Precision Drilling Corporation ("Precision" or the "Company") (TSX:PD, NYSE:PDS) announces 2025 fourth quarter results and capital allocation plans for 2026 to drive shareholder value.
Financial Highlights and 2026 Capital Allocation Plans
Revenue in the fourth quarter was $479 million compared to $468 million in the same quarter last year as higher rig activity in the U.S. was partially offset by lower international activity.
Adjusted EBITDA(1) was $126 million, including $6 million of share-based compensation expense. In 2024, fourth quarter Adjusted EBITDA was $121 million and included a share-based compensation expense of $15 million.
Net loss attributable to shareholders was $42 million and included a non-cash asset charge of $67 million related to decommissioning drilling rigs and a non-cash charge of $17 million related to drill pipe. In the fourth quarter of 2024, net earnings attributable to shareholders was $15 million.
Cash provided by operations during the quarter was $126 million, funding capital expenditures of $81 million and share repurchases of $22 million, while building our cash balance by $47 million.
We continued to strengthen our financial position, ending the year with a Net Debt to Adjusted EBITDA ratio(1) of approximately 1.2 times and more than $445 million of available liquidity.
For the year ended December 31, 2025, we achieved our annual debt reduction and return of shareholder capital targets, reducing debt by $101 million and repurchasing $76 million of common shares.
Based on our current outlook, in 2026 we expect to invest $245 million in our fleet and infrastructure, reduce debt by $100 million, and allocate up to 50% of free cash flow, before debt repayments, toward share repurchases.
Operational Highlights
Canada averaged 66 active drilling rigs, slightly up from 65 active rigs in the same quarter last year.
Canadian revenue per utilization day was $35,241 and comparable to $35,675 in the fourth quarter of 2024.
U.S. averaged 37 active drilling rigs, up 9% from the fourth quarter of 2024 while average activity was down 42 rigs or 7%(2). For the past three quarters, our U.S. rig utilization increased 25%, contrary to an industry decrease of 8%(2).
U.S. revenue per utilization day was US$30,904 and similar to US$30,991 in the same period last year.
Internationally, we averaged seven active rigs versus eight in the fourth quarter of 2024, while revenue per utilization day was US$53,505 compared to US$49,636 in 2024.
Canadian well service rig operating hours were 61,231, increasing 6% over the same quarter in 2024.
(1) See "FINANACIAL MEASURES AND RATOS".
MANAGEMENT COMMENTARY
Precision's President and CEO, Carey Ford, provided the following commentary: "In 2026, Precision enters its 75th year of delivering High Performance, High Value results to our customers and shareholders. We continue to meet the evolving needs of the energy industry by attracting, developing, and retaining the highest-quality people, and by delivering advanced, scalable technology across our fleet. Our ability to execute reliably and support our customers' development plans has been central to our long-standing track record of success. This enduring foundation supports Precision as we deliver sustained, long-term value for shareholders.
"Our fourth quarter and full year 2025 financial and operational results underscore the effectiveness of Precision's High Performance, High Value strategy. For the year, our people delivered on our capital commitments to shareholders, with a combined $176 million allocated to debt reduction and share repurchases, while investing $263 million in equipment and technology-driven initiatives that will continue to differentiate Precision in the industry. For the quarter, we grew revenue, Adjusted EBITDA, funds provided by operations, as well as our Canadian and U.S. market share, compared to the fourth quarter of 2024. We look to build on these trends in 2026.
"Today, Precision is the second-most-active North American driller, with 123 rigs working from northern British Columbia to south Texas and from New Mexico to Pennsylvania. Our customers are demanding safe, efficient, and repeatable results, and we meet those demands with our fleet of Super Series drilling rigs, AlphaTM digital technologies, and EverGreenTM environmental solutions. Although oil and natural gas prices remain volatile, our customers are taking a disciplined approach to their development plans, driving steady activity for Precision and supporting rig upgrades.
"Precision's ability to leverage our cross-border scale and vertical integration to complete rig upgrades for customers was on full display in 2025. During the year, we upgraded 27 drilling rigs, enhancing the performance capability of our fleet and deepening relationships with several key customers in both Canada and the U.S., while generating attractive returns. We expect this competitive advantage in upgrading our drilling rigs will support our market position in the future.
"Complementing our North American drilling operations are our international drilling operations with seven contracted rigs in the Middle East and our Completion and Production Services business, where our market-leading well service and rental position in Canada continues to generate robust free cash flow.
