Q3 2025 Precision Drilling Corp Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the Precision Drilling Corporation Q3 2025 Results Conference Call and Webcast. I would now like to hand the conference over to Lavonne Zdunich, Vice President of Investor Relations. Please go ahead.

Dustin Honing: Good day and thanks for standing by. Welcome to the Precision Drilling Corporation 2025 third quarter results conference call and webcast. I would now like to hand the conference over to Lavonne Zdunich, Vice President of Investor Relations. Please go ahead.

Speaker #2: Good day, and thank you for standing by. Welcome to the Precision Drilling Corp. 2025 Third Quarter Results Conference Call and Webcast.

Speaker #2: I would now like to hand the conference over to Lavonne Zdunich Vice President of Investor Relations . Please go ahead .

Lavonne Zdunich: Good morning, and thank you for joining Precision Drilling's Q3 conference call and webcast. Earlier this month, we announced the retirement of Kevin Neveu and the appointment of Carey Ford to President and Chief Executive Officer, Gene Stahl to Chief Operating Officer, and Dustin Honing to Chief Financial Officer. Kevin retires after serving as President and CEO for one of the longest tenures of any oil field service CEO. We would like to thank Kevin for his many contributions during his time with PD. Before I pass the call over to Carey and Dustin today, I would like to recap some of our Q3 highlights. Precision Drilling activity outperformed industry, and our US drilling activity continues to grow. Our operating margins are resilient and within guidance.

Lavonne Zdunich: Good morning and thank you for joining Precision Drilling Corporation's third quarter conference call and webcast. Earlier this month, we announced the retirement of Kevin Neveu and the appointment of Carey Ford to President and Chief Executive Officer, Jean Stahl to Chief Operating Officer, and Dustin Honing to Chief Financial Officer. Kevin retires after serving as President and CEO for one of the longest tenures of any oilfield service CEO. We would like to thank Kevin for his many contributions during his time with Precision Drilling Corporation. Before I pass the call over to Carey and Dustin today, I would like to recap some of our Q3 highlights. Precision Drilling Corporation activity outperformed industry, and our U.S. drilling activity continues to grow. Our operating margins are resilient and within guidance.

Speaker #3: Good morning , and thank you for joining Precision Drilling Corp third quarter conference call and webcast . Earlier this month , we announced the retirement of Kevin Neveu and the appointment of Carey Ford to President and Chief Executive Officer .

Speaker #3: Gene Stahl to chief operating Officer . And Dustin Honing to chief financial officer . Kevin retires after serving as president and CEO for one of the longest tenures of any oilfield service CEO .

Speaker #3: We would like to thank Kevin for his many contributions during his time with PD . Before I pass the call over to Kerry and Dustin today , I would like to recap some of our Q3 highlights .

Speaker #3: Precision Drilling activity outperformed industry expectations, and our U.S. drilling activity continues to grow. Our operating margins are resilient and within guidance. We increased our 2025 capital budget by $20 million to allow for five additional contracted rig upgrades.

Lavonne Zdunich: We increased our 2025 capital budget by $20 million to allow for five additional contracted rig upgrades, as several of our Canadian and U.S. customers are taking a long-term view of demand for energy. Finally, we are on track to meet our 2025 capital allocation plans, having already achieved our debt reduction target. Please note that some comments today will refer to non-IFRS financial measures and include forward-looking statements, which are subject to a number of risks and uncertainties. For more information on financial measures, forward-looking statements, and risk factors, please refer to our news release and other regulatory filings available on SEDAR and EDGAR. With that, I will turn it over to Dustin Honing, our new CFO.

Lavonne Zdunich: We increased our 2025 capital budget by CAD 20 million to allow for five additional contracted rig upgrades as several of our Canadian and US customers are taking a long-term view of demand for energy. Finally, we are on track to meet our 2025 capital allocation plans, having already achieved our debt reduction target. Please note that some comments today will refer to non-IFRS financial measures and include forward-looking statements which are subject to a number of risks and uncertainties. For more information on financial measures, forward-looking statements, and risk factors, please refer to our news release and other regulatory filings available on SEDAR and EDGAR. With that, I will turn it over to Dustin Honing, our new CFO.

Speaker #3: As several of our Canadian and US customers are taking a long term view of demand for energy . And finally , we are on track to meet our 2025 capital allocation plans .

Speaker #3: Having already achieved our debt reduction target . Please note that some comments today will refer to non IFRS , non IFRS financial measures and include forward looking statements which are subject to a number of risks and uncertainties .

Speaker #3: For more information on financial measures, forward-looking statements, and risk factors, please refer to our news release and other regulatory filings available on CD-R.

Speaker #3: And Edgar . With that , I will turn it over to Dustin , honing our new CFO .

Dustin Honing: Thank you, Lavon, and good morning or good afternoon, depending on where you're calling today. Our Q3 results demonstrate Precision's commitment to delivering on our strategic priorities in positioning the business for long-term success. We recorded adjusted EBITDA of CAD 118 million, which equates to CAD 129 million before share-based compensation expense, compared with prior year EBITDA of CAD 142 million. In Canada, drilling activity averaged 63 active rigs, a decrease of 9 rigs from Q3 2024, resulting from customer projects being deferred to the upcoming winter season. Our reported Q3 daily operating margins were CAD 13,007 a day compared to CAD 12,877 a day in Q3 2024, well within our prior guidance range.

Dustin Honing: Thank you, Lavonne, and good morning or good afternoon, depending on where you're calling today. Our Q3 results demonstrate Precision's commitment to delivering on our strategic priorities in positioning the business for long-term success. We recorded adjusted EBITDA of $118 million, which equates to $129 million before share-based compensation expense, compared with prior year EBITDA of $142 million. In Canada, drilling activity averaged 63 active rigs, a decrease of nine rigs from Q3 2024, resulting from customer projects being deferred to the upcoming winter season. Our reported Q3 daily operating margins were $13,007 a day, compared to $12,877 a day in the third quarter of 2024, well within our prior guidance range. In the U.S., we averaged 36 rigs, an increase of three rigs from the previous quarter, primarily due to Precision's strength in gas-weighted basins. In Q3, daily operating margins for the quarter were steady at U.S.

Speaker #4: Thank you . Lavon , and good morning or good afternoon , depending on where you're calling today . Our Q3 results demonstrate Precision's commitment to delivering on our strategic priorities and positioning the business for long term success .

Speaker #4: We recorded adjusted EBITDA of $118 million, which equates to $129 million before share-based compensation expense, compared with prior year EBITDA of $142 million.

Speaker #4: In Canada , drilling activity averaged 63 active rigs , a decrease of nine rigs from Q3 2020 . Four , resulting from customer projects being deferred to the upcoming winter season .

Speaker #4: A reported Q3 daily operating margins were $13,007 a day , compared to $12,877 a day in the third quarter of 2020 . Four .

Speaker #4: Well within our prior guidance range . In the US , we averaged 36 rigs , an increase of three rigs from the previous quarter , primarily due to precision strength in gas weighted basins .

Dustin Honing: In the US, we averaged 36 rigs, an increase of 3 rigs from the previous quarter, primarily due to Precision's strength in gas-weighted basins. In Q3, daily operating margins for the quarter were steady at $8,700 a day compared to $9,026 per day in the Q2, also within our prior guidance range. With favorable positioning in the US natural gas market, we continued to add to our US rig count, which has increased from a low of 27 rigs in Q1 to a high of 40 rigs today, a reflection of strong field performance recognized by our customers and the efforts of our sales team. While contract churn continues to challenge activity levels, we are encouraged by the quantity and quality of conversations tied to future opportunities in all basins.

Speaker #4: In Q3 , daily operating margins for the quarter were steady at US $8,700 a day , compared to US $9,026 per day in the second quarter .

Dustin Honing: $8,700 a day, compared to U.S. $9,026 per day in the second quarter, also within our prior guidance range. With favorable positioning in the U.S. natural gas market, we continued to add to our U.S. rig count, which has increased from a low of 27 rigs in Q1 to a high of 40 rigs today, a reflection of strong field performance recognized by our customers and the efforts of our sales team. While contract churn continues to challenge activity levels, we are encouraged by the quantity and quality of conversations tied to future opportunities in all basins. Internationally, Precision's drilling activity averaged seven rigs, down from eight rigs in prior year Q3. International day rates averaged U.S. $53,811 a day, an increase of 14% from prior year Q3 due to rigs' recertification with non-billable days recognized in 2024.

Speaker #4: Also , within our prior guidance , range , with favorable positioning in the US , natural gas market . We continued to add to our US rig count , which is increased from a low of 27 rigs in Q1 to a high of 40 rigs today .

Speaker #4: A reflection of strong field performance recognized by our customers and the efforts of our sales team. While contract churn continues to challenge activity levels, we are encouraged by the quantity and quality of conversations tied to future opportunities in all basins.

Dustin Honing: Internationally, Precision Drilling's drilling activity averaged 7 rigs, down from 8 rigs in prior year Q3. International day rates averaged US $53,811 a day, an increase of 14% from prior year Q3 due to rigs recertification with non-billable days recognized in 2024. In our C&P segment, adjusted EBITDA was CAD 19.3 million, which compares to CAD 19.7 million from prior year Q3. Our strong presence in Canada's heavy oil and unconventional natural gas markets, combined with our favorable positioning in the US, has provided us the ability to capitalize on rig upgrade opportunities underpinned by firm customer contract commitments.

Speaker #4: Internationally , precision drilling activity averaged seven rakes , down from eight rigs in prior year Q3 . International day rates averaged US $53,811 a day , an increase of 14% from prior year .

Speaker #4: Q3 due to rigs recertification , with Non-billable days recognized in 2024 . In our CMP segment . Adjusted EBITDA was 19.3 million , which compares to 19.7 million from prior year Q3 .

Dustin Honing: In our CPS segment, adjusted EBITDA was $19.3 million, which compares to $19.7 million from prior year Q3. Our strong presence in Canada's heavy oil and unconventional natural gas markets, combined with our favorable positioning in the U.S., has provided us the ability to capitalize on rig upgrade opportunities underpinned by firm customer contract commitments. During the quarter, we increased our planned 2025 capital expenditures from $240 million to $260 million, comprised of $151 million for sustaining and infrastructure and $109 million for upgrade and expansion. The plan is inclusive of five additional contract-backed upgrades added this quarter. Our added contracted backlog in the third quarter far exceeds the increase in our 2025 capital plan, ensuring strong financial returns as we strengthen both the marketability of our rig fleet and customer alignment in key regions. Even with this increase in capital, we remain firmly committed to our strategic priorities.

Speaker #4: Our strong presence in Canada's heavy oil and unconventional natural gas markets, combined with our favorable positioning in the U.S., has provided us the ability to capitalize on rig upgrade opportunities underpinned by firm customer contract commitments.

