning Canada, the U.S., and several international locations. We have the advantage of scale, and we utilize that heavily through Precision, and that results in the opportunity to create better top-line revenue, better EBITDA, and lower costs, and I'll speak more to that in a few minutes. Ultimately, looking to maximize free cash flow. Finally, in a business which really hasn't given us much room for growth over the past few years, we're going to focus heavily on technology and how we can improve the efficiency, performance, repeatability of drilling rigs through technology and through data. I'll speak more to that in a few minutes.
First of all, Precision Drilling in broad terms, as I said earlier, is a large company spanning Canada, the U.S., and several international jurisdictions. In fact, so much so that last year, during 2018, 70% of our revenue came from outside of Canada. Surprisingly, I'll give you a couple of data points for Q1, which is typically the winter drilling season in Canada, where we usually have our strongest activity in Canada. During the winter drilling season, typically, we'd see our Canadian revenue slightly exceed our U.S. revenue or maybe more. Last year, 2018, Canadian revenue was just slightly less than U.S. revenue. Slightly less. This year, in 2019 Q1 results we just published, less than 36% of our revenue came from Canada during Q1.
That's a testament both to the strength of our markets outside Canada and the softness we're experiencing in Canada, which I'll speak to in a few minutes. Importantly, we have a strong, meaningful position in the U.S. and other markets. One data point that I find quite unique, Precision Drilling has over 8% market share of U.S. land drilling. I can't think of any other industry where one Canadian company has a meaningful market share in the U.S. market. In fact, if you combine the six Canadian drillers operating in the U.S., the six Canadian drillers in the U.S. have almost 18% market share of the U.S. land drilling market.
There are no other markets of any type of industrial product or service that I can think of, certainly not oilfield service, where Canadian companies have a strong presence in the U.S., let alone Precision's 8.4% market share. I'll speak more to that in a few minutes. Our competitive advantage, and this is how we're gaining market share in the U.S., is through our competitive advantage. It's focused on the quality of our rig crews, the scale effect I was referring to earlier, and of course, our high-performance Super Series rigs, and I'll speak more to each of these. Many people in the oilfield service industry discuss and talk about the challenge of finding highly skilled, qualified people, how hard it is to recruit, how hard it is to train.
Certainly, in the Permian Basin, we're hearing lots of stories of oil service companies struggling to find people in the Permian Basin. For Precision, we view recruiting, primarily recruiting, as a core competency. We aggressively go out to recruit every year. Last year, in 2019, we recruited almost 36,000 job applications. We sort through the job applications, find the best of the best of the best, and bring them into Precision. Then we put them into Precision's world-class training systems. We have training rigs in Houston and in Nisku, fully functional rigs with the latest technology, where we put these people through the training center. Last year, we ran 6,000 people through our training centers in Houston and in Calgary. Then once they're trained, once they're on the rig running, we focus on retention.
Particularly, we focus on leadership retention, but we focus on retention of the entire crew. We're really pleased that over 88% of our staff were retained during 2018 on a trailing 12-month basis. Obviously, retention is focused on a whole series of scale-based systems, from training and development to structured progression through their jobs and the very strong safety culture we have on our rigs, the inherently safe operations they get to be part of. Speaking to systems and scale, I'd say this is a key differentiator for Precision among our Canadian peers. We have broad scale with almost 240 rigs around the world, and a large number of rigs are exactly the same. We can leverage our purchasing power, leverage our maintenance systems, our training systems, so that we only have to have one package in place, whether it's procurement, training, development, retention.
Having identical rigs in widely different markets allows us to leverage that scale. It starts with procurement, and it finishes with our people. The third element is the rigs themselves, the Precision Super Triple rigs. It's interesting. I think that Canadian drillers have been involved in development drilling longer than any other part of the industry anywhere else. I think the real early phase of development drilling, I've got an old colleague of mine here that I worked with almost 30 years ago up in Norman Wells. Pad drilling began in Norman Wells back in the 1970s and 1980s. It progressed into heavy oil drilling, SAGD drilling in the early 1990s. Precision's been at the leading edge of pad drilling going back three decades. Today, it's actually now in vogue in the U.S. in shale plays.
