Operator: Good day, and thank you for standing by. Welcome to the PRECISION DRILLING Corp. 2026 Third Quarter Results Conference Call. I would now like to turn the conference over to Lavonne Zdunich, Director of Investor Relations. Please go ahead.
Lavonne Zdunich: Welcome everyone to PRECISION's Q3 earnings conference call and webcast. Today, I am joined by Carey Ford, our President and CEO, and Dustin Honing, CFO. Yesterday, PRECISION reported solid Q3 results, which Dustin will review, followed by operational and outlook commentary from Carey. Once we have finished our prepared comments, we will open the call to questions. Some of our comments today will refer to non-IFRS financial measures and will include forward-looking statements, which are subject to a number of risks and uncertainties. Please see our news release and other regulatory filings for more information on financial measures, forward-looking statements, and risk factors. As a reminder, we express our financial results in Canadian dollars unless otherwise indicated. With that, I will pass it over to Carey to begin.
Carey Ford: Thank you, Lavonne. Good morning, and good afternoon, everyone. Before I hand the call over to Dustin, I would like to briefly frame the quarter for our listeners and highlight our progress against our 2026 priorities. PRECISION delivered differentiated North American revenue growth across the drilling and C&P service lines and continued to make strategic investments in our fleet while meeting our capital return commitments. In short, it is what we said we would do. In our press release, we guided to 25 North American rig upgrades this year. The contracted upgrades remain the best opportunity to deploy capital and create short and long-term shareholder value. Upgrades have attractive contracted returns, improve fleet capabilities, and align our service delivery with longer-term customer programs.
Carey Ford: These fleet investments and service delivery by PRECISION crews, supported by technology and a growing contract book, position our business for continued growth in Q4 and create an improved platform for customer service delivery and cash flow generation in 2027. With that, I will turn it over to Dustin.
Dustin Honing: Thank you, Carey, and good morning, good afternoon for those calling in different locations. For Q3 2026, revenues increased 15% from prior year to CAD 532 million, driven by stronger drilling activity levels in North America and higher average US day rates, partially offset by lower international results. Our operating expenses were impacted by a reactivation of six US rigs during the quarter in response to growing oil-driven demand in the Lower 48. Q3 results also included higher international operating costs from ongoing regional tensions in the Middle East. Q3 adjusted EBITDA was CAD 125 million, which equates to approximately CAD 133 million before share-based compensation expense, compared to prior year EBITDA of CAD 118 million, or approximately CAD 129 million before share-based compensation expense. Net earnings were CAD 21 million, compared to a net loss of CAD 7 million in Q3 2025.
Dustin Honing: PRECISION generated CAD 71 million of cash from operations, compared with CAD 76 million in Q3 2025. As previously communicated, cash flow was impacted by large non-cash working capital build associated with growing activity levels in Canada and the US in combination with our semi-annual interest payment. Capital expenditures were CAD 82 million, comprised of CAD 58 million for maintenance and infrastructure and CAD 24 million for upgrades. These investments were made in step with our shareholder returns program as we allocated CAD 31 million towards share repurchases during the quarter. Moving on to our operating segments. In Canada, Q3 drilling activity averaged 73 active rigs, an increase of 10 rigs from Q3 2025. Our reported Q3 daily operating margins were CAD 12,817 compared with CAD 13,007 in Q3 2025. Both activity and margins were in line with prior guidance.
Dustin Honing: During the quarter, robust heavy oil activity led to increased utilization of our Super Single fleet by 18%, resulting in a higher proportion of days from this rig class. Our sustained year-over-year activity growth throughout 2026 continues to demonstrate the value of our differentiated positioning in both Canada's heavy oil and unconventional natural gas condensate basins. In the US, we averaged 43 active rigs, an increase of seven rigs from Q3 2025. Our daily operating margins were US$7,653 compared to US$8,700 in Q3 2025, also within our prior guidance range. Although revenue per day increased, margins were notably impacted by reactivating six rigs in the quarter at a cost of US$2,125 per utilization day. Looking ahead, our focus remains on demonstrating notable margin expansion in Q4 and into 2027. Internationally, PRECISION averaged seven active rigs, relatively in line with prior year Q3 activity levels.