Dustin Honing: During the quarter, we increased our planned 2025 capital expenditures from CAD 240 million to CAD 260 million, comprised of CAD 151 million for sustaining and infrastructure and CAD 109 million for upgrade and expansion. The plan is inclusive of five additional contract-backed upgrades added this quarter. Our added contracted backlog in Q3 far exceeds the increase in our 2025 capital plan, ensuring strong financial returns as we strengthen both the marketability of our rig fleet and customer alignment in key regions. Even with this increase in capital, we remain firmly committed to our strategic priorities.

Speaker #4: During the quarter , we increased our planned 2025 capital expenditures from 240 million to 260 million , comprised of 151 million for sustaining and infrastructure and 109 million for upgrade and expansion .

Speaker #4: The plan is inclusive of five additional contract backed upgrades added this quarter . Our added contracted backlog in the third quarter , far exceeds the increase in our 2025 capital plan , ensuring strong financial returns as we strengthen both the marketability of our rig fleet and customer alignment and key regions .

Speaker #4: Even with this increase in capital , we remain firmly committed to our strategic priorities . As of September 30th , we've met our annual debt reduction target , reducing our debt by $101 million and are well on our way to allocating between 35% and 45% of our free cash flow to share buybacks .

Dustin Honing: As of September 30, we've met our annual debt reduction target, reducing our debt by $101 million, and are well on our way to allocating between 35% and 45% of our free cash flow to share buybacks. We have repurchased $54 million worth of shares during the first nine months of the year. Moving on to forward guidance, I will begin with our expectations for the fourth quarter. While our outlook for the remainder of the year remains positive, it will continue to be commodity price dependent. In Canada, we are expecting activity for this year's winter drilling season to meet or slightly exceed last year's winter activity. Q4 rig counts should be similar to Q4 2024, which averaged 65 rigs. Keep in mind this includes the seasonal slowdown for Christmas holidays. Our operating margins in Canada are expected to range between $14,000 and $15,000 per day.

Dustin Honing: As of 30 September, we've met our annual debt reduction target, reducing our debt by CAD 101 million, and are well on our way to allocating between 35% and 45% of our free cash flow to share buybacks. We have repurchased CAD 54 million worth of shares during the 9 months of the year. Moving on to forward guidance. I will begin with our expectations for Q4. While our outlook for the remainder of the year remains positive, it will continue to be commodity price dependent. In Canada, we are expecting activity for this year's winter drilling season to meet or slightly exceed last year's winter activity. Q4 rig counts should be similar to Q4 2024, which averaged 65 rigs. Keep in mind, this includes the seasonal slowdown for Christmas holidays.

Speaker #4: We have repurchased one . 50 . Sorry , we have repurchased $54 million worth of shares during the first nine months of the year .

Speaker #4: Moving on to forward guidance , I will begin with our expected expectations for the fourth quarter . While our outlook for the remainder of the year remains positive , it will continue to be commodity price dependent in Canada , we are expecting activity for this year's winter drilling season to meet or slightly exceed last year's winter activity .

Speaker #4: Q4 rig counts should be similar to Q4 2024, which averaged 65 rigs. Keep in mind this includes the seasonal slowdown for the Christmas holidays.

Dustin Honing: Our operating margins in Canada are expected to range between CAD 14,000 and 15,000 per day. In the US, we expect to sustain the momentum we have experienced in the last 2 quarters with an average active rig count in Q4 within the upper 30s. For Q4, we expect our margins to remain stable, ranging between US 8,000 and 9,000 per day. Moving to guidance for the full year, we expect depreciation of approximately CAD 300 million and cash interest expense of approximately CAD 65 million remaining unchanged from prior guidance. Our effective tax rate will be approximately 45% to 50% due to increased deferred income tax expense related to the momentum of our US operations.

Speaker #4: Our operating margins in Canada are expected to range between 14,015 thousand per day in the US , we expect to sustain the momentum we have experienced in the last two quarters , with an average active rig count in Q4 within the upper 30s .

Dustin Honing: In the U.S., we expect to sustain the momentum we have experienced in the last two quarters, with an average active rig count in Q4 within the upper 30s. For the fourth quarter, we expect our margins to remain stable, ranging between U.S. $8,000 and U.S. $9,000 per day. Moving to guidance for the full year, we expect depreciation of approximately $300 million and cash interest expense of approximately $65 million, remaining unchanged from prior guidance. Our effective tax rate will be approximately 45% to 50% due to increased deferred income tax expense related to the momentum of our U.S. operations. Cash taxes are expected to remain low in 2025, and looking to 2026, we expect to return to our traditional effective tax range within 25% to 30%, with cash taxes again remaining low. For 2025, we expect SG&A of approximately $90 to $95 million before share-based compensation expense.

Speaker #4: For the fourth quarter , we expect our margins to remain stable , ranging between US 8000 and US $9,000 per day . Moving to guidance for the full year , we expect depreciation of approximately 300 million and cash interest expense of approximately 65 million remaining , unchanged from prior guidance .

Speaker #4: Our effective tax rate will be approximately 45 to 50% due to increased deferred income tax expense related to the momentum of our US operations .

Dustin Honing: Cash taxes are expected to remain low in 2025 and looking to 2026, we expect to return to our traditional effective tax range within 25% to 30% with cash taxes again remaining low. For 2025, we expect SG&A of approximately CAD 90 to 95 million before share-based compensation expense. We refined our share-based compensation guidance for the year and now expect to range in between CAD 5 million and CAD 30 million, assuming a share price of CAD 60 to CAD 100. Our long-term target to achieve net debt to adjusted EBITDA of less than 1x remains firmly in place, as does our plan to increase our free cash flow allocated directly to shareholders towards 50%.

Speaker #4: Cash taxes are expected to remain low in 2025 , and looking to 2026 , we expect to return to our traditional effective tax range within 25 to 30% with cash taxes again remaining low for 2025 .

Speaker #4: We expect Cigna to be approximately $90 to $95 million before share-based compensation expense. We refined our share-based compensation guidance for the year, and now expect it to range between $5 million and $30 million, assuming a share price of $60 to $100.

Dustin Honing: We have refined our share-based compensation guidance for the year and now expect to range in between $5 and $30 million, assuming a share price of $60 to $100. Our long-term target to achieve net debt to adjusted EBITDA of less than one times remains firmly in place, as does our plan to increase our free cash flow allocated directly to shareholders towards 50%. Our net debt to trailing 12-month EBITDA ratio is approximately 1.3 times, with an average cost of debt of 6.6%, and we have over $400 million in total liquidity today. With that, I will pass it over to Carey.

Speaker #4: Our long term target to achieve net debt to adjusted EBITDA of less than one times remains firmly in place , as does our plan to increase our free cash flow allocated directly to shareholders towards 50% .

Dustin Honing: Our net debt to trailing 12-month EBITDA ratio is approximately 1.3x, with an average cost of debt of 6.6%, and we have over CAD 400 million in total liquidity today. With that, I will pass it over to Carey.

Speaker #4: Our net debt to trailing 12 month EBITDA ratio is approximately 1.3 times , with an average cost of debt of 6.6% , and we have over 400 million in total liquidity today .

Speaker #4: With that , I will pass it over to Carrie . Thank you , Dustin , and good morning and good afternoon . First , I would also like to acknowledge Kevin for his accomplishments and contributions to precision over his 18 years as CEO .

Carey Ford: Thank you, Dustin, good morning and good afternoon. First, I would also like to acknowledge Kevin for his accomplishments and contributions to Precision over his 18 years as CEO. His commitment to high performance and ability to grow the business while navigating industry cycles have certainly left their mark on the company. We wish him well in retirement. Precision is today the leading land driller in Canada, a leader in drilling technology, a high-performance driller in the Middle East, a leading driller in the US, and the largest and highest performing well service provider in Canada. The company has a multi-year track record of generating sizable cash flows and now has a strong balance sheet approaching 1 times leverage. In short, Precision is well-positioned for its next phase of growth. Precision is undoubtedly one of the truly exceptional companies in the energy industry.

Carey Ford: Thank you, Dustin, and good morning and good afternoon. First, I would also like to acknowledge Kevin for his accomplishments and contributions to Precision over his 18 years as CEO. His commitment to high performance and ability to grow the business while navigating industry cycles has certainly left a mark on the company. We wish him well in retirement. Precision is today the leading land driller in Canada, a leader in drilling technology, a high-performance driller in the Middle East, a leading driller in the U.S., and the largest and highest performing well service provider in Canada. The company has a multi-year track record of generating sizable cash flows and now has a strong balance sheet approaching one-time's leverage. In short, Precision is well positioned for its next phase of growth. Precision is undoubtedly one of the truly exceptional companies in the energy industry.

Speaker #4: His commitment to high performance and ability to grow the business while navigating industry cycles have certainly left their mark on the company . We wish him well in retirement .

Speaker #4: Precision is today the leading land drilling in Canada , a leader in drilling technology , a high performance driller in the Middle East , a leading driller in the US and the largest and highest performing well service provider in Canada .

Speaker #4: The company has a multi-year track record of generating sizable cash flows and now has a strong balance sheet approaching one times leverage . In short , precision is well positioned for its next phase of growth .

Speaker #4: Precision is undoubtedly one of the truly exceptional companies in the energy industry . What sets us apart is our culture , shared passion , commitment to supporting the field , enthusiasm for serving customers and deep desire to be the best .

Carey Ford: What sets us apart is our culture, shared passion, commitment to supporting the field, enthusiasm for serving customers, and deep desire to be the best. Precision's culture, core values, and people will continue to be the foundation for our success. For our investors, the Precision team will remain excellent stewards of capital and will follow through with our commitments, which include our plans for long-term debt reduction and increasing direct returns to shareholders. We will continue to be agile and run lean, and we'll be prepared for whatever challenges the commodity market has in store for us. For our customers, we are committed to safety, consistency, reliability, and technology that drives performance, reduces costs, and delivers the highest quality well bores. For our employees, Precision will continue to be a fantastic place to work, develop your career, and call home.

Carey Ford: What sets us apart is our culture, shared passion, commitment to supporting the field, enthusiasm for serving customers, and deep desire to be the best. Precision's culture, core values, and people will continue to be the foundation for our success. For our investors, the Precision team will remain excellent stewards of capital and will follow through with our commitments, which include our plans for long-term debt reduction and increasing direct returns to shareholders. We will continue to be agile and run lean, and we'll be prepared for whatever challenges the commodity market has in store for us. For our customers, we are committed to safety, consistency, reliability, and technology that drives performance, reduces cost, and delivers the highest quality well bores. For our employees, Precision will continue to be a fantastic place to work, develop your career, and call home.

Speaker #4: Precision , culture , core values and people will continue to be the foundation for our success , for our investors . The precision team will remain excellent stewards of capital and will follow through with our commitments , which include our plans for long term debt reduction and increasing direct returns to shareholders .

Speaker #4: We will continue to be agile, run lean, and be prepared for whatever challenges the commodity market has in store for us.