In fact, our pad drilling rigs, like you see in this picture, lead the market right now in market share growth. What we're showing you here in this picture of the slide is a typical high-technology pad drilling rig. On the right-hand of the slide is the rear support complex. Connecting that support complex, the generators and the engines and the fluid handling systems, the mud pumps with the rig, is a utility corridor. Then the rig module itself is able to move around, walk around the pad and drill wells, move well to well. In fact, in the DJ Basin in Colorado right now, we're moving these rigs well to well in about 45 minutes, and we're drilling wells that are as deep as 26,000 feet in less than 14 days consistently. Amazingly fast and efficient operations. That's a large part of our competitive advantage.
It's a combination of the rig technology, the highly skilled trained crew, and then the scale effect of having a whole fleet of rigs that are identically the same. I'll speak more to that when I come back to our newer technology that we're moving forward on. Obviously, we're quite pleased with our market share growth. We have doubled our market share in the U.S. since 2014. I would comment that I don't think any other driller in the U.S. has doubled market share during this flat last few years. Remarkable positioning in the U.S. by high-quality rig crews, high-quality rigs.
A large part of this, though, is the money we invested in training to develop our crews and the money we invested in the rig fleet in the U.S. during that period of time with 60 new builds entering the new U.S., and then another 25 or 30 rigs we've been upgrading to our Super-Spec standard during that period of time. These days, the ESG, environmental social governance activities, have become very topical. Investors are focusing on this. This is becoming a screen for whether or not a company is investable. Precision's been a strong believer in being part of the community that we're working in for 3 decades. The systems we're talking about now and disclosing go back in Precision 15, 20, 30 years. We respect our people. We focus on our people.
We train and develop and provide long-term career paths, very safe work environment with continued safety improvements year-over-year. We also offer a robust intern program in every place we operate. We're part of the community. As far as governance goes, we've been a leading Canadian company for governance for a decade now, since I've been with the company, always scoring in the top 20 or 30 Canadian companies for strong governance. In the community, for example, last year, we supported 2,500 volunteer hours in their communities in the U.S. and in Canada. We're partnered with a number of large, important charities in both areas that support the environment that we work in. We provide support at the local levels in a lot of small towns and small places. We have scholarship programs for employees and employees' children.
Of course, the environment is important to all of us, I think, speak to this kind of from two perspectives. When I talk about drilling a DJ Basin well in 14 days, 10 years ago, that well would've taken 45 days to drill. When we can drill it today in 14 days, that's three times faster, meaning that we'll be operating at almost three times the efficiency for everything from CO2 emissions to our footprint on location. We have a smaller footprint, a more compact footprint, shorter-term footprint, and less emissions. That's clear. Just driving efficiency means that we can operate with smaller footprint. Beyond that, we've been working aggressively with our customers to convert rigs to both bi-fuel, where you blend in natural gas with diesel to lower the cost and lower the emissions, and pure natural gas rigs, which are powered by natural gas.
Working closely with our customers, having very good progress on that front. Quite proud of our ESG performance. We don't think we have to do anything to meet today's expectation. In fact, we think our normal business plan satisfies the requirement very well. Moving back to our priorities for a moment. We report on these priorities every quarter. We talk about our progress against each one. We know that it creates shareholder value. Obviously, the first priority is debt reduction. We had a very strong Q1 in that we had some asset sales that allowed us to free up some cash off the balance sheet and advance our plan to pay down some debt. In fact, we reduced debt by CAD 84 million during the first quarter, maintained our strong liquidity, and continued to improve our net debt to total EBITDA and interest coverage ratio.