"This year we are excited to build on our momentum and advance our High Performance, High Value strategy by delivering on our 2026 strategic priorities that include driving revenue growth through performance-driven technology, operational excellence, and deeper customer relationships; maximizing free cash flow through disciplined capital allocation; and enhancing shareholder returns with targeted debt reduction and direct capital returns.
"I would like to recognize the dedication of our field leadership and crews to safety and customer service, and congratulate all Precision employees on an excellent 2025 and their enthusiasm for the future," concluded Mr. Ford.
SELECT FINANCIAL AND OPERATING INFORMATION
Financial Highlights
For the three months ended December 31,
For the year ended December 31,
(Stated in thousands of Canadian dollars, except per share amounts)
2025
2024
% Change
2025
2024
% Change
Revenue
478,508
468,171
2.2
1,843,704
1,902,328
(3.1
)
Adjusted EBITDA(1)
126,386
120,526
4.9
489,615
521,221
(6.1
)
Net earnings (loss)
(41,868
)
14,930
(380.4
)
3,094
111,330
(97.2
)
Net earnings (loss) attributable to shareholders
(42,175
)
14,795
(385.1
)
1,842
111,195
(98.3
)
Cash provided by operations
126,114
162,791
(22.5
)
412,897
482,083
(14.4
)
Funds provided by operations(1)
124,750
120,535
3.5
435,423
463,372
(6.0
)
Cash used in investing activities
53,879
61,954
(13.0
)
208,324
202,986
2.6
Capital spending by spend category(1)
Expansion and upgrade
25,291
21,565
17.3
106,908
52,066
105.3
Maintenance and infrastructure
56,143
37,335
50.4
156,590
164,632
(4.9
)
Proceeds on sale of property, plant and equipment
(17,244
)
(8,570
)
101.2
(39,038
)
(30,395
)
28.4
Net capital spending(1)
64,190
50,330
27.5
224,460
186,303
20.5
Net earnings (loss) attributable to shareholders per share:
Basic
(3.23
)
1.06
(404.7
)
0.14
7.81
(98.2
)
Diluted
(3.23
)
1.06
(404.7
)
0.14
7.81
(98.2
)
Weighted average shares outstanding:
Basic
13,052
13,982
(6.7
)
13,334
14,229
(6.3
)
Diluted
13,052
13,987
(6.7
)
13,341
14,234
(6.3
)
(1) See "FINANCIAL MEASURES AND RATIOS".
Operating Highlights
For the three months ended December 31,
For the year ended December 31,
2025
2024
% Change
2025
2024
% Change
Contract drilling rig fleet
184
214
(14.0
)
184
214
(14.0
)
Drilling rig utilization days:
Canada
6,095
6,018
1.3
23,121
23,685
(2.4
)
U.S.
3,362
3,084
9.0
12,427
12,969
(4.2
)
International
644
736
(12.5
)
2,698
2,928
(7.9
)
Revenue per utilization day:
Canada (Cdn$)
35,241
35,675
(1.2
)
35,576
34,797
2.2
U.S. (US$)
30,904
30,991
(0.3
)
31,480
32,531
(3.2
)
International (US$)
53,505
49,636
7.8
52,195
51,227
1.9
Operating costs per utilization day:
Canada (Cdn$)
21,109
21,116
(0.0
)
21,305
20,424
4.3
U.S. (US$)
22,150
21,698
2.1
22,489
22,009
2.2
Service rig fleet(1)
145
160
(9.4
)
145
160
(9.4
)
Service rig operating hours(1)
61,231
57,932
5.7
234,166
242,479
(3.4
)
(1) The service rig fleet and service rig operating hours exclude our U.S. operations that we wound down in the second quarter of 2025.
Drilling Activity
Average for the quarter ended 2024
Average for the quarter ended 2025
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
June 30
Sept. 30
Dec. 31
Average Precision active rig count(1):
Canada
73
49
72
65
74
50
63
66
U.S.
38
36
35
34
30
33
36
37
International
8
8
8
8
8
7
7
7
Total
119
93
115
107
112
90
106
110
(1) Average number of drilling rigs working or moving.
Financial Position
(Stated in thousands of Canadian dollars, except ratios)
December 31, 2025
December 31, 2024
Working capital(1)
186,815
162,592
Cash
85,781
73,771
Long-term debt
679,291
812,469
Total long-term financial liabilities(1)
746,944
888,173
Total assets
2,726,690
2,956,315
Long-term debt to long-term debt plus equity ratio (1)
0.30
0.33
(1) See "FINANCIAL MEASURES AND RATIOS".
