Precision Drilling Q2 Earnings Call Highlights

Precision Drilling NYSE: PDS reported higher second-quarter revenue as record Canadian drilling activity and a rebound in U.S. rig utilization offset weaker international results, while the company said it remains on track to reduce debt and repurchase shares during 2026.

Second-quarter revenue increased 11% from a year earlier, with North American revenue up 14% and international revenue down 11%, President and Chief Executive Officer Carey Ford said on the company’s earnings call. Year-to-date revenue has increased 8%, according to Ford. Adjusted EBITDA was C$97 million for the quarter, or C$95 million before a share-based compensation recovery, compared with C$108 million, or C$112 million before share-based compensation expense, in the prior-year quarter. Precision posted a net loss of C$1 million, compared with net earnings of C$16 million in the second quarter of 2025. Cash from operations totaled C$146 million, matching the prior-year quarter. The company spent C$76 million on capital expenditures, including C$46 million for sustaining and infrastructure investments and C$30 million for rig upgrades. It reduced debt by C$50 million and used C$12 million for share repurchases during the quarter.

Precision’s Canadian drilling business averaged a record 61 active rigs in the second quarter, up 11 rigs from a year earlier and one rig above its prior guidance. Reported daily operating margins were C$13,855, including C$3 million in customer upfront upgrade payments. Excluding those payments, normalized daily operating margins were C$13,331, above the upper end of the company’s previous guidance range but below C$13,866 a year earlier. Chief Financial Officer Dustin Honing said the year-over-year margin difference reflected rig mix, including a larger proportion of Super Singles and doubles operating during the spring season. For the third quarter, Precision expects Canadian average rig activity in the low-to-mid-70s, compared with 63 rigs in the prior-year third quarter. Daily operating margins are expected to range from C$12,000 to C$13,000 as more Super Singles work. Ford said the company expects its Super Triple and Super Single fleets to be fully utilized through year-end and expects Canadian activity to remain between 70 and 80 rigs during the third and fourth quarters. The company was operating 75 Canadian rigs at the time of the call and expected to reach 80 rigs within two weeks. Its Canadian fleet includes 32 Super Triple rigs available for Montney and related natural gas and condensate markets, as well as 48 Super Singles available for SAGD, Clearwater and other heavy-oil applications. Ford said Precision expects to deliver its 20th Super Single pad rig in September, followed by major Super Triple upgrades in October and November. While the company has increased some Canadian prices, Ford said broader pricing momentum has not yet fully emerged. New upgraded rigs entering service should support fleet pricing because they will be positioned at the top of the market, he added.

In the U.S., Precision averaged 35 active rigs in the second quarter, down from 37 sequentially but up from 33 a year earlier. Daily operating margins fell to C$6,212 from C$9,291 in the first quarter, below the company’s prior guidance range. Honing attributed the decline primarily to rig reactivation costs. Precision increased its U.S. operating rig count from 32 in April to 42 at June 30, including seven major reactivations during the quarter. Revenue per utilization day increased because of stronger pricing and greater technology adoption, he said, but the costs of staffing and preparing rigs for deployment weighed on prof...