Precision Drilling Announces 2025 Second Quarter Unaudited Financial Statements
CALGARY, Alberta, July 29, 2025 (GLOBE NEWSWIRE) -- This news release contains "forward-looking information and statements" within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Cautionary Statement Regarding Forward-Looking Information and Statements" later in this news release. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, loss (gain) on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), Funds Provided by (Used in) Operations, Net Capital Spending, Working Capital and Total Long-term Financial Liabilities. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) Accounting Standards and may not be comparable to similar measures used by other companies. See "Financial Measures and Ratios" later in this news release.
Precision Drilling Corporation ("Precision" or the "Company") (TSX:PD, NYSE:PDS) announces 2025 second quarter results and confirms shareholder return targets while increasing its investment in its Super Series rig fleet to meet customer demand and drive drilling revenue growth.
Financial Highlights
Revenue was $407 million, including $7 million for customer-funded rig upgrades, compared to $429 million in the second quarter of 2024. The decrease was mainly attributable to lower U.S. and international activity and day rates, as well as a decline in well service activity.
Adjusted EBITDA(1) was $108 million, including $4 million of share-based compensation expense. In 2024, second quarter Adjusted EBITDA(1) was $115 million and included share-based compensation expense of $10 million.
Net earnings attributable to shareholders in the second quarter was $16 million or $1.21 per share, marking the 12th consecutive quarter of positive earnings. In the second quarter of 2024, net earnings attributable to shareholders was $21 million or $1.44 per share.
Cash provided by operations during the quarter was $147 million and the Company repaid $74 million of debt and repurchased $14 million of common shares. Year to date, Precision has repaid $91 million of debt and repurchased $45 million of shares and is well above the midpoint of its annual guidance for both these targets.
Capital expenditures were $53 million, bringing the year-to-date total to $113 million. Precision has revised its 2025 capital budget to $240 million from $200 million as it plans to upgrade 22 of its Super Series rigs to meet customer demand, secure additional customer commitments, and drive revenue growth.
Operational Highlights
Canada averaged 50 active drilling rigs compared to 49 active rigs in the second quarter of 2024, outpacing Canadian industry activity that declined 5%.
Canadian revenue per utilization day increased to $37,725 from $36,075 in the same period last year, primarily due to customer-funded rig upgrades.
U.S. averaged 33 active rigs versus 36 in the second quarter of 2024, reflecting a similar decline as industry activity. Compared to the first quarter, Precision's average U.S. rig count was up three rigs with U.S. rig utilization days increasing 13% while industry declined 3%.
U.S. revenue per utilization day was US$31,113 compared to US$33,227 in the same period last year, primarily due to lower industry activity that caused downward pressure on rates.
Internationally, we averaged seven active rigs versus eight in the second quarter of 2024 and realized revenue of US$36 million compared to US$40 million in the second quarter of 2024.
Service rig operating hours decreased 23% compared to the same quarter in 2024 due to customer driven project deferrals, the impact of weather, and lower U.S. activity. During the quarter we wound down our U.S. well servicing operations, selling certain assets and mobilizing others into Canada.
(1) See "FINANCIAL MEASURES AND RATIOS."
MANAGEMENT COMMENTARY"Precision's second quarter financial and operational results were stronger than we anticipated, with excellent free cash flow, new contracts booked in Canada and the U.S., and strong customer demand for Precision's Super Triple rigs in every natural gas basin in North America coupled with sustained strong demand for our pad-capable Super Single rigs, supporting heavy oil drilling in Canada. We generated revenue of $407 million, Adjusted EBITDA of $108 million, and net earnings attributable to shareholders of $16 million or $1.21 per share. I am pleased how our highly experienced team, committed to serving our customers, continues to deliver positive returns for our shareholders.
"Cash provided by operations was $147 million in the second quarter, allowing us to reduce debt by $74 million, repurchase $14 million of shares, and fund capital expenditures of $53 million. Year to date, we reduced debt by $91 million and repurchased $45 million of shares. We are well above the midpoint of our annual guidance for both debt repayments and share repurchases, and confident in our ability to meet our 2025 targets.