Summary for the three months ended December 31, 2025:
Revenue in the fourth quarter was $479 million compared to $468 million in the same period last year primarily due to higher drilling activity in the U.S., offset in part by lower international drilling activity. Revenue from our Canadian drilling and Completion and Production operations were comparable with the fourth quarter of 2024.
Adjusted EBITDA was $126 million compared to $121 million in the fourth quarter of 2024. Stronger activity in U.S. drilling and a lower share-based compensation expense were partially offset by lower international drilling activity and higher rig reactivation costs. For additional information on share-based compensation, which was $6 million versus $15 million in the same period last year, please refer to "Other Items" later in this release.
Net loss attributable to shareholders was $42 million or a loss of $3.23 per share compared to net earnings of $15 million or $1.06 per share for the same period last year. During the quarter, we recorded a non-cash asset charge of $67 million related to decommissioning 31 of our 215 marketable drilling rigs that no longer aligned with Precision's advanced technology and performance standards. We also recorded a non-cash charge of $17 million related to drill pipe as more complex drilling programs have reduced the useful life of this asset.
Cash provided by operations was $126 million and we repurchased 256,580 shares for $22 million and increased our cash balance by $47 million. As at December 31, 2025, Precision had more than $445 million in available liquidity.
In Canada, our revenue per utilization day less operating costs per utilization day was $14,132 and comparable to $14,559 in the fourth quarter in 2024. Quarterly operating costs per utilization day remained in line with 2024.
In the U.S., our revenue per utilization day less operating costs per utilization day was US$8,754 compared to US$9,293 in the same period last year, due to additional rig reactivation costs totaling US$713 per day in the fourth quarter of 2025 compared to US$338 per day in 2024.
Internationally, revenue per utilization day was US$53,505 compared to US$49,636 in 2024, as the prior year was negatively impacted by non-billable utilization days related to planned rig recertifications. The increase in revenue per utilization day was more than offset by lower international activity and our realized revenue declined to US$34 million in the fourth quarter compared to US$37 million in 2024. In May 2025, one drilling rig was temporarily suspended in the Kingdom of Saudi Arabia, reducing our active rig count to seven for the remainder of the year. During the fourth quarter of 2025, we incurred costs to reactivate this rig, which began operating in early February.
Completion and Production Services revenue was $71 million versus $69 million generated in the fourth quarter of 2024 even though we wound down our U.S. well service operations in the second quarter of 2025. Adjusted EBITDA was $17 million compared to $16 million in the fourth quarter of 2024 as robust demand and pricing for our Canadian completion and production services more than offset the shut down of our U.S. operations.
General and administrative expenses were $29 million versus $35 million in the fourth quarter of 2024, primarily due to lower share-based compensation expense.
Capital expenditures were $81 million compared to $59 million in the fourth quarter of 2024 and included $56 million for maintenance and $25 million for upgrades.(1)
(1) See "FINANCIAL MEASURES AND RATIOS."
Summary for the year ended December 31, 2025:
Revenue for the year was $1,844 million, representing a 3% decrease from $1,902 million in 2024. Revenue was negatively impacted by lower U.S. drilling activity and day rates year over year and lower U.S. service rig activity as we wound down our U.S. well servicing operations in the second quarter of 2025.
Adjusted EBITDA was $490 million versus $521 million in 2024. The decrease was primarily driven by U.S. drilling, which was in part offset by lower share-based compensation expense of $24 million compared to $47 million in 2024. Please refer to "Other Items" later in this release for additional information on share-based compensation.
Net earnings attributable to shareholders was $3 million or $0.14 per share compared to $111 million or $7.81 per share in 2024. The decrease was due to lower Adjusted EBITDA, decommissioning charges of $67 million, additional drill pipe charges of $17 million, and a higher deferred income tax expense related to our U.S. operations, partially offset by lower finance charges. Please refer to "Other Items" later in this release for additional information on income taxes.
Finance charges were $57 million and decreased $13 million as a result of our lower outstanding debt, partially offset by the impact of the weakening Canadian dollar on our U.S. dollar-denominated interest expense.
General and administrative costs were $114 million compared to $132 million in 2024, primarily the result of lower share-based compensation expense.
