Precision Drilling Corporation

Second quarter 2026 revenue increased 11% year over year. Adjusted EBITDA was $97 million, or $95 million before share-based compensation recovery, versus $108 million in Q2 2025, or $112 million before share-based compensation expense. Net earnings were a loss of $1 million compared with net earnings of $16 million in Q2 2025. Cash from operations was $146 million, capital expenditures were $76 million, debt was reduced by $50 million, and $12 million was spent on share buybacks. In Canada, average drilling activity was a record 61 active rigs and normalized daily operating margins were $13,300 versus $13,900 a year ago; in the U.S., average rig count was 35 and daily operating margins were US$6,210. For Q3 2026, Canada rig counts are expected in the low to mid-70s with daily operating margins of $12,000 to $13,000, U.S. rig counts are expected in the low 40s with margins of US$7,000 to US$8,000, and international operations are expected to run seven rigs. Full-year 2026 guidance includes capex of $265 million, depreciation of $320 million, cash interest expense of about $45 million, SG&A of about $95 million before share-based compensation, effective tax rate of about 25% to 30%, debt reduction of $100 million, and allocating up to 50% of free cash flow to share repurchases.

Carey Ford framed 2026 as a year of executing on strategic priorities: growing revenue, deepening customer relationships, and returning cash through debt reduction and buybacks. He said Precision is halfway through the year and is already delivering on those goals, citing 8% year-to-date revenue growth, a larger contract book, and more activity in both Canada and the U.S. His tone was constructive but disciplined, stressing that the U.S. strategy is about building a more resilient business with better customers, stronger technology adoption, and margin improvement beginning in Q4 and into 2027.

Dustin Honing emphasized that Q2 revenue grew 11% year over year and that cash generation remained solid despite higher operating costs from U.S. rig activations and $3 million of international restructuring charges. He highlighted $146 million of cash from operations, $76 million of capex, $50 million of debt reduction, and $12 million of share repurchases in the quarter, while reiterating the 2026 capex budget of $265 million, depreciation of $320 million, cash interest expense of about $45 million, and SG&A of about $95 million before share-based compensation. He also said the company’s average cost of debt is 6.7%, liquidity is over $502 million, and the long-term goal of net debt-to-adjusted EBITDA below 1x remains unchanged.

Analysts focused on U.S. margin pressure, the number and cost of rig reactivations, and whether margins could improve into 2027; management said Q2 had seven major reactivations, Q3 should have about five, and reactivation costs run roughly $1,500 to $2,000 per day. On the CRA reassessment, Dustin Honing said Precision strongly believes its filing position is appropriate, disclosed a maximum potential liability of $155 million plus interest, and said the company expects any required upfront payment to be about $80 million all-in, with roughly $40 million due late 2026 or early 2027; he added that capital allocation plans have not changed. Questions also covered the Middle East, where Carey Ford said disruptions were minor but increased costs came from travel and operating interruptions, and the U.S. customer mix, where he said new additions are increasingly public operators and that Precision already knows of at least two opportunities where it is displacing competitors.