"In Canada, we averaged 50 active rigs in the quarter compared to 49 a year ago, outpacing industry activity that declined year over year. Our outperformance was driven by strong demand for our growing fleet of pad-capable Super Series rigs that provide customers improved efficiencies and minimizing the impact of spring breakup. We deployed two pad-capable Super Single rigs earlier this year to meet customer demand for heavy oil development drilling. Undoubtedly, Canada's improved takeaway capacity from the Trans Mountain pipeline expansion has increased heavy oil activity since its start up in mid-2024 and driven our Super Single utilization to near full capacity. LNG Canada made its first shipment in early July and once this facility achieves its run rate capacity, demand for our Super Triple rigs could exceed current supply.
"In the U.S., while the industry's rig count continued to fall during the quarter, we increased our activity 13% versus the first quarter of the year and averaged 33 active rigs with an exit rate of 35 active rigs. Our growth was the result of capitalizing on emerging opportunities in U.S. natural gas plays as customers are becoming more constructive on LNG off-take and AI demand, which is driving additional drilling. With a strong reputation for drilling in natural gas basins such as the Haynesville and Marcellus, we expect our U.S. rig activity to further increase as we deploy additional natural gas drilling rigs through the remainder of the year.
"Our international drilling operations performed as expected, generating US$36 million in revenue and strong free cash flow during the quarter. We have five rigs active in Kuwait and two in Saudi Arabia, with the majority of these rigs under five-year term contracts that extend into 2027 and 2028.
"Completion and Production Services revenue was lower than expected as our service rig operating hours declined 23% year over year. This decrease was attributable to customer driven project deferrals, due to market and commodity price volatility, and the impact of weather, including wet conditions and wildfires. The business generated Adjusted EBITDA of $10 million and we expect activity to improve in the second half of the year as customers move forward with previously deferred projects.
"With strong demand for drilling in Canada and improving sentiment for natural gas drilling in the U.S., customers are requesting a higher number of rig upgrades than we expected earlier this year. As a result, we have increased our capital budget from $200 million to $240 million to support these requests and provide Precision's customers with some of the most technologically advanced Super Single and Super Triple rigs in North America. In 2025, we plan to upgrade 22 of our Super Series rigs, which is driving more customer commitments and revenue growth from our drilling operations. Our 2025 upgrade capital is supported by up-front customer payments, term contracts, and higher day rate commitments. We remain positioned to further adjust capital spending up or down in response to evolving customer demand.
"Our revised capital plan aligns with our annual strategic priorities to drive revenue growth from our existing service lines. We believe a combination of debt reduction, share buybacks, and investments in our own business will generate the greatest returns for our shareholders. I would like to thank our employees, customers, shareholders and other stakeholders for their continued support," concluded Mr. Neveu.
SELECT FINANCIAL AND OPERATING INFORMATION
Financial Highlights
For the three months ended June 30,
For the six months ended June 30,
(Stated in thousands of Canadian dollars, except per share amounts)
2025
2024
% Change
2025
2024
% Change
Revenue
406,615
429,214
(5.3
)
902,946
957,002
(5.6
)
Adjusted EBITDA(1)
108,100
115,121
(6.1
)
245,597
258,270
(4.9
)
Net earnings
16,487
20,701
(20.4
)
51,434
57,217
(10.1
)
Net earnings attributable to shareholders
16,267
20,701
(21.4
)
50,778
57,217
(11.3
)
Cash provided by operations
147,495
174,075
(15.3
)
210,914
239,618
(12.0
)
Funds provided by operations(1)
104,290
111,750
(6.7
)
214,132
229,515
(6.7
)
Cash used in investing activities
36,049
26,943
33.8
93,251
102,180
(8.7
)
Capital spending by spend category(1)
Expansion and upgrade
26,757
8,422
217.7
46,303
22,792
103.2
Maintenance and infrastructure
26,016
30,001
(13.3
)
66,435
71,158
(6.6
)
Proceeds on sale
(11,829
)
(10,992
)
7.6
(15,594
)
(16,178
)
(3.6
)
Net capital spending(1)
40,944
27,431
49.3
97,144
77,772
24.9
Net earnings attributable to shareholders per share :
Basic
1.21
1.44
(16.0
)
3.75
3.97
(5.5
)
Diluted
1.07
1.44
(25.7
)
3.28
3.97
(17.3
)
Weighted average shares outstanding:
Basic
13,401
14,389
(6.9
)
13,541
14,398
(6.0
)
Diluted
13,987
14,395
(2.8
)
14,158
14,402
(1.7
)
(1) See "FINANCIAL MEASURES AND RATIOS."
