PHX Energy Announces Third Quarter Results & 2026 Capital Expenditure Budget

Executive Summary

• PHX Energy reported Q3 2025 consolidated revenue of $164.3 M, a modest 2 % increase versus the prior year, but adjusted EBITDA fell 4 % to $27.9 M and earnings dropped 17 % to $8.5 M ($0.16/share).
• The company increased its borrowing capacity (CAD $95 M syndicated facility; USD $25 M US facility) and extended loan maturity to Dec 12 2028, providing additional liquidity for future opportunities.
• A dividend of $0.20 per share ($9 M total) was declared and paid, and the Normal Course Issuer Bid (NCIB) was renewed with a maximum of 4,035,757 shares; 279k shares were repurchased under the prior NCIB.

Key Details

• Revenue: $164.3 M (Q3 2025) vs. $160.6 M (Q3 2024); includes $11.9 M motor rental and $0.3 M equipment sales.
• Adjusted EBITDA: $27.9 M (17 % of revenue), down 4 % YoY; previous year $29.0 M (18 %).
• Earnings: $8.5 M, $0.16/share vs. $10.2 M, $0.22/share in Q3 2024.
• Depreciation & Amortization (drilling equipment): $16.3 M (pre‑tax), a 42 % YoY increase driven by asset additions and revised useful lives.
• US Division: Revenue $120.2 M (+3 % YoY); operating days up 9 % to 4,286; RSS activity fell to 20 % of days (down from 24 %).
• Canadian Division: Revenue $44.1 M (flat YoY); operating days down 5 %; RSS activity rose to 4 % of days.
• Capital Expenditures: $16.5 M total; $13.8 M growth capex (RSS, Velocity, Atlas, motors), $1.4 M maintenance retirements, $1.4 M downhole loss replacements. Net capex $7.4 M after $9.1 M equipment disposition proceeds.
• Borrowing Capacity Increase: Syndicated facility CAD $80 M → CAD $95 M; US operating facility USD $20 M → USD $25 M; available drawdowns CAD $67 M and USD $25 M.
• Dividend: Declared $0.20/share on Sep 15, 2025; paid Oct 15, 2025 to shareholders of record Sep 30, 2025 (total $9 M).
• NCIB Renewal: Approved to repurchase up to 4,035,757 shares (10 % of float) from Aug 18, 2025 – Aug 17, 2026; no purchases made under the new NCIB yet.
• Working Capital / Net Debt (Sep 30 2025): Working capital $102.2 M; net debt $34.5 M.
• Outlook: Anticipates 2025‑Q4 revenue resilience despite weaker rig counts; 2026 preliminary capex budget $60 M (≈50 % growth capex). Emphasizes RSS and Atlas rentals as key growth drivers; cautions on potential downside from oil price weakness, tariffs, and macro‑economic volatility.
• ROCS: Excess cash flow $12.6 M; 70 % target ($8.8 M) exceeded by dividend payout, leaving a small negative remaining distributable balance under ROCS.

Notable Quotes

• “Our superior customer service and industry‑leading drilling technology have created resilience amidst lower rig counts, and we remain focused on expanding high‑margin RSS and Atlas rental businesses.” – Michael Buker, President & CEO (Nov 4 2025)