Precision reduces debt by $101-million in 2025

Executive Summary

• Precision Drilling Corp. achieved its 2025 debt reduction target, reducing debt by $101 million and ending the year with approximately $447 million in total liquidity.
• The company returned $76 million to shareholders via share repurchases in 2025, meeting its annual target, and plans to increase buyback allocations in 2026.
• The company reported significant non-cash charges for 2025, including $67 million for rig decommissioning and $17 million for drill pipe, while maintaining robust operational activity with 86 active rigs in Canada and 37 in the US.

Key Details

• Debt Reduction: Reduced debt by $101 million in 2025. Outstanding debt as of Dec 31, 2025, included $400 million in 6.875% unsecured senior notes due Jan 15, 2029, and $100 million drawn on the senior credit facility.
• Liquidity: Ended 2025 with a cash balance of approximately $85 million and total available liquidity of approximately $447 million.
• Capital Allocation: Returned $76 million to shareholders through share repurchases under the normal course issuer bid. Share count decreased by 6% from 13,779,502 (Dec 31, 2024) to 12,932,399 (Dec 31, 2025).
• Debt Targets: Maintains commitment to repaying $700 million between 2022 and 2027. Net debt to adjusted EBITDA leverage ratio expected to be approximately 1.2 times as at Dec 31, 2025.
• Interest Expense: Annual run rate interest expense is approximately $34 million (U.S.) as of Dec 31, 2025, down from $104 million (U.S.) in 2016.
• Non-Cash Charges (2025):
  • Approximately $67 million non-cash asset charge for decommissioning 31 of 215 marketable rigs.
  • Approximately $17 million non-cash charge related to drill pipe due to reduced useful life from complex drilling programs.
• Share-Based Compensation: Expected to be approximately $6 million for Q4 2025 and $24 million for the full year 2025.
• Q4 2025 Guidance: Drilling field margins in Canada and the US expected to align with previous guidance.
• Operational Activity (Canada): Average active rig count of 66 in Q4. Currently 86 rigs active, peaking at 87 this winter. 32 Super Triples and 47 available Super Single rigs fully utilized.
• Operational Activity (US): Averaged 37 rigs in Q4, peaking at 40. Natural gas rig count increased 21% in 2025. Currently 37 rigs operating.
• International Operations: Expects 7 active rigs in 2026 (3 in Saudi Arabia, 4 in Kuwait) with long-term contracts extending into 2027/2028.
• Well Services: More than 115 service crews anticipated to be active in early January 2026.
• Future Plans: Specific capital allocation plans and targets for 2026 to be provided in February 2026.

Notable Quotes

• "Precision generated substantial free cash flow in 2025, allowing us to not only meet our debt reduction and share repurchase targets but also upgrade 27 of our Super Series rigs to meet the needs of our customers. With a durable free cash flow outlook, we plan to improve our capital returns to shareholders in 2026 by continuing to reduce debt and increasing the percentage of free cash flow returned directly to shareholders." — Carey Ford, President and Chief Executive Officer