Ensign Energy Services Inc. Reports 2025 Third Quarter Results

Executive Summary

• Ensign Energy Services reported Q3 2025 revenue of C$411.2 M (‑5% YoY) and Adjusted EBITDA of C$98.6 M (‑17% YoY), resulting in a net loss of C$3.3 M versus a net profit of C$5.3 M a year earlier.
• The company amended and restated its revolving credit facility, extending the maturity to 2028 and repaid the remaining balance of its Term Credit Facility (C$203.0 M). Total debt, net of cash, fell to C$925.0 M, a 13% reduction year‑over‑year.
• Capital expenditures for Q3 2025 were C$62.4 M (upgrade C$13.9 M, maintenance C$50.5 M). The firm reaffirmed its revised debt‑reduction target of C$600 M to be achieved in H1 2026 and outlined a 2025 capital budget of approximately C$154 M for maintenance and C$35.5 M for selective upgrades.

Key Details

• Revenue:
• Q3 2025 total C$411,157 K (‑5% YoY). Geographic split – Canada C$129,671 K (32%), U.S. C$217,307 K (53%), International C$64,179 K (15%).
• Adjusted EBITDA: C$98,596 K (‑17% YoY); Adjusted EBITDA per share $0.53 basic / $0.53 diluted.
• Net loss: $(3,263) K attributable to common shareholders; loss per share $(0.02).
• Funds flow from operations: C$88,221 K (‑25% YoY); per share $0.48 basic / $0.47 diluted.
• Debt repayment & credit facility:
• Amended/re‑stated revolving Credit Facility to $950.0 M with maturity extended to 29 Sep 2028.
• Repayment of Term Credit Facility balance C$203.0 M on 29 Sep 2025.
• Total debt, net of cash reduced to C$925.0 M (‑13% YoY).
• Capital expenditures: Net purchases of property & equipment C$62,449 K (Q3) and C$148,462 K (nine months); upgrade capital C$13,866 K, maintenance capital C$50,549 K.
• Operating highlights – rigs:
• Total marketed drilling rigs: 186 (‑8% YoY). Canada 88 (‑6%), U.S. 71 (‑8%), International 27 (‑13%).
• Operating days (Q3): Canada 3,509 (‑9%), U.S. 3,194 (+4%), International 935 (‑26%).
• Well servicing: Total rigs 88 (‑5% YoY). Canadian operating hours up 13%; U.S. operating hours down 24%.
• Liquidity: Cash C$16,733 K; available borrowing under Credit Facility C$28.1 M (undrawn). Combined cash + revolver $44.9 M as of 30 Sep 2025.
• Interest expense: C$18,371 K (‑23% YoY) reflecting lower debt levels and improved rates.
• Covenant compliance: Net Debt/EBITDA = 3.50 (vs. covenant 2.40), EBITDA/Interest = 5.23 (vs. covenant 3.00); all covenants met as of quarter‑end.
• Outlook & guidance: Revised debt‑reduction target of C$600 M now expected in H1 2026; 2025 maintenance capex budget ≈ C$154 M, upgrade capex ≈ C$35.5 M (including $19.0 M customer‑funded). Anticipated steady Canadian activity, modest U.S. improvement, and stable international operations despite geopolitical headwinds.

Notable Quotes

• “We remain committed to disciplined capital allocation, driving free cash flow generation, and debt repayment,” – CFO Michael Gray.

Materiality: Material – Negative (significant decline in earnings and net loss, coupled with material financing and operational updates).