Precision Drilling Announces 2026 Third Quarter Unaudited Financial Statements
CALGARY, Alberta, Oct. 27, 2026 (GLOBE NEWSWIRE) -- This news release contains “forward-looking information and statements” within the meaning of applicable securities laws. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the “Cautionary Statement Regarding Forward-Looking Information and Statements” later in this news release. This news release contains references to certain Financial Measures and Ratios, including Adjusted EBITDA (earnings before income taxes, (gain) loss on investments and other assets, finance charges, foreign exchange, gain on asset disposals and depreciation and amortization), Net Capital Spending, Working Capital and Total Long-Term Financial Liabilities. These terms do not have standardized meanings prescribed under International Financial Reporting Standards (IFRS) Accounting Standards and may not be comparable to similar measures used by other companies. See “Financial Measures and Ratios” later in this news release.
Precision Drilling Corporation ("Precision" or the "Company") (TSX:PD; NYSE:PDS) announces its 2026 third quarter results, highlighted by revenue, Adjusted EBITDA and net earnings growth driven by higher activity in Canada and the U.S., with U.S. margins expected to inflect higher in the fourth quarter.
Financial Highlights
Operational Highlights
(1) See "FINANCIAL MEASURES AND RATIOS."
(2) See "SEGMENT REVIEW OF CONTRACT DRILLING SERVICES."
MANAGEMENT COMMENTARY
Precision’s President and CEO, Carey Ford, provided the following commentary:
“Precision delivered another quarter of solid operational and financial execution, highlighted by year-over-year growth in revenue, Adjusted EBITDA, and net earnings, robust activity in Canada, and continued improvement in U.S. rig activity and day rates. We are delivering on what we set out to accomplish in 2026: growing revenue and deepening customer relationships, generating free cash flow, and returning capital to shareholders.
"During the third quarter, our drilling rig utilization increased 16% in Canada and 19% in the U.S. compared with the prior year, outpacing industry activity in both markets. In Canada, our unique positioning in heavy oil basins drove our outperformance, while in the U.S., we further strengthened our customer base, increased day rates, and reactivated six rigs to meet growing customer demand. We continue to invest selectively in our fleet and expect to complete upgrades to 25 rigs across Canada and the U.S. this year, enhancing our competitive position in core markets and supporting future growth.
"Our cash flow generation continues to support a balanced approach to capital allocation. During the quarter, we generated $71 million of cash from operations, invested $24 million into fleet upgrades, and returned $31 million to shareholders through share repurchases. Year to date, we have repurchased $47 million of shares while reducing debt by $75 million. With our long-term leverage target within reach, we expect to enter 2027 with greater flexibility to direct free cash flow toward direct shareholder returns.
"Looking ahead to 2027, we believe we are very well positioned to sustain momentum established this year, with our growing North American contract book further strengthening our outlook. In Canada, robust customer demand is positioning us for one of our busiest winter drilling seasons in years, with our Super Triple and Super Single rigs expected to be near full utilization. In Completion and Production Services, favorable producer economics, our differentiated service model and expanding drilling and service rentals businesses are expected to support continued growth and improved profitability.
"In the U.S., our strategy is delivering results. With the majority of our planned rig reactivations behind us, we expect U.S. operating margins to increase approximately 30% during the fourth quarter of 2026, establishing a stronger foundation for 2027. Our focus remains on aligning with customers who value Precision’s high-performance assets, technology, safety and operational execution. This growth is strategic, strengthening our business and creating sustainable value for shareholders.
"Internationally, our seven active rigs are supported by long-term contracts, providing a stable base of activity and cash flow. We expect our idle rig in Kuwait to return to work in mid-2027 under a five-year contract, following planned recertifications and upgrades. While geopolitical uncertainty and elevated regional costs remain important considerations, our teams continue to execute safely and reliably for customers.
"As we move through the final quarter of 2026, we are encouraged by the momentum across our business and the progress we have made toward our strategic priorities. While commodity price volatility and geopolitical uncertainty remain, we are entering 2027 with a stronger U.S. business, high utilization across our core Canadian fleet, stable international operations and continued growth in Completion and Production Services, providing a unique platform for generating free cash flow and delivering long-term value for shareholders.