Dustin Honing: International day rates averaged US$46,304, a decrease of 14% from prior year Q3. During the quarter, rig margins were unfavorably impacted by elevated operating expenses in the Middle East and rig mix with one of our higher performing rigs in Kuwait being idled this year. That rig is expected to return to work in mid-2027 under a five-year contract. In our Completion and Production Services segment, adjusted EBITDA increased 10% to CAD 21 million. Strong fundamentals in the Canadian market again drove increased well servicing demand, primarily in the heavy oil regions. Our growing rentals business is also delivering incremental year-over-year revenue and EBITDA, while strengthening our differentiated full-service offering to our customers. Moving on to forward guidance, I will begin with our expectations for the fourth quarter.
Dustin Honing: Starting in Canada, we continue to see robust demand for our Super Series rigs and expect our Super Triple and Super Single fleets to operate at near full utilization through the winter drilling season. For the fourth quarter, we expect average active rig count to be in the low 70s, which compares to 66 average rigs working in prior year Q4. Keep in mind that Canadian Q4 activity levels are impacted by temporary shutdowns over the Christmas season. Daily operating margins are expected to range between CAD 13,500 and CAD 14,500, consistent with fourth quarter of 2025. In the US, our fourth quarter average rig count is expected to be in the low to mid-40s. Margin expansion remains a critical deliverable for the business following the completed reactivations in the second and third quarters.
Dustin Honing: For Q4, we expect daily operating margins to climb between US$9,500 and US$10,500, a meaningful increase sequentially from Q3. Internationally, we expect to continue operating seven rigs through Q4 with elevated operating costs in the quarter. Our C&P business continues to generate strong free cash flow, driven by our well servicing and surface rental business lines. For Q4, we expect EBITDA to remain in line with prior year levels. Moving to guidance for the full year 2026, our capital expenditures budget increased to a range between CAD 275 million and CAD 285 million. Our increase towards the lower end of the range supports committed long lead purchases for projects to be completed next year. The higher end of the range provides for a pending upgrade opportunity which would have multiple rigs contracted through 2029 for a large Canadian producer.
Dustin Honing: Full-year depreciation is expected to be CAD 325 million and cash interest expense from debt is expected to be approximately CAD 45 million. Our effective tax rate is expected to be approximately 25% to 30%. PRECISION DRILLING expects business cash taxes to remain low in 2026, with cash taxes slightly increasing in Canada in 2027. There are no updates regarding the CRA dispute, and we are submitting our formal objection in Q4. For 2026, we expect SG&A to be CAD 100 million before share-based compensation expense, inclusive of one-time restructuring costs incurred this year. Share-based compensation guidance for the year ranges between CAD 25 million and CAD 50 million, assuming a share price between CAD 100 and CAD 150 and a one times multiplier. The multiplier can range between zero and two times, which can either reduce or increase our guidance range.
Dustin Honing: We enter Q4 with over CAD 460 million in total liquidity and are closing in on our long-term target of net debt to adjusted EBITDA ratio below 1 times. Through the first 9 months of 2026, we have reduced debt by CAD 75 million and repurchased CAD 47 million worth of shares. Despite the higher working capital build that is expected this year, we remain committed to reaching our CAD 100 million debt reduction target for 2026 while continuing to repurchase shares in Q4. With that, I'll pass it over to Carey.
Carey Ford: Thank you, Dustin. For my prepared remarks, I will cover 3 areas. First, the early results of our US market strategy. Second, the improving outlook for PRECISION DRILLING Corp. in the Canadian market, and third, how our technology offering is critical to delivering for our customers. Before I get to those topics, I want to acknowledge our field crews and leadership in the Middle East who are working in a dynamic environment and keeping people safe.
Carey Ford: They're delivering for our customers in the region and for the families of all PRECISION DRILLING Corp. employees. Thank you. Moving on to the US, where PRECISION DRILLING Corp.'s strategic approach to strengthening the business is producing results. With an average of 43 active rigs during the quarter compared to 35 active in Q2. Our team has led field performance with well-trained crews supported by our Alpha and Clarity platforms, delivering critical customer KPIs across the fleet.
