Precision Drilling Corporation ("Precision" or the "Company") (TSX:PD, NYSE:PDS) announces its 2026 first quarter results, reflecting higher utilization in both Canadian and U.S. drilling and well service operations year over year.
Financial Highlights
Revenue of $526 million was 6% higher than $496 million reported in the first quarter of 2025, due to higher activity in both the U.S. and Canada, which more than offset lower results internationally.
Adjusted EBITDA(1) was $124 million, including $19 million of share-based compensation expense as our share price appreciated 39% in the quarter. In 2025, our Adjusted EBITDA was $137 million and included $3 million of restructuring costs and $3 million of share-based compensation expense.
Net earnings attributable to shareholders in the first quarter was $17 million compared with $35 million in 2025. Our lower net earnings in 2026 was due to higher share-based compensation expense and increased depreciation expense from the change in useful life estimates.
Cash provided by operations during the quarter was $63 million, allowing the Company to repurchase $4 million of common shares and reduce debt by $25 million.
Capital expenditures in the first quarter of 2026 were $65 million compared to $60 million in 2025. Precision has revised its 2026 capital budget to $265 million from $245 million, driven by two contracted Canadian Super Triple drilling rig upgrades and higher expected activity in Canada and the U.S.
Operational Highlights
Canada averaged 79 active rigs compared to 74 active rigs in the first quarter of 2025, outpacing Canadian industry activity that declined 7%(2).
Canadian revenue per utilization day decreased to $35,021 from $35,601, primarily due to rig mix, as we had proportionately fewer active Super Triples.
U.S. averaged 37 active rigs in the first quarter of 2026 versus 30 in 2025. Precision's first quarter 2026 U.S. rig utilization days increased 24% while industry activity declined 7%(2).
U.S. revenue per utilization day increased to US$33,715 from US$33,157 in the same period last year. Excluding revenue from turnkey projects and idle but contracted rigs, revenue per utilization day in the first quarter of 2026 of US$31,865 was comparable to US$31,894 in 2025.
Continued deploying Alpha™ digital technologies to unlock performance improvements through automation, data analytics and real-time optimization, delivering record drilling results for our Canadian and U.S. customers.
Internationally, we had seven rigs under contract versus eight in the first quarter of 2025. Revenue per utilization day was US$51,596 from US$49,419 in 2025, driven by higher mobilization revenue.
Canadian well service rig operating hours increased 4% versus the same quarter in 2025.
(1) See "FINANCIAL MEASURES AND RATIOS."(2) See "SEGMENT REVIEW OF CONTRACT DRILLING SERVICES."
MANAGEMENT COMMENTARY
Executing Safely and Delivering High Performance Amid Global Volatility
Precision's President and CEO, Carey Ford, provided the following commentary: "In the first quarter, Precision delivered year over year revenue growth in a declining market, enhanced the capability of our drilling fleet, and continued to deliver on shareholder return commitments.
"As we entered the year, the global operating environment became increasingly complex, driven in part by escalating geopolitical conflict in the Middle East. The resulting commodity and financial market volatility, combined with heightened scrutiny of the global energy industry, has created one of the most unique operating environments we have experienced in several decades. For a company like Precision, with operations in the Middle East, effectively navigating the daily changes is critical.
"Throughout this period, our priorities have remained clear: first and foremost, ensuring the safety of our people; reliably delivering our High Performance, High Value offering to our customers; and increasing the velocity of communication with our customers, vendors, and crews. These priorities position us to respond quickly and decisively as conditions change.
"Internationally, despite minor activity disruptions and increased costs, our crews in the Middle East continue to operate safely and deliver excellent results for our customers. During the quarter, we also reactivated one rig, bringing our total active rig count in the region to seven, all supported by long-term contracts.
"In North America, Precision delivered activity growth in both Canada and the U.S., despite lower industry activity levels year over year. This performance reflects our continued success in driving revenue growth and deepening customer relationships through contracted rig upgrades, disciplined operational excellence, and the deployment of performance-driven technology. Precision remains well positioned as a trusted partner for customers seeking reliable, repeatable, and efficient drilling outcomes.
