[Management View]
Precision Drilling reported a year-over-year decline in adjusted EBITDA for Q3 2025, attributed to deferred Canadian projects and U.S. rig growth driven by gas basin strength. The company increased its 2025 capital expenditures by $20 million due to contracted customer upgrades, maintaining robust liquidity above $400 million. Strategic priorities focus on debt reduction, shareholder returns, and disciplined capital deployment amid market dependency and evolving technology demands.

[Outlook]
The company anticipates Q4 Canadian rig activity to match or slightly exceed the previous year's winter season, with operating margins expected between $14,000 and $15,000 per day. U.S. rig count is projected to average in the upper 30s, with margins between $8,000 and $9,000 per day. For 2025, depreciation and interest expenses remain unchanged, with a tax rate of 45%-50% due to U.S. deferred tax expenses. The company aims to maintain a net debt to EBITDA ratio below 1x and increase shareholder payout ratios.

[Financial Performance]
Precision Drilling's Q3 2025 adjusted EBITDA was $118 million, down from $142 million in the prior year. Canadian drilling activity averaged 63 rigs, a decrease from 72 in Q3 2023, while U.S. activity increased to 36 rigs from 33 in the previous quarter. International rig activity averaged 7 rigs, down from 8, with day rates rising 14% to $53,811. Completion and Production Services EBITDA was $19.3 million, slightly down from $19.7 million in Q3 2024.

[Q&A Highlights]
Question 1: When can we expect longer-term contracts to extend, especially with customer-funded upgrades?
Answer: Longer-term contracts are more prevalent in the Montney and Marcellus regions. The company is having constructive conversations for 2026, but contract commitments are yet to be finalized.

Question 2: What are the expectations for rig upgrades in 2026, and how will this impact CapEx and free cash flow?
Answer: The company hopes for more upgrades, as they offer significant financial returns. Upgrades are driven by customer demand for longer reach horizontals in the U.S. and pad configurations in Canada.

Question 3: Are there any strategic changes expected under the new CEO?
Answer: The strategy remains focused on cost control, capital allocation, and customer performance. The company aims to enhance field operations support and customer performance proof.

Question 4: What is the impact of mobilization or activation costs on margin guidance?
Answer: In Canada, mobilization costs are minimal, while in the U.S., a constant run rate is expected due to contract churn.

Question 5: How does the company view M&A and performance-based contracts?
Answer: No strategic M&A is planned, but organic growth is prioritized. Performance-based contracts are increasingly prevalent and beneficial.

Question 6: What is the rationale behind moving rigs from the U.S. to Canada?
Answer: A unique five-rig contract in Canada justified the move, with expectations of 100% utilization of super triples this winter.

Question 7: What are the expectations for U.S. gas drilling activity?
Answer: The Marcellus is expected to have steady to low growth, while the Haynesville could see higher activity if gas prices support it.

[Sentiment Analysis]
Analysts expressed optimism about the company's strategic focus and leadership transition. Management maintained a confident tone, emphasizing strategic priorities and customer alignment.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 |
|-------------------------------|---------|---------|
| Adjusted EBITDA | $118M | $142M |
| Canadian Drilling Activity | 63 rigs | 72 rigs |
| U.S. Drilling Activity | 36 rigs | 33 rigs |
| International Rig Activity | 7 rigs | 8 rigs |
| CMP EBITDA | $19.3M | $19.7M |

[Risks and Concerns]
The company faces risks related to commodity price dependency and limited contract visibility for 2026. The potential for increased competition and market volatility in oil basins could impact future performance.

[Final Takeaway]
Precision Drilling is strategically positioned for growth, leveraging its scale and technology to meet customer demands. The company's focus on debt reduction, shareholder returns, and disciplined capital deployment underscores its commitment to long-term success. With a strong leadership team and robust market positioning, Precision Drilling is well-prepared to navigate industry challenges and capitalize on emerging opportunities.