I love charts that in the debt world are going down to the right. In this case, we're looking at debt reduction, both on what we've achieved so far over the last four years and what we plan to achieve through our long-term targets over the next three years in the top. For investors, particularly investors that aren't specialists in this space, getting down to a leverage ratio of below two times is very important. It's a target for us. It's a clear target. We see the horizon here. We're going to get there. Over the next three to four years as we reduce debt and continue to drive down our debt on the balance sheet, we expect to be down below two times leverage in the foreseeable future.
The one chart that's going up and to the right here is how we cover our interest, how much coverage we have on interest on the balance sheet. Again, strong growth up and to the right. I talked earlier about leveraging our scale and generating free cash flow. There's been two things going on. The market's been highly volatile, but during the first half of this decade, between 2010 and 2015, we built and upgraded rigs. In fact, this chart's showing 114 Super Series rigs added through new builds and through upgrades in our fleet. We've built and upgraded the youngest, most technically relevant fleet in North America over the first half of the decade. You can see that on this cash flow chart on the right-hand side, where we had capital spending in 2011, 2012, 2013, 2014.
In fact, we were negative free cash flow during those periods. As we finished that program in 2015 and transitioned into 2016, 2017, we went through a lot of volatility in the market. Now that we're into a more stable market in the U.S. and managing quite well in Canada, we've moved into a very strong free cash flow mode. You can see how that projects forward using analyst estimates in 2019 and 2020. Speaking about uses of cash, once you generate free cash flow, you have to think about where that free cash flow is gonna be deployed. This year, a very modest capital plan, a total of about CAD 169 million. A third of that, CAD 53 million, is maintenance capital, and that's to keep our rigs running. It's really directly proportional to the activity.
If in fact activity goes up, which would be a good thing, maintenance capital may edge up a little bit. If for whatever reason activity withdraws, we might have to pull down maintenance capital. It'll be proportional to activity. On the right-hand side is expansion. This is investments we're making in the fleet to make the fleet larger. It really comes down to just three or four things. The biggest item is a new rig in Kuwait, and a great picture of it. If you look up on the floor, you can see a really small little speck. Those are people. One of those is me standing there with my white hair. This rig is about a CAD 68 million rig. This year, another CAD 10 million last year.
It'll earn day rates roughly equal to three times the day rate of a North American rig at about three times the cost with about three times the cash flow. Very good long-term investment. Expanding our footprint in Kuwait from five operating rigs to six operating rigs. All rigs have essentially the same standard, same specification. As we add each rig, they're completely accretive to the bottom line. The revenue flows straight through to the bottom line. We like our Kuwaiti business. We've also added one new build rig to our U.S. fleet earlier this year, and we've commenced our first DC SCR rig conversion to an AC Super Triple spec rig, and that'll be completed during the second quarter in that budget. We plan some further technology expansions during the quarter. Moving on to our second priority, this is specifically free cash flow leveraging our scale.
Probably my favorite chart. It's got activity, it's got revenue, it's got EBITDA growing three years of consecutive compound annual growth. Strong growth driven primarily by activity in the United States international, driving our activity up, our revenue up, and our EBITDA up. In fact, surprisingly, Carey, you can correct me if I'm wrong. I believe we had more billable days in Q1 in the U.S. than we had in Canada in Q1. Is that correct?
That's correct.
It's the first time in our history where our Q1 days in the U.S. exceeded our days in Canada during the first quarter. Again, that's helping us grow our revenue, our EBITDA, and our activity. There's always a lot of concern about how focused service companies are on given customers. We have an extremely diverse customer base. Almost two-thirds of our customer base are large public companies operating primarily in North America. Another large segment, about a third of our customer base is private equity companies operating primarily in the United States, the Permian Basin, well-funded private companies, and of course, our growing slice of international business, which is primarily national oil companies. I think what's even more interesting is we look at our contract progression. Contracts are the rigs we have locked up for the year that we have certainty on revenue on.