Speaker #4: For our customers . We are committed to safety , consistency , reliability and technology that drives performance , reduces costs and delivers the highest quality Wellbores for our employees .

Speaker #4: Precision will continue to be a fantastic place to work . Develop your career and call home . Case in point precision just completed a leadership transition in which the company filled three key positions , all with internal candidates and our leadership team will not skip a beat .

Carey Ford: Case in point, Precision just completed a leadership transition in which the company filled three key positions, all with internal candidates, and our leadership team will not skip a beat. Jean, Shuja, Veronica, Tom, Darren, and I have been working together on the leadership team for nearly a decade, and I look forward to the success this team will accomplish over the next stretch. I am pleased to welcome Dustin to the executive leadership team as he steps into the Chief Financial Officer role. Some on the call will remember Dustin when he oversaw our investor relations and corporate development efforts over the 2018 to 2020 period. Over the past five years, Dustin has been a key driver of our financial performance, working hand in hand with the sales and operations teams in both our contract drilling and Completion and Production Services segments.

Carey Ford: Case in point, Precision just completed a leadership transition in which the company filled 3 key positions, all with internal candidates, and our leadership team will not skip a beat. Gene, Shuja, Veronica, Tom, Darren, and I have been working together on the leadership team for nearly a decade, and I look forward to the success this team will accomplish over the next stretch. I am pleased to welcome Dustin to the executive leadership team as he steps into the Chief Financial Officer role. Some on the call will remember Dustin when he oversaw our investor relations and corporate development efforts over the 2018 to 2020 period. Over the past 5 years, Dustin has been a key driver of our financial performance, working hand-in-hand with the sales and operations teams in both our Contract Drilling and Completion and Production Services segments.

Speaker #4: Jean Shuja , Veronica , Tom , Darren and I have been working together on the leadership team for nearly a decade , and I look forward to the success this team will accomplish over the next stretch .

Speaker #4: I am pleased to welcome Dustin to the Executive Leadership team as he steps into the Chief Financial Officer role . Some on the call will remember Dustin when he oversaw our Investor relations and Corporate development efforts over the 2018 to 2020 period and over the past five years , Dustin has been a key driver of our financial performance , working hand in hand with the sales and operations teams in both our contract drilling and completion and production services segments .

Carey Ford: I'm excited about Dustin's performance-driven mindset and his future contributions to Precision in his new role. I also want to extend my congratulations to Jean Stahl on his new role as Chief Operating Officer. This is a well-deserved recognition of Jean's excellent leadership of Precision in the field, with customers, and within the industry. I'm truly honored to have the opportunity to lead such an outstanding team. As we dive into Precision's third quarter performance, I want to make sure for the listener that I link together how our competitive strategy, execution, and capital deployment not only support the financial results which we publish, but also position Precision Drilling for future success. Three pillars of our strategy that underpin our performance are leveraging our scale, utilizing technology to drive rig performance, and customer focus. I'll start with leveraging our scale.

Carey Ford: I'm excited about Dustin's performance-driven mindset and his future contributions to Precision in his new role. I also wanna extend my congratulations to Gene Stahl on his new role as Chief Operating Officer. This is a well-deserved recognition of Gene's excellent leadership of Precision in the field, with customers, and within the industry. I'm truly honored to have the opportunity to lead such an outstanding team. As we dive into Precision's Q3 performance, I wanna make sure for the listener that I link together how our competitive strategy, execution, and capital deployment not only support the financial results which we publish but also position Precision Drilling for future success. Three pillars of our strategy that underprint our performance are leveraging our scale, utilizing technology to drive rig performance, and customer focus. I'll start with leveraging our scale.

Speaker #4: I'm excited about Dustin's performance driven mindset and his future contributions to precision in his new role . I also want to extend my congratulations to Gene Stahl on his new role as Chief Operating Officer .

Speaker #4: This is a well-deserved recognition of Gene's excellent leadership of precision in the field , with customers and within the industry . I'm truly honored to have the opportunity to lead such an outstanding team .

Speaker #4: As we dive into Precision's third quarter performance , I want to make sure for the listener that I link together how our competitive strategy , execution and capital deployment not only support the financial results which we publish , but also position precision drilling for future success .

Speaker #4: Three pillars of our strategy that underpin our performance are leveraging our scale , utilizing technology to drive rig performance and customer focus . I'll start with leveraging our scale .

Carey Ford: Precision is running 115 drilling rigs and 80 well service rigs today, with rig support systems and over 5,000 employees serving customers across North America and the Middle East. Our scale enables us to seize opportunities and secure attractive returns for our investors. For instance, during the quarter, we mobilized two super triple rigs from the U.S. to Canada and performed major upgrades to prepare the rigs for the winter drilling programs. One of the rigs is already drilling, and the second rig should leave our Niskiyard next week. These rig mobilizations were part of a larger multi-year customer contract where we repositioned and reactivated five rigs in total. The creative contract structure, mobilization of assets, and quality and speed of the upgrades could not have been possible without Precision's scale and vertically integrated support functions. We also demonstrated the benefits of scale and geographic positioning in the U.S.

Carey Ford: Precision is running 115 drilling rigs and 80 well service rigs today, with rigs, support systems, and over 5,000 employees serving customers across North America and the Middle East. Our scale enables us to seize opportunities and secure attractive returns for our investors. For instance, during the quarter, we mobilized 2 Super Triple rigs from the US to Canada and performed major upgrades to prepare the rigs for the winter drilling programs. One of the rigs is already drilling, and the second rig should leave our Nisku yard next week. These rig mobilizations were part of a larger multi-year customer contract where we repositioned and reactivated 5 rigs in total. The creative contract structure, mobilization of assets, and quality and speed of the upgrades could not have been possible without Precision's scale and vertically integrated support functions.

Speaker #4: Precision is running 115 drilling rigs and 80 well service rigs today , with rigs , support systems and over 5000 employees serving customers across North America and the Middle East .

Speaker #4: Our scale enables us to seize opportunities and secure attractive returns for our investors . For instance , during the quarter , we mobilized two rigs from the US to Canada and performed major upgrades to prepare the rigs for the winter drilling programs .

Speaker #4: One of the rigs is already drilling , and the second rig should leave our Nisku yard next week . These rig mobilizations were part of a larger , multi-year customer contract where we repositioned and reactivated five rigs in total .

Speaker #4: The creative contract structure , mobilization of assets and quality and speed of the upgrades could not have been possible without the precision scale and vertically integrated support functions .

Carey Ford: We also demonstrated the benefits of scale and geographic positioning in the US market, where our strength in gas basins positioned us to capitalize on attractive contracted upgrade opportunities for long reach drilling applications for customers. These rig upgrades added to our contract book, our customer list, and rig capabilities. During the quarter, because of recent rig upgrades and the quality of our crews, we drilled the longest well for a large customer in the Marcellus and the second longest well for a large customer in the Haynesville, with both wells approaching 30,000 feet. We also set footage per day records for separate customers in both the Marcellus and the Eagle Ford.

Speaker #4: We also demonstrated the benefits of scale and geographic positioning in the US market , where our strength in gas basins positioned us to capitalize on attractive contracted upgrade opportunities for long reach drilling applications for customers .

Carey Ford: market, where our strength in gas basins positioned us to capitalize on attractive contracted upgrade opportunities for long-reach drilling applications for customers. These rig upgrades added to our contract book, our customer list, and rig capabilities. During the quarter, and because of recent rig upgrades and the quality of our crews, we drilled the longest well for a large customer in the Marcellus and the second longest well for a large customer in the Haynesville, with both wells approaching 30,000 feet. We also set footage per day records for separate customers in both the Marcellus and Eagle Ford. Higher activity and scale in the U.S. are supporting operating margins as well. Those of you who have listened to previous calls have heard me discuss the strategic rationale for committing to our geographic breadth in the U.S.

Speaker #4: These rig upgrades added to our contract book , our customer list and rig capabilities during the quarter , and because of recent rig upgrades and the quality of our crews , we drilled the longest well for a large customer in the Marcellus and the second largest , longest well for a large customer in the Haynesville , with both wells approaching 30,000ft , we also set footage per day records for separate customers in both the Marcellus and Eagle for .

Carey Ford: Higher activity and scale in the US are supporting operating margins as well. Those of you who have listened to previous calls have heard me discuss the strategic rationale for committing to our geographic breadth in the US market, understanding that we experience some margin pressure in the short term to cover higher fixed costs. In the past two quarters, we have capitalized on several opportunities across the US and are minimizing the fixed cost burden as our rig count has moved from the high twenties earlier this year to 40 rigs active today. As we communicated in our guide for Q4, our margins are now stabilizing. My final point on leveraging our scale addresses the performance of our Completion and Production Services segment.

Speaker #4: Higher activity and scale in the US are supporting operating margins as well . Those of you who have listened to previous calls have heard me discuss the strategic rationale for committing to our geographic breadth in the US market , understanding that we experienced some margin pressure in the short term to cover higher fixed costs in the past two quarters , we have capitalized on several opportunities across the US and are minimizing the fixed cost burden as a rig count has moved from the high 20s .

Carey Ford: market, understanding that we experience some margin pressure in the short term to cover higher fixed costs. In the past two quarters, we have capitalized on several opportunities across the U.S. and are minimizing the fixed cost burden as our rig count has moved from the high 20s earlier this year to 40 rigs active today. As we communicated in our guide for the fourth quarter, our margins are now stabilized. My final point on leveraging our scale addresses the performance of our Completion and Production Services segment. The differentiated size and capabilities of our well service fleet, which we have scaled through consolidation over the past three years, combined with our Precision Rentals fleet, delivered a year-over-year revenue growth in a market that generally saw lower drilling and well service activity.

Speaker #4: Earlier this year to 48 rigs active today . As we communicated in our guide for the fourth quarter , our margins are now stabilizing .

Speaker #4: My final point on leveraging our scale addresses the performance of our completion and production services segment . The differentiated size and capabilities of our well service fleet , which we have scaled through consolidation over the past three years .

Carey Ford: The differentiated size and capabilities of our well service fleet, which we have scaled through consolidation over the past 3 years, combined with our Precision Rentals fleet, delivered a year-over-year revenue growth in a market that generally saw lower drilling and well service activity. Second pillar I'll discuss is that technology continues to be a key driver of success, not only with our Alpha and EverGreen platforms, but also with real-time monitoring technology further supporting rig performance. We now have 90% of our active Super Triple rigs running Alpha technology and 93% of all active rigs with at least one EverGreen solution, reducing fuel consumption and emissions for our customers. Our automated robotics rig working for a major in the Montney continues to deliver faster tripping and drilling times for our customer. Interest in the robotics offering is broadening across our customer base.

Speaker #4: Combined with our precision Rentals fleet delivered a year over year revenue growth and a market that generally saw lower drilling and well service activity .