"Technology continues to be a key differentiator and central to our long-term strategy. During the quarter, we continued deploying Alpha™ digital technologies to unlock performance improvements through automation, data analytics, and real-time optimization, delivering record drilling results for our Canadian and U.S. customers. Our scalable digital portfolio has been a key contributor to our success in North America for several years.
"Looking ahead, we are encouraged by improving customer sentiment in both Canada and the U.S. In Canada, we expect our second quarter activity to be well above last year's level, supported by demand for our pad-capable Super Triple and Super Single rigs and a robust oil price environment. In the U.S., while we experienced contract churn in March and April, we expect our active rig count to return to the high 30s in June. We are experiencing a notable increase in inquiries from both oil and natural gas customers regarding rig availability and expect further rig additions and pricing increases in the second half of the year. Precision's scale, technology offering, and operational excellence will support growth opportunities as they emerge.
"Precision continues to maintain a disciplined approach to capital allocation, prioritizing balance sheet strength, high-return investments in our equipment and technology, and enhanced shareholder returns. We remain focused on maximizing free cash flow generation and reaffirm our published shareholder return commitments for 2026.
"I would like to thank our field leadership and crews for their continued commitment to safety, execution, and customer service. Their dedication underpins our ability to deliver consistent performance and advance our High Performance, High Value strategy while delivering long-term value for all stakeholders," concluded Mr. Ford.
SELECT FINANCIAL AND OPERATING INFORMATION
Financial Highlights
For the three months ended March 31,
(Stated in thousands of Canadian dollars, except per share amounts)
2026
2025
% Change
Revenue
526,051
496,331
6.0
Adjusted EBITDA(1)
123,947
137,497
(9.9
)
Net earnings
17,845
34,947
(48.9
)
Net earnings attributable to shareholders
17,376
34,511
(49.7
)
Cash provided by operations
63,154
63,419
(0.4
)
Cash used in investing activities
74,702
57,202
30.6
Capital spending by spend category(1)
Expansion and upgrade
30,274
19,546
54.9
Maintenance and infrastructure
34,726
40,419
(14.1
)
Proceeds on sale
(2,287
)
(3,765
)
(39.3
)
Net capital spending(1)
62,713
56,200
11.6
Net earnings attributable to shareholders per share:
Basic
1.34
2.52
(46.8
)
Diluted
1.34
2.20
(39.1
)
Weighted average shares outstanding:
Basic
12,932
13,683
(5.5
)
Diluted
12,941
14,287
(9.4
)
(1) See "FINANCIAL MEASURES AND RATIOS."
Operating Highlights
For the three months ended March 31,
2026
2025
% Change
Contract drilling rig fleet
184
215
(14.4
)
Drilling rig utilization days:
Canada
7,116
6,680
6.5
U.S.
3,332
2,691
23.8
International
611
720
(15.1
)
Revenue per utilization day:
Canada (Cdn$)
35,021
35,601
(1.6
)
U.S. (US$)
33,715
33,157
1.7
International (US$)
51,596
49,419
4.4
Operating costs per utilization day:
Canada (Cdn$)
20,739
20,821
(0.4
)
U.S. (US$)
24,424
23,568
3.6
Service rig fleet(1)
145
143
1.4
Service rig operating hours(1)
68,219
65,635
3.9
(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 2025
Average for the quarter ended 2026
Mar. 31
June 30
Sept. 30
Dec. 31
Mar. 31
Average Precision active rig count(1):
Canada
74
50
63
66
79
U.S.
30
33
36
37
37
International
8
7
7
7
7
Total
112
90
106
110
123
(1) Average number of drilling rigs working or moving.