Carey Ford: PRECISION DRILLING Corp.'s field performance and successful reactivations have solidified customer relationships, resulting in steadier activity and an increasing number of customers with multiple PRECISION DRILLING Corp. rigs. In no basin is this more apparent than the Permian, where we are currently running 16 rigs compared to 8 rigs 1 year ago. Our team has delivered this increase by building on a high-performance track record, onboarding new customers, upgrading rigs with customer contracts, and deepening customer relationships. I'm thrilled with the reputation and business PRECISION DRILLING Corp. is building in West Texas through the relentless efforts of our sales, operations, technology and operations support teams, and I'm excited for the future growth in this important region. As discussed last quarter, we have experienced some softness in the Northeast, but multiple rigs are firing up in that region over the next few months, which will drive activity growth.
Carey Ford: We expect our rig count to range for the US in the low to mid-40s for the remainder of the year and are experiencing an elevated number of requests for rig startups early next year, supporting an improved activity outlook for 2027. As we have projected on previous conference calls, rig reactivations have slowed, rig fixed cost absorption has improved, and we now expect Q4 margins to reach the highest level in the past 2 years, providing a foundation for steadier and potentially growing profitability in the US next year. Second, I would like to discuss the outlook in the Canadian market. The positive news flow from the Canadian energy industry has been head-spinning.
Carey Ford: Despite continued wet conditions in the summer and into late October, as well as higher crude differentials and weaker AECO gas prices, PRECISION DRILLING Corp activity remains at multi-year highs across both the drilling and Completion and Production Services businesses. Our Montney activity can be characterized as steady year-over-year, while our Super Single rigs servicing the heavy oil markets had Q3 utilization up 18% year-over-year, reflecting the high performance of this rig class and our customers' favorable economics. For those listeners who do not follow the Canadian market closely, I will recap several of the recent market developments. For years, the challenge for Canadian producers has been unlocking landlocked resources and gaining greater access to global markets. Today, that picture is changing.
Carey Ford: Following the completion of the TMX expansion and LNG Canada Phase 1 projects, the Pacific Link Pipeline Project has been designated a project of national interest, which means it will be reviewed and potentially approved by the federal government within 1 year. This pipeline could provide access to tidewater for an additional 1 million barrels of oil per day. Additionally, Shell recently reached a final investment decision on LNG Canada Phase 2, and the recent election in British Columbia has brought growing political support for LNG development. There are numerous other pipeline proposals with Western, Eastern, and Southern routes, as well as discussions on ports and additional infrastructure projects to support the growth of Canada's energy industry.
Carey Ford: At the same time, there are emerging sources of domestic demand, including the proposed Greenlight Data Center in Alberta, combined with more supportive federal framework for advancing major projects, and a federal mega tax deduction for infrastructure investments, creating a more constructive backdrop for Canadian energy investment. We believe these developments have the potential to unlock significant investment and support sustained drilling activity for both oil and gas across Western Canada. Another market trend is customer consolidation, which continues in the Montney, Duvernay, and Heavy Oil regions. These larger consolidated entities often have longer-term development programs which come with increased expectations for efficiency, field support, and a greater desire to utilize technology. To meet these evolving customer needs, PRECISION DRILLING Corp continues to invest in our fleet, people, and technology.
Carey Ford: This alignment is evident in our growing Canadian contract book, with 28 rigs under contract in the third quarter, up from 16 just 1 year ago. We are seeing and meeting the same evolving customer needs in our well service division, where PRECISION DRILLING Corp's ability to deliver safe and consistent operations with well-trained and well-supported crews is an increasingly important differentiator and has resulted in improved financial performance year-over-year. The final area I would like to cover is technology, which is core to supporting our crews in all our North American drilling operations. Our Alpha and EverGreen businesses are on track to have their highest revenue and contribution margin ever. This makes sense given that our customers continue to seek higher efficiency operations and solutions that reduce emissions and diesel consumption. Our Clarity platform and digital twin offerings are adding another layer to what we can offer customers.