Throughout the course of this year, we've grown that contract book. The bottom chart on the left shows us beginning 2019 with 43 term contracts for the year. During the first quarter, we've signed a total now of, I believe, 19 in the U.S. and four internationally, raising our average from 43 to 57 rigs for the average for this year, with some of those contracts stretching out five years into the future. Strong contract growth during the course of this year, despite a flattening market in the U.S. and headwinds in Canada. Just looking at each of our markets quickly, United States. For the U.S., we see a strong free cash flow market. We should see market share growth.
I don't anticipate us deploying a lot of capital in the U.S. to build new rigs in the near term, I do expect us to capture more market share. The chart on the upper right shows our U.S. market share progression over the past five years. We've doubled our market share in the U.S., adding just a couple of rigs during that period of time. All of this due to the strength of our highly skilled crews and our excellent rigs in the U.S. We are in every unconventional shale basin in the U.S., with particularly strong positions in the DJ Basin, in the Marcellus, growing footprints in the SCOOP/STACK and in the Haynesville in the U.S., and a very strong position in the Permian Basin, with almost half our U.S. activity focused on Permian.
We did book 19 new contracts this year in the U.S., or renewals in the U.S. We made a comment on our Q1 conference call that we expected day rate strength to remain through the second quarter. In fact, I'm optimistic that we'll see good progression on day rates moving forward. Again, the supply of high-specification rigs stays very tight. In fact, our fleet's over 90% utilized, and most of our peers have been discussing utilization levels in that 90 or excess range. Canada's been more of a challenge. No question that for the first half of this year, and we're now into the month of May, soon to be June, activity's been averaging 33% below 2018. I would categorize this right now as pretty much the second-worst year ever, and I'd benchmark 2016 as the worst year ever.
2016, we had the benefit of a few contracts from 2015 and 2014 that rolled through. In 2016, the industry really came into this year in Canada in 2019 with not a lot of long-term contracts and having to just float with the market. 33% less utilization, spot market day rates that while they've been firm, there's a real challenge in the marketplace with our customers. Our sales team works hard to support our day rates in Canada. Despite that, Canada, Precision has an extremely strong position. This year, during the first quarter, we peaked out at around 60 rigs. Our average rig count will be in the 40s, which in most other years, even 2014, would likely make us almost the largest driller in Canada.
It's a testament to our scale that even during likely the second-worst year, maybe the worst year ever, we're still bigger than most would be in the peak of the market. A very strong position allowing us to generate free cash flow in Canada. The team here has worked quite hard to trim back our costs, keep our rigs running, maximize the day rate, and maximize free cash flow. The result is we have very strong market share throughout the market, and the key play is the deeper basin in Canada where our Super Triples are most likely to generate the best returns for the company. The Duvernay in heavy oil in the Montney play, we enjoy market shares of 25%-30%. Strong position.
I'm certainly concerned about Canada, I believe that we've got a strong position that generates free cash flow and really helps support Precision's long-term plans. The international market for us is quite unique. We're operating primarily today in Kuwait and Saudi Arabia. We have a handful of rigs that are available to be used either in Saudi or in Kurdistan. We're seeing a number of bids right now. In fact, we're getting more hopeful we'll see those rigs activate later this year. In Kuwait, we'll be deploying, as I said earlier, our sixth rig. Stable, strong business, five-year contracts, automatic renewals. In fact, our first two rigs delivered automatically renewed earlier this year for another year. We have scheduled renewals coming out in 2022 and 2023, so a long ways in the future.
The sixth rig will deploy sometime in mid-June, if I find my operations team here, they're gonna do the best they can to be a little bit early. For sure, we'll be running by July 1st. Based on the other five rigs running, I expect that deployment will go smooth, efficiently, and with no hiccups. It's a tough place to operate. Kuwait has extremely high expectation for performance. They've got comprehensive standards that have to be met, and they're not anxious to grant any kind of waiver. Experience in the country is very important, and being able to deliver exactly what you're required to deliver is critically important, something we've proven we can do. Saudi Arabia has been a little more challenging for us. Today, we have three rigs running. We have one idle rig.
