Total Energy outlines 2026 capex plan, raises dividend

Executive Summary

• Total Energy Services Inc. announced a preliminary 2026 capital expenditure budget of $55.8 million, split between $34.8 million for maintenance capital and $21.0 million for growth capital, to be funded by cash on hand and operating cash flow.
• The Board of Directors approved a 20% increase in the quarterly dividend to 12 cents per common share, effective for the quarter ended March 31, 2026.
• The growth capital focuses on constructing a new service rig for Australia (expected operational by Q2 2027) and expanding the North American natural gas compression fleet, while maintenance capital covers equipment recertification, new drill pipe, ERP system upgrades, and a US facility acquisition.

Key Details

• 2026 Capital Expenditure Budget: Total preliminary budget is $55.8 million.
  • Maintenance Capital ($34.8 million):
    • $28.4 million allocated to equipment maintenance, recertifications, and new drill pipe purchases.
    • $6.4 million in non-recurring costs, including $4.0 million for upgrading and harmonizing enterprise resource planning (ERP) systems across all business segments and $2.4 million for the acquisition of a leased operating facility in the United States (currently used by the Compression and Process Services segment).
  • Growth Capital ($21.0 million):
    • Primarily directed toward the construction of a new service rig for deployment in Australia, expected to be completed and commence operations by Q2 2027 under a long-term contract.
    • Continued growth of the North American natural gas compression fleet.
• Carryover Commitments: Approximately $24.5 million of 2025 capital expenditure commitments will carry into 2026, including:
  • Expansion of the CPS segment's fabrication capacity in the United States (expected completion Q1 2027).
  • Upgrade and reactivation of an idle Australian service rig (expected completion and operations Q2 2026).
  • Upgrades to several Canadian drilling rigs currently in operation.
• Dividend Increase:
  • Increase of 20% to the quarterly dividend.
  • New rate: 12 cents per common share.
  • Effective for the quarter ended March 31, 2026.
• Funding Source: The capital expenditure program is intended to be financed with cash on hand and cash flow from operations.

Notable Quotes

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