Carey Ford: On our Q2 call, I mentioned that we would be opening our Calgary remote ops center in August. Since then, we have had over 100 customer representatives from 12 different customers visit our center to observe our Alpha technology capabilities and interact with our optimization team. We have had in-depth discussions with customers about our optimization team's work directly with our crews using real-time data and AI-driven insights to continuously improve operating practices, equipment performance, and safe drilling results. We are not just monitoring operations and providing data-driven insights and solutions, but are actively working with our crews to optimize performance. Although we have certainly opened up some eyes as to what is possible with our technology platform, and that is exciting, I am more excited about the ongoing customer performance dialogue and PRECISION's enhanced ability to strengthen long-term partnerships with our technology platform.
Carey Ford: These developments will continue to be an important part of the PRECISION story, and we will certainly have more to report in the future. In closing, I would like to thank our crews, field leadership, and all PRECISION employees for their commitment to safety, customer service, and operational excellence. Their work is the reason customers continue to choose PRECISION and what drives the success of our company. With that, I will hand the call back to the operator for questions.
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 will pause for a moment while we compile our Q&A roster. Our first question comes from Aaron MacNeil with TD Cowen. Your line is open.
Aaron MacNeil: Hey everyone. Thanks for taking my questions. You have highlighted the potential for more rig upgrades next year, and I assume that is mostly capital rather than operating costs, but how should we think about the Canada versus US split? Would any US upgrades also bring reactivation costs? I think you are running, call it 45 rigs today versus roughly 50. I think they could go back to work without a reactivation spend, so there is some wiggle room there. But at the end of the day, how should we think about the sustainability of that Q4 US margin guide into 2027 purely from the cost side?
Carey Ford: Aaron, I think touching on the margin guidance first. We will give margin guidance for Q1 on our February call, but I can tell you that we think we are hitting a more sustainable margin, and Q4 is going to reflect that, and that comes from 2 points. One is we have reactivated a large number of rigs this year, and we reactivated 6 in Q3. We might have some reactivations next year, but it will be a much smaller number, and it will be on a much higher base of activity. If we enter the year next year, say we are running mid-40s rig count, one reactivation is going to have a much smaller impact on our overall fleet margins than it did this year.
Carey Ford: I think the number of reactivations we would consider next year would be in the single digits if we continue to see increased demand for rigs. I think, yes, it might continue, but it is going to be a much smaller amount than this year. Anything to add, Dustin?
Dustin Honing: Just to build on that, Aaron, to what was mentioned, we have just over 50 rigs that are warm, ready to go right now. We are actually reactivating one rig in Q4, and it just demonstrates with that pace that Carey is talking, that we have confidence in holding our margins.
Carey Ford: Yeah. I did guide to a lot of customer inquiries for rigs starting early next year, which should provide some potential for growth and activity from the Q4 levels.
Aaron MacNeil: Makes sense. Thanks. Dustin, one for you. It will not be the CRA one, I promise. With the CAD 100 million of debt nearly met, the debt target nearly met, and only CAD 90 million left on the CAD 700 million long-term goal, it looks like 2027 is when free cash flow can shift meaningfully towards buybacks. You have bought back CAD 47 million of stock so far this year, and you are up to 50% of free cash flow framework. Once debt repayment is no longer competing for cash, how much could that share of free cash flow, call it after capital spending, go to the buyback in 2027? Is it reasonable to think that there will be a ramp next year, and could you look at an SIB or other ways to accelerate repurchases?
Dustin Honing: Aaron, I would say we are really excited about the flexibility we have built in the company. We are nearly there on the debt reduction journey. We have got a little bit more to go. We will chip at the CAD 25 million here ongoing. We will give formal guidance as we always do next year. Rest assured, our strategic priorities will have a formal target on what we intend to return to shareholders, but certainly see share buybacks as a primary avenue that we can enhance value for our shareholders.
