Precision Drilling Announces 2025 Second Quarter Unaudited Financial Statements

Executive Summary

• Precision Drilling Corporation reported second-quarter 2025 results with revenue of $407 million and Adjusted EBITDA of $108 million, reflecting a decline from the prior year period due to lower U.S. and international activity and day rates.
• The company generated $147 million in cash from operations, allowing for the repayment of $74 million in debt and the repurchase of $14 million in common shares. Year-to-date, the company has reduced debt by $91 million and repurchased $45 million in shares.
• Precision revised its 2025 capital budget upward to $240 million (from $200 million) to fund upgrades for 22 Super Series rigs, driven by strong customer demand for Super Triple and Super Single rigs in North America.

Key Details

• Q2 2025 Financials:
  • Revenue: $407 million (including $7 million for customer-funded rig upgrades); down from $429 million in Q2 2024.
  • Adjusted EBITDA: $108 million (including $4 million share-based compensation); down from $115 million in Q2 2024.
  • Net Earnings Attributable to Shareholders: $16 million ($1.21 per share basic, $1.07 diluted); down from $21 million ($1.44 per share) in Q2 2024.
  • Cash Provided by Operations: $147 million.
• H1 2025 Financials:
  • Revenue: $903 million (down 6% from $957 million in H1 2024).
  • Adjusted EBITDA: $246 million (down 5% from $258 million in H1 2024).
  • Net Earnings Attributable to Shareholders: $51 million ($3.75 basic, $3.28 diluted).
  • Cash Provided by Operations: $211 million.
• Capital Allocation & Balance Sheet:
  • Debt Repayment: $74 million in Q2; $91 million year-to-date (including redemption of US$60 million of 2026 unsecured senior notes).
  • Share Repurchases: $14 million in Q2 (237,085 shares); $45 million year-to-date (646,058 shares).
  • Liquidity: Ended quarter with $47 million in cash and approximately $530 million in available liquidity.
  • Long-term Debt: Reduced to $546 million (from $812 million at Dec 31, 2024).
• Capital Expenditures:
  • Q2 CapEx: $53 million (YTD: $113 million).
  • 2025 Capital Budget Revised: Increased to $240 million from $200 million.
  • Plan: Upgrade 22 Super Series rigs to meet customer demand and drive revenue growth.
• Operational Highlights:
  • Canada: Averaged 50 active rigs (vs. 49 in Q2 2024); outpaced industry activity which declined 5%. Revenue per utilization day increased to C$37,725.
  • U.S.: Averaged 33 active rigs (vs. 36 in Q2 2024); however, rig utilization days increased 13% vs. Q1 2025 while industry declined 3%. Revenue per utilization day was US$31,113.
  • International: Averaged 7 active rigs (vs. 8 in Q2 2024); generated US$36 million in revenue.
  • Well Services: Revenue was $54 million (down $12 million YoY); service rig operating hours decreased 23% due to project deferrals, weather, and lower U.S. activity. The company wound down U.S. well servicing operations, selling certain assets and mobilizing others to Canada.
• Outlook:
  • Canada: Strong demand for Super Triple rigs expected as LNG Canada achieves run rate capacity; heavy oil activity supported by Trans Mountain pipeline expansion.
  • U.S.: Increasing natural gas drilling activity in Haynesville and Marcellus basins; expect to increase rig activity for remainder of year.
  • International: Expect 7 active rigs (5 in Kuwait, 2 in Saudi Arabia) for remainder of year under term contracts extending to 2027/2028.

Notable Quotes

• “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 are well above the midpoint of its annual guidance for both these targets [debt repayment and share repurchases]... confident in our ability to meet our 2025 targets.”
• “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...”