Cash provided by operations was $413 million, allowing us to reduce debt by $101 million, redeem $222 million (US$160 million) of 2026 unsecured senior notes, while drawing $122 million on our Senior Credit Facility, and repurchase 1,024,002 shares for $76 million. As at December 31, 2025, Precision had 12,932,399 shares outstanding, compared to 13,779,502 as at December 31, 2024, representing a decrease of 6%.
Capital expenditures were $263 million and included $157 million for maintenance, infrastructure, and intangible assets, and $107 million for upgrades, including 27 major rig upgrades. By comparison, in 2024 capital expenditures were $217 million and included $165 million for maintenance, infrastructure, and intangible assets, and $52 million for upgrades. The overall $47 million increase was driven by strong demand for customer-funded upgrades, offset in part by reduced maintenance expenditures due to lower U.S. and international activity.
STRATEGY
Precision's vision is to be globally recognized as the High Performance, High Value provider of land drilling services. We work toward this vision by defining and measuring our results against strategic priorities established at the beginning of every year.
Below we summarize the results of our 2025 strategic priorities.
Maximize free cash flow through disciplined capital deployment and strict cost management.
Generated cash from operations of $413 million, allowing us to fund 27 major rig upgrades, meet our debt reduction and share purchase goals, and increase our cash balance by $12 million year over year.
On track to realize approximately $10 million in annual savings by proactively reducing fixed costs in the first quarter of 2025 to address market uncertainty.
Delivered resilient operating margins in Canada and the U.S. even though average industry activity declined(1).
Sustained Completion and Production Services Adjusted EBITDA and free cash flow generation even though we wound down our U.S. well service operation in the second quarter.
Enhance shareholder returns through debt reduction and share repurchases. Plan to reduce debt by at least $100 million and allocate 35% to 45% of free cash flow before debt repayments for share repurchases.
Reduced debt by $101 million and ended the year with a Net Debt to Adjusted EBITDA ratio of 1.2 times. On track to achieve a sustained Net Debt to Adjusted EBITDA ratio of below 1.0 times.
Well positioned to meet our long-term debt reduction target of $700 million between 2022 and 2027. As at December 31, 2025, we have reduced debt by $535 million since the beginning of 2022.
Returned $76 million to shareholders through share repurchases, achieving the midpoint of our target range, and reducing our outstanding shares by 6%.
Renewed our Normal Course Issuer Bid (NCIB) in September, allowing repurchases of up to 10% of the public float.
Grow revenue in existing service lines through contracted upgrades, optimized pricing and utilization, and opportunistic consolidating tuck-in acquisitions.
Invested $107 million in upgrade capital, including 27 major customer-funded rig upgrades in Canada and the U.S.
Relocated two Super Triple rigs from the U.S. to Canada under long-term contracts.
Grew our leading Canadian drilling rig market share year over year(1) and maintained strong pricing with revenue per utilization day improving 2%.
Grew U.S. rig utilization in 2025 from a low of 27 active rigs in February to a peak of 40 active rigs in October and exited the year with 36 active rigs.
Continued to expand our EverGreenTM product offering across our Super Series fleet, increasing revenue 22% year over year.
2026 Strategic Priorities
Drive revenue growth and deepen customer relationships through contracted upgrades, continuous operational excellence, and by leveraging our performance-driven technology as a key competitive differentiator.
Maximize free cash flow through strategic capital deployment and sustained cost discipline.
Enhance shareholder returns by reducing debt $100 million in 2026 and allocating up to 50% of free cash flow, before debt repayments, directly to shareholders.
(1) See "SEGMENT REVIEW OF CONTRACT DRILLING SERVICES".
OUTLOOK
Near-term expectations for global energy demand growth remain tempered by persistent geopolitical uncertainties and continued signs of oversupply. However, this narrative has started to soften as demand indicators stabilize, particularly in natural gas markets, where accelerating LNG supply growth and strengthening consumption in key regions, including Asia and Europe, are expected to support a more constructive demand outlook in 2026.
Looking further ahead, we believe the long-term fundamentals for energy remain favorable, underpinned by economic expansion, rising energy needs from emerging economies, and sustained global appetite for LNG driven by the continued build-out of LNG infrastructure and trade flows. Additionally, natural gas-fired power generation is poised for multi-year structural growth as data centers scale rapidly to meet AI driven electricity demand.