Operating Highlights
For the three months ended June 30,
For the six months ended June 30,
2025
2024
% Change
2025
2024
% Change
Contract drilling rig fleet
215
214
0.5
215
214
0.5
Drilling rig utilization days:
Canada
4,580
4,464
2.6
11,260
11,081
1.6
U.S.
3,033
3,236
(6.3
)
5,724
6,689
(14.4
)
International
680
728
(6.6
)
1,400
1,456
(3.8
)
Revenue per utilization day:
Canada (Cdn$)
37,725
36,075
4.6
36,465
35,789
1.9
U.S. (US$)
31,113
33,227
(6.4
)
32,074
33,041
(2.9
)
International (US$)
53,129
55,301
(3.9
)
51,221
54,055
(5.2
)
Operating costs per utilization day:
Canada (Cdn$)
22,419
21,652
3.5
21,471
20,641
4.0
U.S. (US$)
22,087
22,427
(1.5
)
22,784
22,062
3.3
Service rig fleet
144
165
(12.7
)
144
165
(12.7
)
Service rig operating hours
43,837
57,051
(23.2
)
110,823
131,555
(15.8
)
Drilling Activity
Average for the quarter ended 2024
Average for the quarter ended 2025
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Average Precision active rig count(1):
Canada
73
49
72
65
74
50
U.S.
38
36
35
34
30
33
International
8
8
8
8
8
7
Total
119
93
115
107
112
90
(1) Average number of drilling rigs working or moving.
Financial Position
(Stated in thousands of Canadian dollars, except ratios)
June 30, 2025
December 31, 2024
Working capital(1)
3,681
162,592
Cash
46,698
73,771
Long-term debt
546,429
812,469
Total long-term financial liabilities(1)
609,299
888,173
Total assets
2,742,837
2,956,315
Long-term debt to long-term debt plus equity ratio (1)
0.25
0.33
(1) See "FINANCIAL MEASURES AND RATIOS."
Summary for the three months ended June 30, 2025:
Revenue in the second quarter was $407 million and included $7 million for customer-funded upgrades. While Canadian drilling activity and day rates increased over the same period last year, revenue decreased $23 million from the second quarter of 2024 primarily due to U.S. and international drilling activity declining 6% and 7%, respectively, and well service activity falling 23%.
Adjusted EBITDA was $108 million compared to $115 million in the second quarter of 2024, primarily due to lower activity impacting revenue offset in part by lower share-based compensation expense, which was $4 million versus $10 million in the same period last year. For additional information on share-based compensation please refer to "Other Items" later in the this news release.
Adjusted EBITDA as a percentage of revenue(1) was 27%, consistent with the second quarter of 2024.
Net earnings attributable to shareholders was $16 million or $1.21 per share compared to $21 million or $1.44 per share for the same period last year. On a diluted basis, net earnings attributable to shareholders was $1.07 versus $1.44 in 2024. Precision has consistently delivered positive quarterly net earnings for the past three years.
Cash provided by operations was $147 million and the Company repurchased 237,085 shares for $14 million, and redeemed US$60 million of its 2026 unsecured senior notes, ending the quarter with $47 million of cash and almost $530 million of available liquidity.