Carey Ford: The second pillar I'll discuss is that technology continues to be a key driver of success, not only with our Alpha™ and Evergreen solutions platforms, but also with real-time monitoring technology further supporting rig performance. We now have 90% of our active super triple rigs running Alpha™ technology and 93% of all active rigs with at least one Evergreen solution, reducing fuel consumption and emissions for our customers. Our automated robotics rig working for a major in the Montney continues to deliver faster tripping and drilling times for our customer, and interest in the robotics offering is broadening across our customer base. Our Clarity platform and digital twin initiatives deliver real-time monitoring of equipment and well performance, resulting in lower downtime, longer equipment lives, faster drilling speeds, and more collaborative and enduring customer relationships.

Speaker #4: Second pillar I'll discuss is that technology continues to be a key driver of success , not only with our alpha and evergreen platforms , but also with real time monitoring technology , further supporting rig performance .

Speaker #4: We now have 90% of our active super triple rigs running alpha technology , and 93% of all active rigs with at least one evergreen solution reducing fuel consumption and emissions for our customers .

Speaker #4: Our automated robotics rig , working for a major in the Montney , continues to deliver faster chipping and drilling times for our customer , and interest in the robotics offering is broader , broadening across our customer base .

Carey Ford: Our Clarity platform and digital twin initiatives deliver real-time monitoring of equipment and well performance, resulting in lower downtime, longer equipment lives, faster drilling speeds, and more collaborative and enduring customer relationships. Technology applications are ubiquitous within Precision's operations and are clearly driving results for all our customers. Finally, I cannot overstate how important customer focus is to our business. The success we have had with the upgrade program in 2025 is a direct result of our customer focus. We work hand-in-hand with our customers to deliver rig equipment and technology packages that we mutually agree will deliver the optimal results. This year, we expect to complete 27 major upgrades. These upgrades are backed by customer contracts or upfront payments. Our strategic initiatives clearly supported our financial performance in Q3 and will continue to drive results for Precision in the future.

Speaker #4: Our clarity platform and digital twin initiatives deliver real time monitoring of equipment and well performance , resulting in lower downtime , longer equipment , lives , faster drilling speeds and more collaborative and enduring customer relationships .

Carey Ford: Technology applications are ubiquitous within Precision Drilling Corporation's operations and are clearly driving results for all our customers. Finally, I cannot overstate how important customer focus is to our business. The success we have had with the upgrade program in 2025 is a direct result of our customer focus. We work hand in hand with our customers to deliver rig equipment and technology packages that we mutually agree will deliver the optimal results. This year, we expect to complete 27 major upgrades, and these upgrades are backed by customer contracts or upfront payments. Our strategic initiatives clearly supported our financial performance in the third quarter and will continue to drive results for Precision in the future.

Speaker #4: Technology applications are ubiquitous within Precision's operations and are clearly driving results for all our customers . Finally , I cannot overstate how important customer focus is to our business .

Speaker #4: The success we have had with the upgrade program in 2025 is a direct result of our customer focus . We work hand in hand with our customers to deliver rig , equipment and technology packages that we mutually agree will deliver the optimal results this year .

Speaker #4: We expect to complete 27 major upgrades , and these upgrades are backed by customer contracts or upfront payments . Our strategic initiatives clearly supported our financial performance in the third quarter and will continue to drive results for precision in the future .

Carey Ford: I'm personally excited about Precision's trajectory as we near the end of 2025 with our demonstrated ability to deliver on our shareholder capital return commitments while gaining market share, completing significant investments across our drilling fleet, building our contract book, and sustaining strong field margin. The future for Precision Drilling is promising. That concludes my prepared remarks, and I will now turn the call back to the operator.

Carey Ford: I'm personally excited about Precision's trajectory as we near the end of 2025, with our demonstrated ability to deliver on our shareholder capital return commitments while gaining market share, completing significant investments across our drilling fleet, building our contract book, and sustaining strong field margin. The future for Precision Drilling is promising. That concludes my prepared remarks, and I will now turn the call back to the operator.

Speaker #4: I am personally excited about Precision's trajectory as we near the end of 2025 with our demonstrated ability to deliver on our shareholder capital return commitments while gaining market share , completing significant investments across our drilling fleet , building our contract book , and sustaining strong field margin .

Speaker #4: The future for precision drilling is promising . That concludes my prepared remarks , and I will now turn the call back to the operator .

Operator: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered or you wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Derek Podhaizer with Piper Sandler. Your line is open.

Dustin Honing: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one-one on your telephone. If your question has been answered, you may remove yourself from the queue, please press star one-one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Derek Podhyser with Fibre Sandal. Your line is open.

Speaker #2: Thank you . Ladies and gentlemen , if you have a question or a comment at this time , please press star one one on your telephone .

Speaker #2: If your question has been answered , you resume with yourself from the queue . Please press star one one again . We will pause for a moment while we compile our Q&A roster .

Speaker #2: Our first question comes from Derek Podhorzer with Piper Sandler . Your line is open .

Derek Podhaizer: Hey, good morning, Carey. Congratulations to you and Kevin Neveu. Great to see you in the seat.

Carey Ford: Hey, good morning, Carey. Congratulations to you and Kevin. Great to see you in the seat.

Speaker #5: Hey , good morning Kerry . Congratulations to you and Kevin . Great to see you in the seat .

Carey Ford: Yeah, thanks, Derek.

[Analyst 1]: Thanks, Derek. Just maybe a question around some of the comments you made for 2026, the limited visibility in the first part of the year. Obviously, you have some contract term, short-term duration contracts. When can we start seeing those extend a little bit here and get some term back into your contracts? I'm just thinking about the interplay of a lot of the customer-funded upgrades that you've talked about and how that can then lead into extending the terms as we move through 2026.

Speaker #4: Yeah . Thank you Derek .

Derek Podhaizer: Just maybe a question around some of the comments you made for 2026, the limited visibility in the first part of the year. Obviously, you have some contract terms, short-term duration contracts, but when can we start seeing those extend a little bit here and get some term back into your contracts? I'm just thinking about the interplay of a lot of the customer-funded upgrades that you've talked about and how that can then lead into extending the terms as we move through 2026.

Speaker #5: So just just maybe a question around some of the comments you made for 2026 . The limited visibility in the first part of the year .

Speaker #5: Obviously you have some contract terms , short term duration contracts . But when can we start seeing those extend a little bit here and get some turn back into your contracts ?

Speaker #5: I'm just thinking about the interplay of a lot of the customer funded upgrades that you've talked about and how that can then lead into extending the terms as we move through 2026 .

Carey Ford: I think if I was gonna go around North America on customer contracts, we are seeing a bit more commitment to longer term contracts in the Montney. I'd say that would be where our longest duration contracts are. We're seeing some longer term contracts in heavy oil, but not quite to the degree that we're seeing in the Montney. In the US, we're certainly seeing longer term contracts in the Marcellus. We have a couple 2-year contracts that we've signed this year. A lot of 1-year contracts, and then some shorter term contracts. I think the contract duration is gonna be the shortest in the oil basins, as there's been a bit more volatility in that commodity.

Carey Ford: I think if I was going to go around North America on customer contracts, we are seeing a bit more commitment to longer-term contracts in the Montney. I'd say that would be where our longest duration contracts are. We're seeing some longer-term contracts in heavy oil, but not quite to the degree that we're seeing in the Montney. In the U.S., we're certainly seeing longer-term contracts in the Marcellus. We have a couple of two-year contracts that we've signed this year, a lot of one-year contracts, and then some shorter-term contracts. I think the contract duration is going to be the shortest in the oil basins as there's been a bit more volatility in that commodity. In the Haynesville, we're seeing some short-term and some slightly longer-term, maybe one-year to 18-month contracts.

Speaker #4: I think if I was going to go around North America on customer contracts , we are seeing a bit more commitment to longer term contracts in the montney .

Speaker #4: I said that that would be where our longest duration contracts are . We're seeing some some longer term contracts in heavy oil , but not quite to the degree that we're seeing in the montney in the US .

Speaker #4: We're certainly seeing longer term contracts in the Marcellus . We have a couple two year contracts that we've signed this year , a lot of one year contracts and then some shorter term contracts .

Speaker #4: I think the contract duration is going to be the shortest in the oil basins , as there's been a bit more volatility in that commodity and in the in the Haynesville , we're seeing some short term and some slightly longer term , maybe one year , one year to 18 month contracts .

Carey Ford: In the Haynesville, we're seeing some short term and some slightly longer term, maybe 1 year, 1 year to 18-month contracts.

[Analyst 1]: Okay. Got it.

Derek Podhaizer: Okay. Got it.

Speaker #5: Okay . Got it .

Carey Ford: I think, uh-

Carey Ford: I think.

Derek Podhaizer: That makes a lot of sense.

[Analyst 1]: That makes a lot of sense.

Speaker #4: I think that makes a lot of sense . Yeah . And I'll just add I think Dustin made a comment here about some of the conversations we're having with customers .

Carey Ford: Yeah. I'll just add, I think it's Dustin Honing made a comment here about some of the conversations we're having with customers. I think we have one contract in our book that starts, that we've booked that starts in 2026. We are having a number of constructive conversations with customers for both oil and gas targets in the US for work starting in 2026. It's kind of yet to be seen how long those contract commitments are gonna be.

Carey Ford: I think it's Dustin who made a comment here about some of the conversations we're having with customers. We don't have, I think we have one contract in our book that we booked that starts in 2026, but we are having a number of constructive conversations with customers for both oil and gas targets in the U.S. for work starting in 2026. It's kind of yet to be seen how long those contract commitments are going to be.

Speaker #4: We don't have . I think we have one contract in our book that starts that we booked . It starts in 2026 , but we are having a number of constructive conversations with customers for both oil and gas targets in the US for work starting in 2026 .

Speaker #4: But it's kind of yet to be seen how long those contract are going to be .

[Analyst 1]: Okay. That's helpful color. Just on the rig upgrades, obviously, you've done a lot here in 2025. I think the number is almost 30. We start thinking about 2026, and as you start thinking about your budget around for CapEx and what that means for free cash flow, how much more rig upgrades do you expect to do? I guess, what's the population that you have of your rigs going that are available to be upgraded? Just want to start contextually thinking about what rig upgrades could look like for next year and what it means for CapEx.

Derek Podhaizer: Okay. That's helpful color. Then just on the rig upgrades, obviously you've done a lot here in 2025, and I think the number's almost 30. We start thinking about 2026, and as you start thinking about your budget around for CapEx and what that means for free cash flow, how much more rig upgrades do you expect to do? I guess, what's the population that you have of your rigs that are available to be upgraded? Just wanna start contextually thinking about what rig upgrades can look like for next year and what it means for CapEx.

Speaker #5: Okay , that's helpful . Color . And then just on the rig upgrades , obviously you've done a lot here in 2025 . I think the number is almost 30 .

Speaker #5: We start thinking about 2026 . And as you start thinking about your budget around for CapEx and what that means for free cash flow , how much more rig upgrades do you expect to do ?

