Ensign Energy Services Inc. Reports 2025 Second Quarter Results

Executive Summary

• Ensign Energy Services Inc. reported a net loss of $26.4 million ($0.14 per share) for the second quarter of 2025, compared to a net loss of $4.5 million in the same period of 2024.
• Revenue decreased 5% year-over-year to $372.4 million, driven by lower operating activity in the United States and International regions, partially offset by a positive foreign exchange translation effect.
• Adjusted EBITDA fell 19% to $81.4 million, while Funds Flow from Operations declined 26% to $72.5 million. The company continues to prioritize debt reduction, having repaid $19.7 million in debt during the quarter.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Revenue: $372.4 million (down 5% from $391.8 million).
  • Adjusted EBITDA: $81.4 million (down 19% from $100.2 million).
  • Net Loss: $26.4 million (vs. $4.5 million loss in prior year).
  • Funds Flow from Operations: $72.5 million (down 26% from $98.3 million).
  • Basic EPS: $(0.14) (vs. $(0.02) in prior year).
  • Diluted EPS: $(0.14) (vs. $(0.02) in prior year).
• Financial Performance (Six Months Ended June 30, 2025):
  • Revenue: $808.9 million (down 2% from $823.1 million).
  • Adjusted EBITDA: $183.7 million (down 16% from $217.7 million).
  • Net Loss: $22.7 million (vs. $5.8 million loss in prior year).
  • Funds Flow from Operations: $169.1 million (down 18% from $206.7 million).
• Debt and Liquidity:
  • Total debt, net of cash: $955.0 million (down 15% from $1.12 billion in Q2 2024).
  • Debt Repayments: $19.7 million repaid in Q2 2025; $42.9 million repaid in H1 2025.
  • Debt Reduction Target: On track to achieve $600.0 million reduction from 2023-2025; $119.8 million remaining to target.
  • Available Liquidity: $20.9 million as of June 30, 2025 (Cash $14.97M + $5.9M undrawn revolver).
  • Credit Facility: $750.0 million facility maturing October 2026; scheduled reductions of $25.0 million in Q3 and Q4 2025 to reach $700.0 million.
  • Convertible Debentures: $25.0 million issued Dec 2024, 7.5% interest, maturing Jan 2029, conversion price $3.50.
• Operating Highlights:
  • Drilling Rigs (Marketed): 186 total (down 8% from 202).
    • Canada: 88 rigs (2,494 operating days, +2% YoY).
    • United States: 71 rigs (2,943 operating days, +1% YoY).
    • International: 27 rigs (1,081 operating days, -14% YoY).
  • Well Servicing Rigs: 88 total (down 4% from 92).
    • Canada: 41 rigs (11,987 operating hours, flat YoY).
    • United States: 47 rigs (25,747 operating hours, -27% YoY).
• Capital Expenditures:
  • Net CapEx: $49.2 million in Q2 2025 ($13.3M upgrade, $37.4M maintenance).
  • 2025 Guidance: ~$154.0 million maintenance capex and ~$30.5 million selective upgrade capex (of which $19.0M is customer-funded).
  • Upgrade projects include two drilling rigs in Oman expected to begin operations in H1 2026 under a five-year contract.
• Regional Revenue Breakdown (Q2 2025):
  • Canada: $100.8 million (27% of total).
  • United States: $197.2 million (53% of total).
  • International: $74.4 million (20% of total).
• Outlook and Activity:
  • Canadian activity expected to improve in Q3 2025 due to positive market conditions, though potential US tariffs remain a risk.
  • US activity expected to remain steady or modestly improve in H2 2025.
  • International activity expected to improve exiting the year due to a two-rig award in Oman.
  • Venezuela operations suspended for remainder of 2025 due to US sanction waiver changes.
  • Argentina activity expected to remain at one rig in Q3 2025, returning to two rigs in Q4.
  • Australia expected to increase to five active rigs in Q3 2025.

Notable Quotes

• "The oilfield services sector maintains a generally constructive outlook despite a year-over-year activity decline in some operating regions. Geopolitical tensions and global trade uncertainties have kept activity in the United States subdued and reinforced customer capital discipline in regard to drilling programs."
• "The Company remains committed to disciplined capital allocation, driving free cash flow generation, and debt repayment."