In Canada, constructive commodity prices for heavy oil and condensate, plus additional takeaway capacity for both oil and natural gas continue to support Canadian activity. LNG Canada made its first shipment at the beginning of July and as customers take a long-term view of this business, demand for our Super Triple rigs is near full capacity. The Trans Mountain pipeline expansion continues to support heavy oil production, driving our Super Single rig utilization toward full capacity. We currently have 85 rigs active, after peaking at 87 rigs in January, and expect our winter drilling season activity to exceed last year's level.
In the U.S., while volatile WTI oil prices and drilling efficiencies continue to suppress oil-targeted rig activity, the natural gas rig count increased approximately 20% in 2025 as customers became more constructive on LNG off-take and AI demand. We capitalized on these emerging opportunities in natural gas basins such as the Haynesville and Marcellus and increased our U.S. drilling rig utilization days 25% over the last nine months of 2025. We currently have 38 rigs active and continue to have encouraging customer conversations that could result in additional activity increases in 2026.
Internationally, we currently have seven active rigs, including four in Kuwait and three in the Kingdom of Saudi Arabia, supported by contracts that extend into 2027 and 2028. In early 2026, one Kuwait rig was demobilized and activity was backfilled by reactivating our rig in Saudi Arabia that had been temporarily suspended in 2025. While the Saudi Arabia rig generates a lower operating margin, this transition maintains overall utilization levels in 2026. We continue to seek opportunities to increase our international utilization by pursuing long-term, contract-backed investments.
As the premier well service provider in Canada, the long-term outlook for this business is positive, driven by increased takeaway capacity from the Trans Mountain pipeline expansion and LNG Canada, and our High Performance, High Value service offering. We expect customer demand and pricing to remain strong into the foreseeable future, assuming no significant change in market conditions.
Overall, our outlook for the year is constructive and will continue to be commodity price dependent. In Canada, we expect our first quarter activity to surpass activity a year ago, as our 32 Super Triple and 47 available Super Single rigs are nearly fully utilized. In the U.S., we expect activity to be steady quarter over quarter, with some potential upside. Our operating margins in Canada should average between $14,000 and $15,000 per utilization day for the first quarter of 2026, which is consistent with the margin we reported in the first quarter of 2025. In the U.S., we expect our first quarter operating margins to remain stable and average between US$8,000 and US$9,000 per utilization day.
Capital spending in 2026 is expected to be $245 million and capital spending by spend category(1) includes $182 million for maintenance, infrastructure, and intangibles and $63 million for expansion and upgrades. The 2026 capital plan may fluctuate with activity levels and customer contract upgrade opportunities.
(1) See "FINANCIAL MEASURES AND RATIOS".
Contracts
The following chart outlines the average number of drilling rigs under term contract by quarter as at February 11, 2026. For the quarter ending after December 31, 2025, this chart represents the minimum number of term contracts from which we will earn revenue. We expect the actual number of contracted rigs to vary in future periods as we sign additional term contracts.
As at February 11, 2026
Average for the quarter ended 2025
Average
Average for the quarter ended 2026
Average
Mar. 31
June 30
Sept. 30
Dec. 31
2025
Mar. 31
June 30
Sept. 30
Dec. 31
2026
Average rigs under term contract:
Canada
20
18
16
21
19
22
20
16
15
18
U.S.
16
16
17
17
17
14
10
6
3
8
International
8
7
7
7
7
7
7
7
7
7
Total
44
41
40
45
43
43
37
29
25
33
SEGMENTED FINANCIAL RESULTS
Precision operates primarily in Canada, the United States and certain international locations, in two industry segments: Contract Drilling Services and Completion and Production Services. Contract Drilling Services includes drilling rigs, procurement and distribution of oilfield supplies, and the manufacture, sale and repair of drilling equipment. Completion and Production Services includes service rigs, oilfield equipment rental, and camp services.
For the three months ended December 31,
For the year ended December 31,
(Stated in thousands of Canadian dollars)
2025
2024
% Change
2025
2024
% Change
Revenue:
Contract Drilling Services
410,284
402,610
1.9
1,576,036
1,617,735
(2.6
)
Completion and Production Services
70,940
68,830
3.1
278,818
294,817
(5.4
)
Inter-segment eliminations
(2,716
)
(3,269
)
(16.9
)
(11,150
)
(10,224
)
9.1
478,508
468,171
2.2
1,843,704
1,902,328
(3.1
)
Adjusted EBITDA:(1)
Contract Drilling Services
124,498
125,683
(0.9
)
488,796
532,345
(8.2
)
Completion and Production Services
17,287
15,895
8.8
63,980
66,681
(4.1
)
Corporate and Other