Speaker #5: I guess what's the population that you have of your rigs going that are available to be upgraded ? I just want to start contextually thinking about what rig upgrades can look like for next year , what it means for CapEx .

Carey Ford: I think we would just start with the capital commitments that we made to investors on debt pay down and share repurchases. We will start with commitments, maybe similar levels next year. Hopefully, we raise the commitment to deliver returns directly to shareholders. We'll start with that. We'll have our regular maintenance, which has been trending kind of in the CAD 150 million a year range at this activity level. Beyond that, frankly, I hope we have a lot of upgrades. This is an excellent opportunity to generate a significant financial return for our customers. It's certainly the highest return opportunity we have out of all of our options.

Carey Ford: Yeah. I think we, I would just start with the capital commitments that we made to investors on debt pay down and share repurchases. We will start with commitments, maybe similar levels next year. Hopefully, we raise the commitment to deliver returns directly to shareholders. We'll start with that, and then we'll have our regular maintenance, which has been trending kind of in the $150 million a year range at this activity level. Beyond that, frankly, I hope we have a lot of upgrades. This is an excellent opportunity to generate a significant financial return for our customers. It's certainly the highest return opportunity we have out of all of our options. We have an embedded advantage on completing the upgrades with, you know, a 40-acre tech center in Niskiyu and a 20-acre tech center in Houston that are fully staffed with experts on completing these upgrades.

Speaker #4: Yeah , I think we I would just start with the the capital commitments that we made to investors on debt . Paydown and share repurchases .

Speaker #4: We will we will start with commitments maybe maybe similar levels next year . Hopefully we raise the the commitment to deliver returns directly to shareholders .

Speaker #4: So we'll start with that . And then we'll have our regular maintenance , which has been trending kind of in the $150 million a year range at this activity level .

Speaker #4: And then beyond that , I'm frankly , I hope we have a lot of upgrades . This is an excellent opportunity to generate a significant financial return for our customers .

Speaker #4: It's certainly the highest return opportunity we have out of all of our options . We have a an embedded advantage on completing the upgrades with a 40 acre tech center and a 20 acre tech center in in Houston .

Carey Ford: We have an embedded advantage on completing the upgrades with, you know, a 40-acre tech center in Nisku and a 20-acre tech center in Houston that are fully staffed with experts on completing these upgrades. We have a cost advantage. It usually comes with, or let's say almost always comes with a contract that locks in the return. I hope we have more. As we continue to see longer reach horizontals in the US, that will drive demand from our customers for upgrades. We expect to see more pad configuration upgrades in the heavy oil in Canada. You know, I think it'll be much more than 0.

Speaker #4: That are fully staffed with experts on completing these upgrades . We have a cost advantage and then also it usually comes with , I'll say , almost always comes with a contract that that locks in the return .

Carey Ford: We have a cost advantage. It usually comes with, or I would say almost always comes with, a contract that locks in the return. I hope we have more. I think as we continue to see longer reach horizontals in the U.S., that will drive demand from our customers for upgrades. We expect to see more pad configuration upgrades in the heavy oil in Canada. I think it'll be more, it'll be much more than zero. I don't know if we'll hit the same level that we do this year, but I don't think that these upgrade requests are going to stop.

Speaker #4: So I hope we have more . I think as we continue to see longer reach horizontals in the US that will drive demand from our customers for upgrades , we expect to see more pad pad configuration upgrades and the heavy oil in Canada and you know , I think it'll be more it'll be much more than zero .

Carey Ford: I don't know if we'll hit the same level that we do this year, but I don't think that these upgrade requests are gonna stop.

Speaker #4: I don't know if we'll hit the same level that we do this year , but I don't think that these upgrade requests are are going to stop .

[Analyst 1]: Okay. Great. Thanks, Carey. Congrats again. I'll turn it back.

Derek Podhaizer: Okay, great. Thanks, Carey. Congrats again. I'll turn it back.

Speaker #5: Okay , great . Thanks , Gary . Congrats again . I'll turn it back .

Carey Ford: Yeah, thank you, Derek.

Carey Ford: Yeah. Thank you, Derek.

Speaker #4: Yeah . Thank you Derek .

Dustin Honing: Our next question comes from Keith MacKey with RBC Capital Markets. Your line is open.

Operator: Our next question comes from Keith MacKey with RBC Capital Markets. Your line is open.

Speaker #2: Our next question comes from Keith Mackey with RBC Capital Markets . Your line is open .

Keith MacKey: Hi. Thanks for taking my question, and certainly echo Derek's comments on congrats to you, Carey, Dustin, and Gene. I think maybe, Carey, if we could just kinda start out with, and you did discuss it in your prepared remarks, but, you know, I'm not at this point expecting wholesale strategy change from Precision, but certainly some, you know, tweaks from how you might see the business to how Kevin might have seen it. Can you just talk about some of those factors and sort of how your priorities will stand going forward as you take on the CEO role?

Keith MacKey: Hi. Thanks for taking my question and certainly echo Derek's comments on congrats to you, Carey, Dustin, and Jean. I think maybe, Carey, if we could just kind of start out with, and you did discuss it in your prepared remarks, but you know, I'm not at this point expecting wholesale strategy change from Precision, but certainly some tweaks from how you might see the business to how Kevin might have seen it. Can you just talk about some of those factors and sort of how your priorities will stand going forward as you take on the CEO role?

Speaker #6: Hi . Thanks for taking my question . And certainly echo Derek's comments on congrats to you , Cory , Dustin and Gene . I think maybe Cory , if we could just kind of start out with and you did discuss it in your prepared remarks , but you know , I'm not at this point expecting wholesale strategy change from precision , but certainly some some tweaks from how you might how you might see the business to how Kevin might have seen it .

Speaker #6: Can you just talk about some of those factors and , and sort of how your priorities will stand going forward as , as you take on the CEO role ?

Carey Ford: Yeah, sure. I think that's a fair question, Keith. Certainly early days, but I have been with the company for 15 years. I would say that the strategy that we've been working with over my tenure as CFO, so the past 10 years, I was heavily involved in developing it, particularly around cost control, capital allocation, returns to shareholders, and kind of hand in hand on how we look at operating the business and dealing with customers. Where I think the initial focus will be on supporting field operations the best we can and proving to our field that we're delivering the best support we can. Also with customers, doing a more thorough job of proving to customers that we are delivering the best performance in the industry.

Carey Ford: Yeah, sure. I think that's a fair question, Keith. Certainly early days, but I have been with the company for 15 years. I would say that the strategy that we've been working with over my tenure as CFO, so the past 10 years, I was heavily involved in developing it, particularly around cost control, capital allocation, returns to shareholders, and, you know, kind of hand-in-hand on how we look at operating the business and dealing with customers. Where I think the initial focus will be on supporting field operations the best we can, proving to our field that we're delivering the best support we can. Then also with customers, doing, I would say, a more thorough job of proving to customers that we are delivering the best performance in the industry.

Speaker #4: Yeah , sure . I think that's a fair question , Keith . And certainly early days , but but I have been with the company for 15 years .

Speaker #4: I would say that the strategy that we've been working with over my tenure as CFO for the past ten years , I was heavily involved in developing it , particularly around cost control , capital allocation , returns to shareholders , and , you know , kind of hand in hand on how we look at operating the business and dealing with customers .

Speaker #4: Where where I think the initial focus will be on supporting field operations . The best we can and proving to our field that we're delivering the best support we can .

Speaker #4: And then also, with customers doing, I would say, a more thorough job of proving to customers that we are delivering the best performance in the industry. We've got lots of new tools to do that.

Carey Ford: We've got lots of new tools to do that and a commitment by our sales and operations and technology teams to follow through on that. Beyond that, I would just say that there's a lot of things that are working for Precision Drilling Corporation right now. I'm not looking to change the things that are working. You look at kind of the laundry list that I closed my comments with about our contract book and market share, and I think we had a revenue decline of 3% year over year this quarter, which I think you would be hard-pressed to find a service provider with a similar geographic footprint to us that had a similar resiliency in revenue. There are a lot of things that are working, but I think there's a few areas where we can sharpen our focus.

Carey Ford: We've got lots of new tools to do that and a commitment by our sales and operations and technology teams to follow through on that. Beyond that, I would just say that there's a lot of things that are working for Precision right now, so, I'm not looking to change the things that are working. You look at kind of the laundry list that I closed my comments with about our contract book and market share and, you know, I think we had revenue decline of 3% year-over-year this quarter, which I think you would be hard-pressed to find a service provider with a similar geographic footprint to us that had a similar resiliency and revenue.

Speaker #4: And a commitment by our sales and operations and technology teams to to follow through on that . And beyond that , I would just say that there's a lot of things that are working for precision right now .

Speaker #4: So I'm not I'm not looking to change the things that are working . You look at kind of the the laundry list that I close my comments with about our contract book and market share .

Speaker #4: And , you know , I think we had a revenue decline of 3% year over year this quarter , which I think you would be hard pressed to find a service provider with a similar geographic footprint to us that had a similar resiliency and revenue .

Carey Ford: There are a lot of things that are working, but I think there's a few areas where we can sharpen our focus.

Speaker #4: So so there are a lot of things that are working , but I think there's a few areas where we can we can sharpen our focus .

Keith MacKey: Okay. Appreciate the comments. Just one on the margin per day guidance, specifically speaking to any mobilization or activation costs. Looks like in the U.S., you had about $502 a day of impact in Q3. Can you just talk about what that might look like in Canada and the U.S. for Q4, please?

Keith MacKey: Okay. Appreciate the comments. Just one on the margin per day guidance, specifically speaking to any mobilization or activation costs. Looks like in the US you had about $502 a day of impact in Q3. Can you just talk about what that might look like in Canada and the US for Q4, please?

Speaker #6: Okay . Appreciate the comments . And just one on the margin per day guidance . Specifically speaking to any mobilization or activation costs , looks like the in the US you had about $502 a day of impact in Q3 .

Speaker #6: Can you just talk about what that might look like in Canada and the US for Q4 ? Please ?

Dustin Honing: Keith, this is Dustin here. In Canada, we'll have a little bit tied to the rigs we've mobilized out, but I wouldn't view it as substantial, as one of those rigs has already been delivered. Then when you look at in the US, we've kind of seen a little bit of a constant run rate with some of the reactivation following the momentum of staging all of these incremental rigs from Q1 into Q3. I think that's a reasonable run rate you can expect, kind of with the contract turn that we've been absorbing so far in the short term.

Carey Ford: Keith, this is Dustin here. In Canada, we'll have a little bit tied to the rigs we've mobilized out, but I wouldn't view it as substantial as one of those rigs has already been delivered. When you look in the U.S., we've kind of seen a little bit of a constant run rate with some of the reactivation following the momentum of staging all of these incremental rigs from Q1 into Q3. I think that's a reasonable run rate you can expect with the contract term that we've been absorbing so far in the short term.

Speaker #4: So , Keith , this is Dustin here in Canada . We'll have a little bit tied to the rigs . We've mobilized up , but I wouldn't view it as substantial as one of those rigs has already been delivered .