In Canada, revenue per utilization day was $37,725 compared to $36,075 in the same period last year. The increase related to $7 million of revenue earned for customer funded rig upgrades, amounting to $1,440 on a daily basis.
Canadian operating costs per utilization day increased 4% to $22,419, mainly due to labor costs related to rig mix and recoverable expenses offset in revenue.
In the U.S., revenue per utilization day was US$31,113 compared to US$33,227 in the same period last year, as lower industry activity caused downward pressure on rates. In the previous quarter, U.S. revenue per utilization day was US$33,157 but included US$1,263 of idle but contracted rig revenue.
U.S. operating costs per utilization day remained consistent at US$22,087 versus US$22,427 in the second quarter of 2024. With an increasing rig count, our operating costs per utilization day included US$648 of rig reactivation charges compared to US$242 in the same period last year. In the previous quarter, U.S. operating costs per utilization day were US$23,568 and included charges for mobilization costs and rig reactivations.
Internationally, we realized revenue of US$36 million compared to US$40 million primarily due to our average active rig count, which decreased from eight to seven in the second quarter of 2025 as one rig was temporarily suspended in Saudi Arabia. We expect to have seven rigs active for the rest of the year.
Completion and Production Services revenue was $54 million, a decrease of $12 million from 2024, as service rig operating hours declined 23%. This reduction was the result of customer driven project deferrals, the impact of weather, and lower U.S. activity as we wound down our U.S. well servicing operations, selling certain assets and mobilizing others into Canada. Adjusted EBITDA was $10 million, representing 18% of revenue and comparable to 19% in 2024.
General and administrative expenses were $25 million versus $29 million in the second quarter of 2024, primarily due to lower share-based compensation expense.
Capital expenditures were $53 million compared to $38 million in the second quarter of 2024 and included $26 million for the maintenance of existing assets, infrastructure, and intangible assets and $27 million for expansion and upgrades.
(1) See "FINANCIAL MEASURES AND RATIOS."
Summary for the six months ended June 30, 2025:
Revenue for the first six months of 2025 was $903 million, a decrease of 6% from 2024. The majority of this decrease related to lower activity in U.S. drilling and our Canadian well service business.
Adjusted EBITDA decreased 5% to $246 million from $258 million and included $7 million of share-based compensation expense compared to $33 million in 2024. Please refer to "Other Items" later in news release for additional information on share-based compensation.
Adjusted EBITDA as a percentage of revenue was unchanged at 27%.
Net earnings attributable to shareholders was $51 million or $3.75 per share and comparable with $57 million or $3.97 per share. On a diluted basis, net earnings attributable to shareholders was $3.22 per share versus $3.97 in 2024.
General and administrative costs were $55 million and $19 million lower than the first six months of 2024, primarily due to lower share-based compensation expense.
Net finance charges were $31 million, a decrease of $6 million from 2024 due to lower outstanding debt balance, partially offset by the impact of the weakening Canadian dollar on our U.S. dollar-denominated interest expense.
Cash provided by operations was $211 million and the Company repurchased 646,058 shares for $45 million and reduced debt by $91 million by redeeming US$60 million of 2026 unsecured senior notes and repaying $7 million on the Senior Credit Facility. We ended the quarter with $47 million of cash and almost $530 million of available liquidity.
Capital expenditures were $113 million for the first six months of 2025 and included $66 million for maintenance, infrastructure, and intangible assets, and $46 million for expansion and upgrades. By comparison, for the first six months of 2024, capital expenditures were $94 million and included $71 million for maintenance, infrastructure, and intangible assets, and $23 million for expansion and upgrades.
STRATEGY
Precision's vision is to be globally recognized as the High Performance, High Value provider of land drilling services. We work toward this vision by defining and measuring our results against strategic priorities that we establish at the beginning of every year.
Precision's 2025 strategic priorities and the progress made during the second quarter:
1. Maximize free cash flow through disciplined capital deployment and strict cost management.
Generated cash from operations of $147 million, allowing the Precision to reduce debt and buy back shares.