Financial Position
(Stated in thousands of Canadian dollars, except ratios)
March 31, 2026
December 31, 2025
Working capital(1)
208,099
186,815
Cash
41,462
85,781
Long-term debt
663,859
679,291
Total long-term financial liabilities(1)
728,252
746,944
Total assets
2,748,154
2,726,690
Long-term debt to long-term debt plus equity ratio(1)
0.29
0.30
(1) See "FINANCIAL MEASURES AND RATIOS."
Summary for the three months ended March 31, 2026:
Revenue in the first quarter was $526 million, $30 million higher than in 2025 as U.S. and Canadian revenue increased by $24 million and $13 million, respectively, due to higher drilling activity, while partially offset by lower international drilling activity.
Adjusted EBITDA decreased 10% to $124 million from $137 million in the first quarter of 2025. The decrease was primarily due to higher share-based compensation expense of $19 million compared with $3 million in the same period last year, as well as increased rig reactivation costs. For additional information on share-based compensation, please refer to "Other Items" later in this news release.
Net earnings attributable to shareholders was $17 million or $1.34 per share compared to $35 million or $2.52 per share for the same period last year. The decrease was due to higher share-based compensation expense, as our share price appreciated 39% in the quarter, and increased depreciation expense from the change in useful life estimates.
Cash provided by operations was $63 million and the Company repurchased 36,874 shares for $4 million and reduced long-term debt by $25 million. Precision ended the quarter with $41 million of cash and more than $430 million in available liquidity.
In Canada, our operating margin(2) was $14,282 compared to $14,780 in the same period last year. The decrease was primarily due to rig mix, as we had proportionately fewer active Super Triples.
In the U.S., our operating margin was US$9,291 compared to US$9,589 in 2025. Excluding the impact of turnkey projects and idle but contracted rig revenue, our operating margin was US$9,287 in 2026 compared to US$8,360 in 2025. The increase was primarily due to fixed costs being spread over more activity days.
Internationally, we had revenue per utilization per day of US$51,596 compared to US$49,419 in the same period last year. The increase of 4% was primarily due to higher mobilization revenue. We realized revenue of US$32 million in the first quarter of 2026 compared to US$36 million in 2025 as higher revenue per utilization day was more than offset by lower activity following the expiration of a drilling contract in Kuwait.
Completion and Production Services revenue was $80 million, consistent with the first quarter of 2025. Adjusted EBITDA was $18 million, representing 22%(1) of revenue which is consistent with the first quarter of 2025.
General and administrative expenses were $42 million versus $30 million in the first quarter of 2025, with the increase primarily due to higher share-based compensation expense.
Capital expenditures were $65 million compared to $60 million in the first quarter of 2025 and included $35 million for the maintenance of existing assets, infrastructure, and intangible assets and $30 million for upgrades(1).
(1) See "FINANCIAL MEASURES AND RATIOS."(2) Defined as revenue per utilization day less operating costs per utilization day.
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 that we establish at the beginning of every year.
Precision's 2026 strategic priorities and the progress made during the first quarter are summarized below.
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.
Grew rig utilization in both Canada and the U.S. even though industry activity declined in each region.
Maintained strong pricing in Canada and the U.S. compared to the previous quarter and the first quarter of 2025.
Deployed $30 million in targeted fleet upgrades to meet evolving customer requirements and deliver efficient, high-performance drilling outcomes.
Maximize free cash flow through strategic capital deployment and sustained cost discipline.
Generated cash from operations of $63 million, allowing Precision to reduce debt and buy back shares.
Recorded resilient operating margins in Canada and the U.S. compared to the previous quarter and the first quarter of 2025.
Enhance shareholder returns by reducing debt by $100 million in 2026 and allocating up to 50% of free cash flow, before debt repayments, directly to shareholders.
Reduced debt by $25 million and continue to target a sustained Net Debt to Adjusted EBITDA ratio(1) of below 1.0 times.
Returned $4 million to shareholders by repurchasing 36,874 shares during the quarter.