Carey Ford: I would just add to that, I think at the end of this year, when we have paid down CAD 100 million, we will have, I think, CAD 60 million or CAD 65 million left on the debt repayment. We have been talking about trying to get to a 1x multiple of leverage, and we should be there at the end of this year, very beginning of next year. As Dustin said, it does give us a lot more flexibility on how we deploy capital to shareholders.
Aaron MacNeil: Had to try. Thanks, guys. I will turn it back.
Carey Ford: Thanks, Aaron.
Dustin Honing: Thanks.
Operator: Our next question comes from Keith Mackey with RBC Capital Markets. Your line is open.
Keith Mackey: Hey, good morning, and thanks for taking my questions. Can we just talk a little bit more about the potential upgrade opportunity, Cary? I know you took some time to detail out the rationale for doing such upgrades. Maybe just talk about how many rigs that could potentially be, what types of upgrades you might be putting on there. Is there any robotics inclusion, for example? Would that potentially be the 2026 portion of the total spend, or would that just be the total spend of this potential opportunity as far as CapEx goes?
Carey Ford: Okay. I think there are a few questions in there. The last one I will answer first. The 2026 potential spend would be for a customer in Canada, and that would be effectively all of the spend for the customer for the one we referenced in our press release. In terms of upgrades in 2027, in Canada, it will be similar. We would probably have opportunity to do 2 or 3 kind of ERD upgrades where we have completed 2 this year, or completed 1. We have 1 for delivery here soon. It will be those types of upgrades in the Montney and then continued pad upgrades for Super Singles in the heavy oil regions. I think that is probably also low single digits, maybe 1 or 2 or 3 of those types of rigs.
Carey Ford: In the US, it is going to be reactivating and upgrading Super Triple 1500s, likely for the Permian, but we do have some opportunities for the Haynesville as well. I think, as I mentioned on the last question, that is going to be single-digit numbers of opportunities. Probably I would say low to mid-single digit types of opportunities in the US. With that comment, I am really trying to capture the benefit of the upgrades that we have completed and the fact that those opportunities are finite, and when we have them and it lines up with a good contract and a good capital return, we want to execute on it. But there is not an unlimited number of those opportunities.
Keith Mackey: Perfect. Understood. Can you maybe just detail a little bit more about what you are seeing in the Canadian market? They certainly outlined some positive trends as far as the macro backdrop and policy backdrop. Do you think those changes might ultimately lead to the industry requiring more rigs, or are we going to be in a market where it is just we might get the same number of rigs running for more quarters during the year? Normally, we have the Q1 peak, and then it kind of comes back closer to that in Q3 and Q4. Do you see that changing, or are we actually going to need more rigs in total to service some of these new aspirations, do you think?
Carey Ford: Yeah, I think we will see. The way you described it with more of a level load throughout the year has certainly given us more drilling days throughout the year, sometimes with the same number of rigs. I mean, we have commented on previous conference calls, when we do a pad upgrade to a Super Single, we typically add 100 drilling days throughout the year. So if we have 27 Super Single rigs that do not have pad configurations yet, if we did all of those, we would actually add 9 more rigs to our fleet or the capability of 9 more rigs. We also have the opportunity to move Super Triple 1200s from the US market to Canada. So if there is more demand, we think we can meet it. If there is more drilling days throughout the year, we are going to benefit from that.
Carey Ford: But we certainly have not had customers point to the need to add significantly more rigs to the Canadian fleet. But we will see how this thing develops.
Keith Mackey: Understood. Appreciate the color.
Carey Ford: Okay. Thanks, Steve.
Operator: Our next question comes from Sean Mitchell with Daniel Energy Partners. Your line is open.
Sean Mitchell: Good morning. Thanks for taking the questions. Carey, maybe just talk a little bit about where you are seeing inflation. How is that impacting the global operations, and what are you guys doing today to manage it? I think the industry at large, obviously, there is lots of talk about higher diesel costs, but just where are you seeing it most within labor, parts, logistics? Any color on inflation?
Carey Ford: Sure. I have a couple areas I would point to, but maybe I will point it to Dustin because he is really in the day-to-day on how it is impacting our operating costs.