Speaker #4: And then when you look at in the US , we've kind of seen a little bit of a constant run rate with some of the reactivation following the momentum of staging all of these incremental rigs from Q1 into Q3 .

Speaker #4: So I think that's a reasonable run rate . You can expect kind of with the contract term that we've been absorbing so far in the short term .

Keith MacKey: Okay, that's it for me. Thanks a lot.

Keith MacKey: Okay. That's it for me. Thanks a lot.

Speaker #6: Okay , that's it for me . Thanks a lot .

Carey Ford: Yeah. Thank you, Keith.

Carey Ford: Yeah, thank you, Keith.

Speaker #4: Steve .

Dustin Honing: Our next question comes from Aaron MacNeil with TD Cowen. Your line is open.

Operator: Our next question comes from Aaron MacNeil with TD Cowen. Your line is open.

Speaker #2: Our next question comes from Aaron McNeil with TD Cowen. Your line is open.

Aaron MacNeil: Hey, morning all, and congrats to everyone. I would certainly echo that and looking forward to seeing where you guys take things. Maybe I'll build on Keith's question, Carey. I was just hoping you could comment on a few specific items like performance-based contracts, your comfort with the operating regions or business lines, and your approach to M&A, and if those sort of factors differ from your predecessor.

Aaron MacNeil: Hey, morning all. Congrats to everyone. Would certainly echo that and looking forward to seeing where you guys take things. Maybe I will build on Keith’s question, Carey. I am just hoping you could comment on a few specific items like performance-based contracts, your comfort with the operating regions or business lines, and your approach to M&A, and if those sort of factors differ from your predecessor.

Speaker #5: Hey morning all and congrats to everyone , which certainly .

Speaker #7: Echo that and looking forward to seeing where you guys take things . Maybe I'll build on Keith's question . Carrie , I'm just hoping you could comment on a few specific items like performance based contracts , your comfort with the operating regions or business lines , and your approach to M&A .

Speaker #7: And if those sorts of factors differ from your predecessor.

Carey Ford: Okay. I would say with regards to M&A, no change. I mean, I was, let's say, involved in every kind of M&A discussion we've had, probably over the last 15 years. I think, you know, there's nothing strategic that we see on the M&A front. I think there's some transactions we could complete if the price was right, but there's not a transaction out there that we would view as strategic that we would need to pay up for. No change on that. I think the other thing I would say on M&A would be we're proving this year in particular, that there are ways to grow our business organically without M&A, and we're doing that through high utilization of assets, improved pricing, rig upgrades, technology add-ons, and EverGreen add-ons.

Carey Ford: Okay. I would say with regards to M&A, no change. I was involved in every kind of M&A discussion we've had probably over the last 15 years. I think there's nothing strategic that we see on the M&A front. I think there are some transactions we could complete if the price was right, but there's not a transaction out there that we would view as strategic that we would need to pay up for. No change on that. The other thing I would say on M&A would be we're proving in this year in particular that there are ways to grow our business organically without M&A, and we're doing that through high utilization of assets, improved pricing, rig upgrades, technology add-ons, Evergreen add-ons. I think there's a bit more runway on that growth avenue.

Speaker #4: Okay . So I would say with with regards to M&A , no change . I was involved in every of M&A discussion we've had probably over the last 15 years .

Speaker #4: And I think there's nothing strategic that we see on the M&A front. I think there are some transactions we could complete if the price was right, but there's not a transaction out there that we would pursue.

Speaker #4: We would use as strategic that we would need to pay up for . So , so no change on that . I think the other thing I would say on M&A would be we're proving in this year in particular that there are ways to grow our business organically without M&A .

Speaker #4: And we're doing that through high utilization of assets , improved pricing , rig upgrades , technology add ons , evergreen add ons , and so I think there's a bit more runway on on that growth avenue .

Carey Ford: I think there's a bit more runway on that growth avenue. With regard to performance-based contracts, I think I might have a slightly different view on that, but it's not much different. I think there are good opportunities for performance-based contracts. The industry has certainly it's more prevalent in the industry than it would've been two or three years ago, and we're seeing, I would say, more unique applications to insert performance clauses into our contracts in both the Canadian market and the US market. We're not opposed to them. We have several performance-based contracts, and they're working well on delivering financial returns as well as driving performance for our rigs.

Carey Ford: With regard to performance-based contracts, I might have a slightly different view on that, but it's not much different. I think there are good opportunities for performance-based contracts. The industry is certainly more prevalent in the industry than it would have been two or three years ago. We're seeing more unique applications to insert performance clauses into our contracts in both the Canadian market and the U.S. market. We're not opposed to them. We have several performance-based contracts, and they're working well on delivering financial returns as well as driving performance for our rigs. I don't think you're going to see a step change in how we look at performance-based contracts, but I would be surprised if we didn't see more of them in the future.

Speaker #4: With regard to performance-based contracts, I think I might have a slightly different view on that, but it's not much different.

Speaker #4: I think there are good opportunities for performance based contracts . The the industry has certainly it's it's more prevalent in the industry than it would have been 2 or 3 years ago .

Speaker #4: And we're seeing , I would say , more unique applications to insert performance clauses into our contracts in both the Canadian market and the US market .

Speaker #4: And so we're not we're not opposed to them . We we have several performance based contracts . And and they're working well on delivering financial returns as well as driving performance for our rigs .

Carey Ford: I think that, you know, I don't think you're gonna see a step change in how we look at performance-based contracts, but I would be surprised if we didn't see more of them in the future.

Speaker #4: So I think that , you know , I don't think you're going to see a step change in how we look at performance based contracts .

Speaker #4: But I would be surprised if we didn't see more of them in the future .

Aaron MacNeil: Okay. Sorry, the last piece of the first question was just, you know, presumably, you're comfortable with the operating regions and business lines you're currently in?

Aaron MacNeil: Okay. Just, sorry, the last piece of the first question was just, you know, presumably you're comfortable with the operating regions and business lines you're currently in?

Speaker #7: Okay . And then just sorry , the last piece of the first question was just , you know , presumably you're comfortable with the operating regions and business lines .

Speaker #7: You're currently in .

Carey Ford: Correct. I think we're not looking to add any service lines onto our current business lines. When we look at expanding internationally, we've said it before, and I agree with it today, that, you know, the markets that we're in, Kuwait and Saudi Arabia, are very good markets in the Middle East. It has been difficult to grow outside of those markets because the return profile of deploying new capital has been unattractive. If we can make that change or find opportunities where that does change, we could grow in that region in the Middle East. Maybe there's another region or two that we grow in the future, but nothing to report or telegraph at this point.

Carey Ford: Correct. I think we're not looking to add any service lines onto our current business lines. When we look at expanding internationally, we've said it before, and I agree with it today, that the markets that we're in, Kuwait and Saudi Arabia, are very good markets in the Middle East. It has been difficult to grow outside of those markets because the return profile of deploying new capital has been unattractive. If we can make that change or find opportunities where that does change, we could grow in that region in the Middle East. Maybe there's another region or two that we grow in the future, but nothing to report or telegraph at this point.

Speaker #4: Correct . I think for we're not looking to add any service lines on onto our current business lines . And when we look at expanding internationally , we've said it before , and I agree with it today that , you know , the markets that we're in , Kuwait and Saudi Arabia are very good markets in the Middle East .

Speaker #4: It has been difficult to grow outside of those markets because the return profile of deploying new capital is has been unattractive . And if we can make that change or find opportunities where that does change , we could grow in that region in the Middle East .

Speaker #4: And maybe there's another region or two that we grow in the future . But nothing to report or telegraph at this point .

Aaron MacNeil: Okay. For the follow-up, I'm sure you guys gave this a lot of thought before moving additional rigs to Canada, but how did you sort of wrap your head around, you know, the downside mitigation in terms of adding supply to the market that's generally been pretty good for the last couple of years? You also mentioned a unique customer contract structure in the prepared remarks. Can you elaborate on what you mean by that?

Aaron MacNeil: Okay. As for the follow-up, I'm sure you guys gave this a lot of thought before moving additional rigs to Canada, how did you sort of wrap your head around, you know, the downside mitigation in terms of adding supply to the market that's generally been pretty good for the last couple years? You also mentioned a unique customer contract structure in the prepared remarks. Can you elaborate on what you mean by that?

Speaker #7: Okay . And then for the follow up , I'm sure you guys gave this a lot of thought before moving additional rigs to Canada , but how did you sort of wrap your head around , you know , the downside mitigation in terms of adding supply to the market ?

Speaker #7: That's generally been pretty good for the last couple of years . And you also mentioned a unique customer contract structure in the prepared remarks .

Speaker #7: Can you elaborate on what you mean by that ?

Carey Ford: Yeah, I mean that, this was a 5-rig contract for a major customer in Canada where we moved 2 rigs from the US market to Canada, but also were able to get long-term contracts on 3 other rigs in the Canadian market. We were able to look at the contract package and the capital committed for that contract package and the contract term and the return that the contract delivered for all those rigs. Together as a package, it was a very attractive opportunity for us, and we were uniquely positioned to be able to capture it. I think it was just a unique situation that allowed us to move 2 rigs to the Canadian market.

Carey Ford: Yeah. I mean, this was a five-rig contract for a major customer in Canada where we moved two rigs from the U.S. market to Canada, but also were able to get long-term contracts on three other rigs in the Canadian market. We were able to look at the contract package and the capital committed for that contract package and the contract term and the return that the contract delivered for all those rigs. Together as a package, it was a very attractive opportunity for us, and we were uniquely positioned to be able to capture it. I think it was just a unique situation that allowed us to move two rigs to the Canadian market.

Speaker #4: Yeah , I mean that this was a five rig contract for a major customer in Canada where we moved two rigs from the US market to Canada , but also were able to get long term contracts on three other rigs in the Canadian market .

Speaker #4: It was so we were able to look at the contract package and the capital committed for that contract package and the contract term and the return that the contract delivered for all those rigs and together as a package , it was a very attractive opportunity for us .

Speaker #4: And we were uniquely positioned to be able to capture it. So I think it was just a unique situation that allowed us to move two rigs to the Canadian market.

Carey Ford: Your question about supplying more rigs to the market, I just wanna be clear on the comments that we delivered both in our press release and I believe Dustin delivered on his press release. We expect to be at 100% utilization on Super Triples this winter drilling season. We are addressing higher demand for Precision Drilling Super Triples. I don't know what that means for the rest of the market triples in Canada, but certainly for our rig class, we expect to be at 100% utilization.

Carey Ford: Now, your question about supplying more rigs to the market, and I just want to be clear on the comments that we delivered both in our press release and I believe Dustin delivered on his press release. We expect to be at 100% utilization on super triples this winter drilling season. We are addressing higher demand for Precision Drilling super triples. I don't know what that means for the rest of the market of triples in Canada, but certainly for our rig class, we expect to be at 100% utilization.