On track to realize approximately $10 million in annual savings following fixed cost reductions in the first quarter to address market uncertainty.
2. Enhance shareholder returns through debt reduction and share repurchases. Plan to reduce debt by at least $100 million and allocate 35% to 45% of free cash flow before debt repayments for share repurchases.
Returned $14 million of capital to shareholders by repurchasing 237,085 shares during the quarter. Year to date, we have repurchased $45 million shares and are well on track to meet our annual guidance.
Reduced debt by $74 million and ended the quarter with almost $530 million of available liquidity. Year to date, we have reduced debt by $91 million, which is well beyond the mid point of our guidance.
Well positioned to meet our long-term debt reduction target of $700 million between 2022 and 2027. As of June 30, 2025, we have reduced our debt by $525 million since the beginning of 2022.
3. Grow revenue in existing service lines through contracted upgrades, optimized pricing and utilization, and opportunistic consolidating tuck-in acquisitions.
Increased Canadian drilling rig utilization, averaging 50 active rigs versus 49 in the second quarter of 2024.
Grew US rig utilization in a declining market, averaging 33 active rigs versus 30 in the previous quarter.
Maintained strong pricing in Canada with revenue per utilization per day of $36,285, after excluding revenue related to customer-funded upgrades, which was consistent with $36,075 in the second quarter of 2024.
Increased 2025 capital budget to $240 million from $200 million to provide for 22 upgrades to our Super Series rigs and drive drilling revenue growth.
Current market conditions and commodity price volatility make acquisitions less likely in the near term.
OUTLOOK
Near-term expectations for global energy demand growth have been tempered by several geopolitical events including OPEC+ easing of curtailments, trade and tariff uncertainty, and international conflicts. However, we believe the long-term fundamentals for energy is positive, driven by economic growth, increasing demand from emerging economies, and new demand for power.
In Canada, additional takeaway capacity for both oil and natural gas continues to support Canadian activity. LNG Canada made its first shipment at the beginning of July, and we expect demand for our Super Triple drilling rigs could exceed current supply once the facility achieves its run rate capacity. The Trans Mountain pipeline expansion continues to support heavy oil production, driving our Super Single rig utilization near full capacity. While Canadian drilling fundamentals are strong, tariff and commodity price uncertainty have caused some producers to defer some work until later this year. We currently have 63 rigs operating and as these uncertainties resolve, we expect Canadian customer demand for oil targeted drilling to further strengthen.
In the U.S., while the oil rig count continues to decline, we are beginning to see natural gas drilling increase as customers are becoming more constructive on LNG off-take and AI demand. We currently have 36 rigs active in the U.S. and expect to increase our activity for the remainder of the year as we capitalize on emerging opportunities in natural gas basins such as the Haynesville and Marcellus.
Internationally, we have seven active rigs with five in Kuwait and two in the Kingdom of Saudi Arabia and expect this same level of activity for the remainder of the year. The majority of these rigs are under five-year term contracts that extend into 2027 and 2028. We continue to look for opportunities to leverage our international expertise.
As the premier well service provider in Canada, the outlook for this business remains strong, driven by increased takeaway capacity from the Trans Mountain pipeline expansion and LNG Canada, and our High Performance, High Value service offering. We expect activity to improve in the second half of the year as customers move ahead with projects previously deferred.
Contracts
The following chart outlines the average number of drilling rigs under term contract by quarter as at July 29, 2025. For those quarters ending after June 30, 2025, this chart represents the minimum number of term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional term contracts.
As at July 29, 2025
Average for the quarter ended 2024
Average
Average for the quarter ended 2025
Average
Mar. 31
June 30
Sept. 30
Dec. 31
2024
Mar. 31
June 30
Sept. 30
Dec. 31
2025
Average rigs under term contract:
Canada
24
22
23
23
23
20
18
17
16
18
U.S.
20
17
17
16
18
16
16
14
9
14
International
8
8
8
8
8
8
7
7
7
7
Total
52
47
48
47
49
44
41
38
32