Dustin Honing: Yeah. Hey, Sean. It is certainly a primary focus for any oil field service provider, but I would say today we have managed it very well. We have the benefit of a vertically integrated business model. We have internal manufacturing. Our tech centers, we can do our upgrades and our maintenance projects in-house, and we even have our supply stores. So it has helped us mitigate some of the cost escalation.
Dustin Honing: But if I were to pick a few primary areas that we are constantly managing every day, I would say one, access and retention of high-end field labor. That is certainly paramount. Number 2 would be steel-intensive purchases, and I point specifically to drill pipe, and that is further compounded by accelerated wear that we are seeing in some basins that we are operating. Then, just as you mentioned, higher diesel prices, and that really affects several areas of our supply chain.
Dustin Honing: If I put that into a regional perspective, I would say the 2 parts of our business most exposed to inflation is certainly international drilling would be one, and that should not surprise anyone with the logistical challenges we are dealing with. But certainly C&P, our business here in Canada with well servicing. That segment, I would say staffing and retaining high-end talent remains an industry-wide challenge. It is the only business where we directly absorb the cost of fuel for our rigs, whereas in drilling, it is more of a pass-through charge. So we have had to work really closely with our customers to help manage both of those challenges. Although we do not really procure fuel directly in the drilling business, it has been a platform for our EverGreen offering, and I would say there has certainly been an uptick of interest from our customers there.
Carey Ford: Yeah. The EverGreen offering it is an emissions reduction offering, but it is also a diesel reduction offering. So we have had opportunities to put batteries on rigs, bi-fuel systems, hydrogen injection on our Super Single rigs, all with the aim of helping our customers reduce their diesel costs. So that has been one of the big drivers of the success of that service line this year. The other point that Dustin kind of alluded to on retaining crews, we had a field-wide labor wage increase in Canada, I guess, probably a couple of months ago, and then about a month ago, we had a similar increase in the US. So that is largely due to our need to retain crews in an increasing activity environment and just a lot of growth in infrastructure projects on both sides of the border. So those would be the big areas there, diesel and labor.
Sean Mitchell: Got it. Thanks for the color. Maybe I will squeeze one more in. Just around contract duration. Are US operators and kind of where are their heads today on willingness to sign contracts or multi-year? Has that shifted with the rig count increasing? Are they looking for longer term? Are any of these guys looking to lock in longer-term rigs before the market potentially could tighten further? Are those conversations starting to happen? Any color on that front?
Carey Ford: Sure. I think that is a really good question, Sean Mitchell. The first part of this year, I think we were in a zero or call it spot to 6-month type market with the occasional 1-year contract. Then throughout the middle of this year, it has kind of gone into 6-month to 1-year contract. Now we are having more conversations in the 1 to 2-year range. It is certainly not where the broad market is. I think the broad market is really kind of in a 6-month to 1-year type range. But we are having more conversations in that 18-month, 2-year range with customers. So we are certainly seeing it move.
Sean Mitchell: That is helpful. Thank you. I will turn it back.
Carey Ford: Thank you.
Operator: Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1 1 on your telephone. Our next question comes from Tim Monachello with ATB Cormark Capital Markets. Your line is open.
Tim Monachello (ATB Corma: Hey there. Most of my questions have been answered, but I am curious about Canadian pricing, the Canadian pricing outlook here. It seems like the Q1 activity profile is for full utilization, has been strong for a couple of quarters here. Are you seeing any willingness to move pricing higher across the industry?
Carey Ford: Yeah, there is certainly support for it with utilization and increasing performance requirements for the rigs. We have moved pricing up a bit throughout the year. I would not call it a step change in pricing per rig class. We really won't have an opportunity to broadly reprice rigs until spring breakup. But we are having lots of conversations with customers about adding features to the rigs that will drive pricing higher than what we are seeing today.
Tim Monachello (ATB Corma: Okay. Got it. Then, I guess, in the US market, you were guiding to getting close to 50 rigs by the end of the year previously. Now it is mid-40s. Is that just a customer scheduling phenomena or is there something else we should be thinking about?
Carey Ford: So the
Tim Monachello (ATB Corma: Sorry, go ahead.