Speaker #4: Now , your question about supplying more rigs to the market , and I just want to be clear on the comments that we delivered both in our press release and I believe Dustin delivered on his on his press release .

Speaker #4: We we expect to be at 100% utilization on Super triples this winter . Drilling season . So we are we are addressing higher demand for precision drilling .

Speaker #4: Super triples . And I don't know what that means for the rest of the market . Triples in Canada . But but certainly for our rig class , we expect to be at 100% utilization .

Aaron MacNeil: Okay. Makes total sense. Thanks, everyone, and congrats again.

Aaron MacNeil: Okay. Makes total sense. Thanks everyone, and congrats again.

Speaker #7: Okay, makes total sense. Thanks, everyone, and congrats again.

Carey Ford: Thank you, Aaron. Thanks, Aaron.

Carey Ford: Yeah. Thank you.

Speaker #4: Yeah . Thank you . Thanks , Aaron .

Dustin Honing: Thanks.

Dustin Honing: Our next question comes from John Daniel with Daniel Energy Partners. Your line is open.

Operator: Our next question comes from John Daniel with Daniel Energy Partners. Your line is open.

Speaker #2: Our next question comes from John Daniel with Daniel Energy Partners . Your line is open .

Carey Ford: Hey, guys. Thanks for having me. I guess, Carey, congrats. Everyone, congrats, by the way. This question's for Jean. I know it's too early to say how many rig upgrades you're going to do next year, but I'm curious if you could just speak to the demand for more upgrades next year.

John Daniel: Hey, guys. Thanks for having me. I guess, Carey, well, congrats. Everyone congrats, by the way. This question's for Gene. I know it's too early to say how many rig upgrades you're gonna do next year, but I'm curious if you could just speak to the demand for more upgrades next year.

Speaker #8: Hey guys . Thanks for having me . I guess Kerry will . Congrats everyone . Congrats . By the way , this question is for Jean .

Speaker #8: I know it's too early to say how many rig upgrades you're going to do next year , but I'm curious if you could just speak to the demand for more upgrades next year .

Jean Stahl: Yeah. Hey, John. Thanks. Working closely with all of our customers here in the U.S. and trying to understand what they need for rig requirements, what their drilling programs look like, we've got three classes of super triples: our regular 1500, our 1500 EDR, and our ST2000. Depending on what their drilling program looks like, if they've got a steady program and we've got a rig that we can upgrade for them at a reasonable price and we can come to contract terms, we'll go ahead and see if we can move forward with the upgrade.

Gene Stahl: Hey, John. Thanks. Working closely with all of our customers here in the US, trying to understand what they need for rig requirements, what their drilling programs look like. We've got 3 classes of Super Triples: our regular 1500, our 1500 EDR, and our ST-2000. Depending on what their drilling program looks like, they've got a steady program, we've got a rig that we can upgrade for them at a reasonable price, and we can come to contract terms, then we'll go ahead and see if we can move forward with the upgrade.

Speaker #4: Yeah . Hey , John , thanks . So working closely with all of our customers here in the US and trying to understand what they need for rig requirements , what they're drilling programs look like , and then we've got three classes of super triples .

Speaker #4: So our regular 1500 , our 1500 and our 2000 . And so depending on what they're drilling program looks like they've got a steady program .

Speaker #4: And we've got a rig that we can upgrade for them at a reasonable price.

Speaker #9: And we can come to contract terms . Then we'll go ahead and see if we can't move forward with the upgrade .

John Daniel: Okay. When I look at the 5 rigs that you're doing for Canada, like can you just speak to like how that evolved, the opportunity, how long were the discussions, like could you be surprised next year all of a sudden that you have, you know, 5 to 10 more upgrades? I'm just trying to get a feel for what the opportunity could be.

Carey Ford: Okay. When I look at the five rigs that you're doing for Canada, can you just speak to how that evolved, the opportunity, how long were the discussions, and could you be surprised next year all of a sudden that you're going to have, you know, 5 to 10 more upgrades? I'm just trying to get a feel for what the opportunity could be.

Speaker #8: Okay . But like the when I look at the rigs that you're doing for Canada , like can you just speak to like how that , that evolved the , the opportunity , how long were the discussions and could you be surprised next year all of a sudden that you have , you know , 5 to 10 more upgrades .

Speaker #8: So just I'm just trying to get a feel for what the opportunity could be .

Jean Stahl: Yeah, it's a blend of heavy oil rigs and a blend of triples. Obviously, Carey just spoke to the triples.

Gene Stahl: Yeah. It's a blend of heavy oil rigs and a blend of triples. Obviously, Carey just spoke to the triples viewpoint. Heavy oil with Super Single rigs, we have 48 of them. You know, as the clear water starts to evolve and they expand their well design, they're looking for.

Speaker #9: Yeah . So it's a blend of heavy oil rigs and a blend of triples . Obviously Carrie just spoke to the triples viewpoint and Vol super rigs .

Carey Ford: Yeah.

Jean Stahl: Heavy oil and super single rigs. We have 48 of them. You know, as the Clearwater starts to evolve and they expand their well design, they're looking for year-round operations. Typically, that can mean 100 more days of utilization for us as a drilling contractor. Converting those single mode rigs to pad rigs is something that's of interest to our customers and to ourselves, and that's where the growth would come from.

Speaker #9: We have 48 of them . You know , as the Clearwater starts to evolve and they expand their well designed . They're looking for year round operations .

Gene Stahl: Yeah

Gene Stahl: year-round operations. Typically, that can mean 100 more days of utilization for us as a drilling contractor. Converting those single mode rigs to pad rigs is something that's of interest to our customers and to ourselves and that's where the growth would come from.

Speaker #9: Typically that can mean 100 more days of utilization for us as a drilling contractor . And so converting those single mode rigs to pad rigs is something that's of interest to our customers and to ourselves .

Speaker #9: And and that's where the growth would come from .

John Daniel: Got it. All right. Apologies for what's gonna be a drilling 101 question here, but you did the 27 rig upgrades this year, or you'll do them. Like, can you remind me what a potential rig upgrade cycle could be? Like, when would you have to bring those 27 back in?

Carey Ford: Got it. All right. Apologies for what's going to be a drilling 101 question here, but you did the 27 rig upgrades this year, or you'll do them. Can you remind me what a potential rig upgrade cycle could be? When would you have to bring those 27 back in?

Speaker #8: Got it . All . Right . Apologies for what's going to be a drilling 101 question here . But you did the 27 rig upgrades this year or you'll do them like can you remind me what the what a rig upgrade upgrade cycle could be like ?

Speaker #8: When would you have to bring those 27 back in ?

Jean Stahl: Oh, you mean the time it takes to complete an upgrade?

Gene Stahl: Oh, you mean the time it takes to complete an upgrade?

Speaker #4: Oh , you mean the time it takes to complete an upgrade ?

John Daniel: Yeah, just Yeah. I'm sorry for such a basic question. I'm slow today.

Carey Ford: Yeah, I'm sorry for such a basic question, but I'm slow today. You know, it's.

Speaker #8: Yeah , just . Yeah . I'm sorry for such a basic question , but I'm slow today .

Gene Stahl: You know, it's for what we're doing, some of the rig upgrades might be an in-basin upgrade where in a rig move we're installing a new piece of equipment, you know, a wrench or a high torque top drive. A longer term upgrade might be doing a pack configuration for a Super Single, that would be three to four months.

Speaker #4: You know , it's for what we're for what we're doing . Some of the rig upgrades might be in in-basin . Upgrade ? Where ?

Jean Stahl: For what we're doing, some of the rig upgrades might be an in-base and upgrade where in a rig move where we're installing a new piece of equipment, you know, a wrench or a high torque top drive. A longer-term upgrade might be doing a pad configuration for a super single. That would be three to four months. The rigs that we moved up, the super triples, those were both, those were probably two to three-month upgrades to get those rigs ready. We're not looking at any kind of six to nine-month upgrades. Most of them are going to be, you know, pretty quick, inside a week to three or four months.

Speaker #4: In a rig move . We're we're installing a new piece of equipment . You know , ranch or a high top drive . A longer term upgrade might be doing a pad configuration for a super single .

Speaker #4: That would be 3 to 4 months . The rigs that we moved up , the super triples , those were those were probably 2 to 3 month upgrades to get those rigs ready .

John Daniel: Yep.

Gene Stahl: The rigs that we moved up, the Super Triples, those were probably 2 to 3-month upgrades to get those rigs ready. We're not looking at any kind of 6 to 9-month upgrades. Most of them are going to be, you know, pretty quick, inside a week to 3 or 4 months.

Speaker #4: So we're not looking at any kind of nine , 6 to 9 month upgrades . Most of them are going to be pretty quick inside a week to 3 or 4 months .

Carey Ford: Yeah, it speaks to our rig design and our capability to use our inventories and upgrade to our specs. I think a differentiator for Precision, certainly. All right, fair enough. Thanks for indulging these questions.

Dustin Honing: Yeah. It, again, it speaks to our rig design and our capability to use our inventory to upgrade to our specs. I think a differentiator for Precision certainly.

Speaker #9: And it speaks to our rig design and our capability to use our inventories and and upgrade to our specs . So I think a differentiator for precision certainly .

John Daniel: All right. Fair enough. Thanks for indulging these questions.

Speaker #9: .

Speaker #8: All right . Fair enough . Thanks for indulging these questions .

Carey Ford: No problem, John.

Jean Stahl: No problem, John.

Speaker #4: No problem . John .

Carey Ford: Good luck, guys.

John Daniel: Good luck, guys.

Speaker #8: Good luck guys .

Dustin Honing: Our next question comes from Tim Monticello with ATB Capital Markets. Your line is open.

Operator: Our next question comes from Tim Monachello with ATB Capital Markets. Your line is open.

Speaker #2: Our next question comes from Tim Monticello with ATB Capital Markets . Your line is open .

Tim Monticello: Hey, everybody. Longtime listener, first-time caller in a while.

Tim Monachello: Hey, everybody. long time listener, first time caller in a while.

Speaker #8: Hey .

Speaker #10: Everybody . Long time listener , first time caller in a while . Congrats to yeah , congrats , Kerry , Dustin and Gene for as much as your promotions and and Kevin for a great career .

Carey Ford: Hey, Tim.

Tim Monachello: Congrats to, yeah, congrats Carey, Dustin, and Gene for much deserved promotions and Kevin for a great career. First question just around Canada. Interesting to see a couple rigs being moved out of the US into Canada, Super Triple market. With your comment that you're fully utilized for, or expecting to be fully utilized for the winter drilling season, do you think there's more opportunity to move rigs out of the US into Canada?

Carey Ford: Yes, sir.

Tim Monticello: Congrats to, yeah, congrats, Carey, Dustin, and Jean for much-deserved promotions and Kevin for a great career. First question just around Canada. Interesting to see a couple of rigs being moved out of the U.S. into Canada, the super triple market. With your comment that you're fully utilized for or expecting to be fully utilized for the winter drilling season, do you think there's more opportunity to move rigs out of the U.S. into Canada?

