Precision Drilling Meets Annual Capital Allocation Targets and Provides Financial and Operational Updates

Executive Summary

• Precision Drilling reduced its 2025 debt by $101 million, meeting its annual debt‑reduction target and bringing total outstanding debt to $500 million.
• The company ended 2025 with ~$85 million cash and $447 million of total available liquidity, and returned $76 million to shareholders via share repurchases (6% reduction in shares outstanding).
• Management announced that Q4‑2025 results will be released on February 11 2026 and provided a detailed outlook for 2026 capital allocation, debt repayment, rig activity, and free‑cash‑flow expectations.

Key Details

• Debt Reduction: $101 million paid down in 2025; cumulative reduction of $535 million since 2022. Remaining obligations: US$400 million senior notes (6.875% due Jan 15 2029) and US$100 million drawn on Senior Credit Facility.
• Liquidity Position (12/31/2025): Cash ≈ $85 million; total available liquidity ≈ $447 million.
• Capital Allocation Framework: Commitment to repay $700 million of debt between 2022‑2027 and maintain Net Debt/Adjusted EBITDA < 1.0× (projected ~1.2× at year‑end 2025).
• Share Repurchases: $76 million returned in FY 2025 under Normal Course Issuer Bid; shares outstanding fell to 12,932,399 from 13,779,502 (‑6%).
• Free Cash Flow Outlook: Robust free cash flow expected in 2026 to support further debt reduction and increased share‑buyback allocation. Specific 2026 targets to be disclosed in February.
• Q4 2025 Financial Guidance: Results to be released Feb 11 2026; anticipated alignment with prior guidance for drilling field margins. Share‑based compensation projected at $6 million (quarter) and $24 million (full year). Expected non‑cash asset charge of ~$67 million from decommissioning 31 rigs, plus ~$17 million drill‑pipe charge.
• Rig Activity – Canada: Average active rig count Q4 2025 = 66; total 86 rigs operating; peak expected 87 rigs this winter (32 Super Triples, 47 Super Singles).
• Rig Activity – United States: Average active rigs Q4 2025 = 37; peak of 40 rigs. Natural‑gas rig count up 21% YoY.
• International Operations: Anticipated seven active rigs in 2026 (3 in Saudi Arabia, 4 in Kuwait) under long‑term contracts through 2027‑2028.
• Well Service Business: >115 service crews slated for early January 2026; additional crews to be deployed as market conditions evolve.

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… I am proud of our people’s commitment to Precision’s High Performance, High Value strategy…” – Carey Ford, President & CEO

Materiality Assessment: Material – Positive (significant debt repayment, liquidity strength, share‑repurchase activity, and forward‑looking operational guidance).