We've been saying for a long time now we need to grow scale there. I'll start by saying the business at the rig level delivers very good returns. At the country level, it's cash flow positive, it's accretive to Precision, we'd still like to gain scale. Still like to get that fourth rig running or move additional rigs into the country. We're working hard on that's just a key focus for us going forward. We haven't talked a lot about our completion and production business over the past few years, it's been tough. The business has been under a lot of pressure. We put in place a new management team about a year ago, a little over a year ago. They've worked hard to really slim down that business and really refocus it.
I would tell you what we've done is we've taken a step back from Precision's scale and process and structure and turned this into a line-of-sight business. It's streamlined, it's low overhead, the cash flow generation has been remarkable. If you look at the graph, we were negative EBITDA in 2016. In 2017, we had an improvement, 2018, stronger yet. First quarter 2019 was remarkably strong, despite activity being off over 10% year-over-year. Good work bringing that business back in line and making it accretive to Precision Drilling. Quite pleased with that work. Moving on to our third strategic priority, that's the development and commercialization of technology. Our objective this year is to be commercial and to have our systems generating routine revenue. This is a complete change. I was explaining earlier to our board that the industry has gone through transitions.
In the 1970s, it went from a mechanical to a DC SCR transition, that was mechanical to analog controls in the late 1970s, early '80s. In the late 1990s, early 2000s, it transitioned from DC SCR to AC digital. By the way, in that transition, Precision was a leader in Canada and a leader in the U.S. Today, what we're doing is transitioning from digital to process automation control. You're adding automation on top of a digital control system. That's what we're doing. The results are excellent. When you put process automation control on a repeatable process, you can eliminate all variance, you can optimize the efficiency. You can see it in this chart. The top chart is manual drilling, that's showing adding pipe and making connections then drilling ahead. The cycle times vary, they're longer.
The bottom chart shows process automation control doing the same thing. That's just one part of the process going from drilling to interrupting the drilling process, adding pipe, back to drilling again. In that little cycle that we typically do 300 to 400 times per well, we're saving three to five minutes per cycle, times 300 to 400 cycles on a typical rig. Very excellent way to improve the efficiency of the rig. That one improvement alone pays for the cost for our customers to pay us for process automation control. We're marketing that at CAD 1,500 per day and rolling it out to our customers. It's going very well. The results are real. Once that platform is in place, we can bolt on different apps that can control parts of the drilling process. We can control energy at the bit, directional drilling.
We can control stick-slip and vibration in the drill string. We can extend bit life by putting apps on. At Precision, we have a total of 15 different apps that we're field testing, some written by manufacturers, some written by other service companies, some written by the oil companies, one or two written by ourselves. Our view on this is that we expect every rig will have one, two, three or four apps running. If it's an app that we've provided, we'll charge a market price for the app, could be CAD 500 to CAD 1,000 per day. If it's an app that somebody else has written, we'll charge a residency fee. Probably a lot less, probably the CAD 200 to CAD 400 per day range. We believe that the platform itself has revenue impact.
We believe it's got pull-through for apps, it's got pull-through for the fleet, and it reinforces our competitive advantage. Our standardized rig fleet and our partnerships with people like National Oilwell Varco, Schlumberger, Hitachi, are utilizing industry experts in software. We're not trying to be the software writer. We're trying to be the field deployer of technology. That's where our strength lies. To summarize the presentation, we're focused on generating strong free cash flow from long life assets. We build these rigs, we pay for them over about a four-year cycle with our customers, and then they run for about 20 more years. Our technology is at leading edge, so those rigs do have a long life. We expect to have a number of times during those cycles to capture free cash flow from those rigs. We're gonna drive higher equity valuations through de-leveraging. We can control that.
We can control debt payments and drive a higher equity valuation through de-leveraging. We'll continue to use technology as a differentiator. At that point, we'll end the presentation and the webcast, and I'll open it up for any questions from the floor.