Speaker #10: First question just around Canada . Interesting to see a couple rigs being moved out of the US into Canada . Super triple market .

Speaker #10: And with your comment that you're fully utilized for or expecting to be fully utilized for the winter drilling season , do you think there's more opportunity to move rigs out of the US into Canada ?

Carey Ford: I think for this winter drilling season, no. We don't currently have, you know, deep discussions with customers about moving more rigs. Over time, over the next couple years, I mean, LNG Canada phase 2, other LNG opportunities, there could be more demand for Super Triple rigs and certainly the rigs that we have in Canada are delivering good performance for our customers. There may be opportunities in the future, but I would say it would be for next winter drilling season.

Carey Ford: I think for this winter drilling season, no. We don't currently have deep discussions with customers about moving more rigs. Over time, over the next couple of years, LNG Canada phase two and other LNG opportunities could create more demand for super triple rigs. The rigs that we have in Canada are delivering good performance for our customers. There may be opportunities in the future, but I would say it would be for next winter drilling season.

Speaker #4: I think for this winter drilling season , no . And we don't currently have , you know , deep discussions with customers about moving more rigs .

Speaker #4: But over time , over the next couple of years , I mean , LNG Canada phase two other LNG , LNG opportunities , there could be more demand for for super triple rigs .

Speaker #4: And certainly the rigs that we have in Canada are delivering good performance for our customers . So there may be opportunities in the future .

Speaker #4: But I would say it would be for next winter drilling season .

Tim Monticello: Okay. That makes sense. For the U.S., obviously, the oil basins, the outlook is a little bit surface. Goes

Tim Monachello: Okay. That makes sense. Then for the US, obviously the oil basins, the outlook is a little bit circumspect as, I would think. In the gas basins, it's, you know, you're seeing almost 20% rig activity growth in gas in the US year to date, and you have a unique footprint in the gas basins with a pretty fragmented customer base. I expect you have a decent view from a lot of customers on what their expectations are going forward for activity. Could you talk a little bit about your expectations for US gas drilling activity over the next, I don't know, 6 to 12 months?

Speaker #10: Okay . That makes sense . And then for the US , obviously the oil basins , the outlook is a little bit circumspect .

Operator: I would think in the gas basins, it's, you know, you've seen almost 20% rig activity growth in gas in the U.S. year to date. You have a unique footprint in the gas basins with a pretty fragmented customer base. I expect you have a decent view from a lot of customers on what their expectations are going forward for activity. Could you talk a little bit about your expectations for U.S. gas drilling activity over the next, I don't know, 6 to 12 months?

Speaker #10: I would think . And the gas basins , it's you know , you've seen almost 20% rig activity growth in gas in the US year to date .

Speaker #10: And you have a unique footprint in the gas basins with a pretty fragmented customer base . So I expect you have a decent view from a lot of customers on what their expectations are going forward for activity .

Speaker #10: Could you talk a little bit about your expectations for US ? Gas drilling activity over the next ? I don't know , 6 to 12 months ?

Dustin Honing: Yeah, I think we have a decent viewpoint on where activity might be going on gas. I think the Marcellus is, I would say, steady to low growth. There might be some, what we've seen is there's been a bit of high grading within the basin. As we've added more rigs to the basin, there's been a few instances where a rig has gone down. They haven't, our additions there haven't necessarily resulted in basin growth. In the Haynesville, I think most people are looking at the Haynesville as a swing producer for LNG exports and the natural gas production in general. We could see higher activity in the Haynesville over the next year if gas prices are supportive. I wouldn't say that we have a, as we stated in our press release, we don't have much of a view on that demand beyond early 2026.

Carey Ford: Yeah. I think we have a decent viewpoint on where activity might be going on gas. I think the Marcellus is, I would say, steady to low growth. What we've seen is there's been a bit of high grading within the basin. As we've added more rigs to the basin, there's been a few instances where a rig has gone down, our additions there haven't necessarily resulted in basin growth. In the Haynesville, I think most people are looking at the Haynesville as a swing producer for LNG exports and natural gas production in general. We could see higher activity in the Haynesville over the next year if gas prices are supportive.

Speaker #4: Yeah , I think we have we have a decent viewpoint on where we're activity might be going on gas . I think the Marcellus is I would say steady to low growth .

Speaker #4: There might be some what we've seen is there's been a bit of high grading within the basin . So as we've added more rigs to the basin , there's been a few instances where rig has gone down .

Speaker #4: So they haven't our additions there haven't necessarily resulted in basin growth in the Haynesville . I think most people are looking at the Haynesville as a as a swing producer for LNG exports .

Speaker #4: And natural gas production in general . So we could see higher activity in in the Haynesville over the next year if gas prices are supportive .

Carey Ford: I wouldn't say that we have as we stated in our press release, we don't have much of a view on that demand beyond early 2026.

Speaker #4: But I wouldn't say that we have a as we stated in our in our press release , we don't have much of a view on that that demand beyond early 2026 .

Tim Monachello: What's the motivating factor behind, I guess, higher activity levels this year considering gas prices have been fairly uneconomic in the US? Is it just LNG export and building supply? Is that what you're seeing?

Operator: What's the motivating factor behind, I guess, higher activity levels this year, considering gas prices have been fairly uneconomic in the U.S.? Is it just LNG export and building supply? Is that what you're seeing?

Speaker #10: What's the motivating factor behind , I guess , higher activity levels this year , considering gas prices have been fairly uneconomic in the US ?

Speaker #10: Is it just LNG export and building supplies that what you're seeing ?

Dustin Honing: I think most people are seeing a wave of demand on both natural gas fired generation for data centers and electrification of the economy, then LNG exports. I think some customers are looking through any short-term volatility in gas prices and looking at the longer-term demand outlook.

Carey Ford: Yeah. I think there's a I think most people are seeing a wave of demand on both natural gas-fired generation for data centers and electrification of the economy, and then LNG exports. I think some customers are looking through any short-term volatility in gas prices and looking at the longer term demand outlook.

Speaker #4: Yeah , I think there's there's a I think most people are seeing a wave of demand on on both natural gas fired generation for data centers and electrification of the economy .

Speaker #4: And then LNG exports . And so I think some customers are looking through any short term volatility in gas prices and looking at the longer term demand outlook , okay .

Tim Monachello: Okay. That's helpful. Then could you just provide a quick overview of what the geographies the 27 upgrades are going to?

Operator: Okay, that's helpful. Could you just provide a quick overview of what the geographies the 27 upgrades are going to?

Speaker #10: That's helpful . And then could you just provide a quick overview of what the geographies , the 27 upgrades are going to .

Dustin Honing: It's really a mix, Tim, but think of it, we obviously commented on the two Montney rigs that we're gonna bring up from the US into Canada. Heavy oil is really a key area we've invested a lot. This would be our Clearwater basin and then more into the unconventional plays in SAGD. One comment on that. We've seen a lot of enthusiasm with our customers on these upgrades where we have recognized a lot of upfront payments throughout the year to help support these upgrades as well. When you look down to the US, it's primarily weighted to the Haynesville and the Marcellus, but we have had some upgrade opportunities with high torque equipment in the Rockies and even in the Permian.

Dustin Honing: It's really a mix, Tim, but think of it, we obviously commented on the two Montney rigs that we're going to bring up from the U.S. into Canada. Heavy oil is really a key area we've invested a lot. This would be our Clearwater Basin and then more into the unconventional plays and SAGD. One comment on that, we've seen a lot of enthusiasm with our customers on these upgrades where we have recognized a lot of upfront payments throughout the year to help support these upgrades as well. When you look down to the U.S., it's primarily weighted to the Haynesville and the Marcellus, but we have had some upgrade opportunities with high-torque equipment in the Rockies and even in the Permian.

Speaker #5: So .

Speaker #4: It's it's really a mix Tim . But think of it . We obviously commented on the two Montney Riggs that we're going to bring up from .

Speaker #9: The US into .

Speaker #4: Canada . Heavy oil is really . a key area . We've invested a lot . So this would be our Clearwater Basin and then more into the unconventional plays and sagged .

Speaker #4: One comment on that . We've seen a lot of enthusiasm with our customers on these upgrades , where we have recognized a lot of upfront payments throughout the year to help support these upgrades , as well .

Speaker #9: And then .

Speaker #4: When you look down to the US , it's it's primarily weighted to the Haynesville and Marcellus , but we have had some upgrade opportunities with high torque .

Speaker #4: equipment in the Rockies .

Speaker #9: And .

Speaker #4: Even in the Permian . Yeah , and I would just add to that , Tim , I believe we said this in the press release , but the vast majority of the upgrades are going to areas in North America where we expect to have year over year increases in activity .

Carey Ford: Yeah. I would just add to that, Tim, I believe we said this in the press release, the vast majority of the upgrades are going to areas in North America where we expect to have year-over-year increases in activity. It's a little bit out of step with kind of the broader market, but in the Haynesville, in the Marcellus heavy oil and in the Montney, we expect to have higher year-over-year activity, and that's what's driving these upgrades.

Operator: Yeah. I would just add to that, Tim, I believe we said this in the press release, but the vast majority of the upgrades are going to areas in North America where we expect to have year-over-year increases in activity. It's a little bit out of step with the broader market, but in the Haynesville, in the Marcellus, heavy oil, and in the Montney, we expect to have higher year-over-year activity. That's what's driving these upgrades.

Speaker #4: So it's a little bit out of step with kind of the the broader market . But in the Haynesville , in the Marcellus heavy oil and in in the montney , we expect to have higher year over year activity .

Speaker #4: And that's what's driving these upgrades .

Tim Monachello: Okay. That's, very helpful. I'll turn it back. Thanks.

Dustin Honing: Okay, that's very helpful. I'll turn it back. Thanks.

Speaker #10: Okay . That's very helpful . I'll turn it back . Thanks .

Operator: Yeah, thank you, Tim.

Carey Ford: Yeah. Thank you, Tim.

Speaker #4: Okay . Thank you Tim .

Lavonne Zdunich: I'm not showing any further questions at this time. I'd like to turn the call back over to Lavonne for any further remarks.

Operator: I'm not showing any further questions, Tom. I'd like to turn the call back over to Lavonne for any further remarks.

Speaker #2: And I'm not showing any further questions . Time . I'd like to turn the call back over to Lavon for any further remarks .

Lavonne Zdunich: Thank you for taking the time to learn more about Precision Drilling today. With that, we will sign off. Everyone, enjoy your day. Thank you.

Carey Ford: Thank you for taking the time to learn more about Precision Drilling today. With that, we will sign off. Everyone, enjoy your day. Thank you.

Speaker #3: Thank you for taking the time to learn more about precision drilling today . And with that , we will sign off . Everyone , enjoy your day .

Speaker #3: Thank you .

Operator: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

Lavonne Zdunich: Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.