Carey Ford: I was going to say that the guidance on the last conference call said that we would be low 40s in Q3, and that we would likely touch the high 40s at some point during the quarter. I think we were at 46 rigs last week. We are not quite at high 40s, but maybe call it one or two rigs short. I do not remember ever giving formal guidance for 50 rigs.
Tim Monachello (ATB Corma: Okay. Maybe I just made that up. Do you So no change to the outlook in the US, and you think that you will see some tailwinds in 2027 versus where you exited in 2026?
Carey Ford: Yeah. Tim, I think 50 rigs is on the horizon. I do not know when that happens. It is possible that it could happen this year. It is probable to happen sometime in the first part of next year. As Dustin said, we will have 52 hot rigs at the end of this quarter, which we should be able to hit that number without sustaining any major reactivation costs.
Tim Monachello (ATB Corma: Okay. Then maybe just an update on international opportunities. Maybe you can talk a little bit about what you are seeing from that Argentina partnership and any opportunities to reactivate rigs in the Middle East.
Carey Ford: Yeah, I think we have the one reactivation scheduled in Kuwait in the middle of next year. Outside of that, we do not have anything in the works. In terms of Argentina, it certainly is an exciting market, and there is a lot of demand there for US high-spec rigs to get upgraded and moved down to the market. We have had conversations with every single major operator in Argentina about it. It is not a matter of the demand and us being able to deliver to meet the demand. It is just a matter of contract terms and what we are looking for in terms of mitigating some financial risk in a contract in the market. We have not been able to meet in the middle yet. We are still working on it, and if we do, it will be a good contract and we will be able to deliver.
Tim Monachello (ATB Corma: Okay, great. I appreciate it, and congrats on a nice quarter.
Carey Ford: Okay. Thanks, Tim Monachello.
Operator: Our next question comes from Derek Podhaizer with Piper Sandler. Your line is open.
Derek Podhaizer: Hey, just want to ask about your comments around the elevated request for startups for some rigs in the beginning part of the year. Maybe you can help us understand a little bit more if that is public versus private, basin-specific. Obviously, you have the 52 hot stack rigs, and I think it sounds like that is your longer-term ambition. But maybe just expand more on those comments as far as who is requesting the rigs and where are those requests coming from.
Carey Ford: It is a mix of publics and privates. I would say that the publics in the past few months have gotten more active with rig inquiries, whereas the H1 of last year was largely the or H1 of this year was largely the private customers. And then the basins where we are seeing it, largely in the Permian, but a handful in the Haynesville as well, and the Rockies, I would say. The rig adds that we have guided to in the Northeast are kind of already in the bag and we have got contracts signed. So I would say that the comment on the Q1 inquiries are really Permians with a few in the Haynesville and a few in the Rockies.
Derek Podhaizer: Okay. That makes sense. The Permian, you said you are up to 16 rigs. I think you were 8 last year, so a huge improvement there. When we think of PRECISION, we think really just primarily the Northeast and the Haynesville, but obviously, you are a clear Permian player making a lot of strides there. Any other regions that you think the market is underestimating you guys that are kind of targets for growth as you look into next year or just over time that we should really think about?
Carey Ford: Well, those are the 4 main regions for us today. It would be the Rockies, the Permian, the Haynesville, the Marcellus. We have a couple of rigs working in the Eagle Ford, and that kind of blends into the Haynesville. So we might see a little bit more activity there. But currently, we do not have any rigs running in Oklahoma or North Dakota, which would be the other 2 big markets. I would say, too, that in some of these inquiries, the robotics discussion has heated up a bit, and we are having more customers in both the US and Canada talking to us a bit deeper about robotics offering. We are excited about those potential opportunities.
Derek Podhaizer: Great. Thank you very much. Turn it back.
Carey Ford: Okay. Thank you, Derek.
Operator: I am not showing any further questions at this time. I turn the call back over to Lavonne for any further remarks.
Lavonne Zdunich: Thank you to everyone for joining us today. If there are any follow-up questions, you can reach out to myself in the investor relations suite. Thank you. We are signing off.
Operator: Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.