Well positioned to meet our long-term debt reduction target of $700 million between 2022 and 2027. As of March 31, 2026, we have reduced our debt by $560 million since the beginning of 2022.
(1) See "FINANCIAL MEASURES AND RATIOS."
OUTLOOK
Ongoing geopolitical tensions in the Middle East have increased global supply risks, contributing to higher oil prices and a renewed focus on energy supply security. This environment continues to support steady upstream investment and near-term activity in politically stable jurisdictions. Customers continue to prioritize capital discipline and returns, resulting in measured but sustained drilling rather than reacting to short-term price movements. However, if the oil price outlook remains constructive, we expect activity levels to increase over the course of the year.
In Canada, demand for our Super Series rigs remains robust, driving one of our most active winter drilling seasons. Improving commodity prices for heavy oil and condensate, plus additional takeaway capacity for both oil and natural gas continue to support Canadian activity levels. As we move into spring break up with more pad-capable Super Triple and Super Single rigs and an improved oil price environment, we expect our second quarter activity to be well above the prior year's level.
In the U.S., the natural gas rig count increased approximately 20% in 2025 as customers became more constructive on LNG off-take and rising AI-related power demand. We capitalized on this trend by increasing activity in key natural gas basins such as the Haynesville and Marcellus, resulting in a 24% increase in U.S. drilling rig utilization days in the first quarter of 2026 compared with 2025. Oil directed drilling activity remained subdued through 2025 and into 2026; however, with a more favorable pricing environment, we are experiencing a notable increase in inquiries from both oil and natural gas customers regarding rig availability and expect further rig additions and pricing increases in the second half of the year.
Internationally, despite minor disruptions and increased costs due to the tension in the Middle East, our crews are safely delivering results for our international customers. We have seven active rigs, including four in Kuwait and three in the Kingdom of Saudi Arabia. These rigs are under five-year term contracts that extend into 2027 and 2028. We currently expect seven active rigs for the remainder of the year. We continue to seek opportunities for our two idle international rigs.
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 in the foreseeable future, assuming no significant change in market conditions.
Overall, our outlook for the remainder of the year is optimistic, with potential upside driven by sustained higher oil prices amid ongoing geopolitical tensions in the Middle East. In Canada, we expect second quarter operating margins to average between $12,000 and $13,000 per utilization day, driven by a higher proportion of Super Singles working through spring break up compared with the prior year. In the U.S., revenue per utilization day is expected to remain stable, while operating margins are anticipated to range between US$7,500 and US$8,500 per utilization day due to additional rig reactivation expenses.
Contracts
The following chart outlines the average number of drilling rigs under term contract by quarter as of April 29, 2026. For the quarter ending after March 31, 2026, 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 April 29, 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
21
17
17
16
18
U.S.
16
16
17
17
17
15
14
11
5
11
International
8
7
7
7
7
7
7
7
7
7
Total
44
41
40
45
43
43
38
35
28
36
SEGMENTED FINANCIAL RESULTS
Precision's operations are reported in two segments: Contract Drilling Services, which includes our drilling rigs, procurement and distribution of oilfield supplies, and the manufacture, sale and repair of drilling equipment; and Completion and Production Services, which includes our service rigs, oilfield equipment rental, and camp services.
SEGMENT REVIEW OF CONTRACT DRILLING SERVICES
For the three months ended March 31,
(Stated in thousands of Canadian dollars, except where noted)
2026
2025
% Change
Revenue
449,009
419,457
7.0
Expenses:
Operating
303,573
272,412
11.4
General and administrative
12,441
11,029
12.8
Adjusted EBITDA(1)
132,995
136,016
(2.2
)
Adjusted EBITDA as a percentage of revenue(1)
29.6
%
32.4
%
(1) See "FINANCIAL MEASURES AND RATIOS."
Canadian onshore drilling statistics:(1)
2026
2025
Precision
Industry(2)
Precision
Industry(2)
Average number of active land rigs for quarters ended:
March 31
79
199
74