“Finally, I want to thank our employees for their dedication and our shareholders for their continued support. I would also like to recognize Veronica Foley, our Chief Legal and Compliance Officer, for her years of dedicated service and many contributions to Precision. On behalf of everyone at Precision, I thank Veronica and wish her every success in the next chapter of her career,” concluded Mr. Ford.
SELECT FINANCIAL AND OPERATING INFORMATION
Financial Highlights
(1) See "FINANCIAL MEASURES AND RATIOS."
Operating Highlights
Drilling Activity
(1) Average number of drilling rigs working or moving.
Financial Position
(1) See "FINANCIAL MEASURES AND RATIOS."
Summary for the three months ended September 30, 2026:
(1) Defined as revenue per utilization day less operating costs per utilization day.
(2) See "FINANCIAL MEASURES AND RATIOS."
Summary for the nine months ended September 30, 2026:
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 third quarter are summarized below.
(1) See "FINANCIAL MEASURES AND RATIOS."
OUTLOOK
Ongoing geopolitical uncertainty and relatively tight global crude oil inventories have reinforced the importance of secure and reliable energy supply, supporting constructive oil prices and customer investment confidence. While customers remain focused on capital discipline and financial returns, we continue to see sustained demand for high-performance drilling rigs and well service equipment. Assuming commodity prices remain supportive and market conditions do not materially change, we expect North American drilling and completion activity to remain resilient and broadly consistent with current levels through the remainder of the year with growth potential emerging early in 2027.
In Canada, favorable heavy oil and condensate prices continue to support producer economics and steady upstream investment across oil and natural gas formations. Demand for our Super Series rigs remains robust, and we expect near full utilization of this rig class during the winter drilling season.
In the U.S., oil-directed drilling activity has continued to strengthen, with the oil rig count increasing since May and industry expectations pointing to further growth over the next 12 months. We have increased our oil-weighted activity while maintaining a strong position in key natural gas basins, including the Haynesville and Marcellus. We see opportunities for incremental activity as market conditions improve, while remaining focused on deepening customer relationships and strengthening margins.
Internationally, our crews continue to safely deliver services to our customers despite minor activity disruptions and incremental costs related to the Middle East tensions. We have seven active rigs, including four in Kuwait and three in the Kingdom of Saudi Arabia, all under five-year term contracts extending into 2027 and 2028. We expect our idle rig in Kuwait to return to work in mid-2027 under a five-year contract, following planned recertifications and upgrades. Crew-related operating costs are expected to remain elevated while regional tensions persist. We continue to pursue opportunities for our one idle international rig.
As Canada's premier well service provider, we remain optimistic about the long-term outlook for our Completion and Production Services business. We expect demand to remain strong through early 2027, supported by favorable commodity prices and egress capacity, as producers continue to focus on cash flow generation. Our High Performance, High Value service offering continues to support customer demand. Our growing drilling and service rentals businesses are delivering incremental year-over-year revenue and profitable growth, while strengthening our differentiated, full-service offering to customers. We see opportunities for continued growth in this part of the business.
Overall, our outlook for the remainder of the year and into 2027 remains constructive. For the fourth quarter, our operating margins in Canada are expected to remain consistent to our reported margins in the fourth quarter of 2025, averaging between $13,500 and $14,500 per utilization day. In the U.S., we expect a step change in operating margins as the pace of our rig reactivations slows, with operating margins averaging between US$9,500 and US$10,500 per utilization day.
We remain committed to shareholder returns and expect to achieve our $100 million debt repayment target for the year while continuing to actively repurchase shares in the fourth quarter, building on the $47 million of buybacks completed to date.
Contracts
The following chart outlines the average number of drilling rigs under term contract by quarter as of October 27, 2026. For the quarter ending after September 30, 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.
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
(1) See "FINANCIAL MEASURES AND RATIOS."
(1) Canadian operations only.
(2) Source: Baker Hughes rig counts.
(1) United States lower 48 operations only.
(2) Source: Baker Hughes rig counts.
SEGMENT REVIEW OF COMPLETION AND PRODUCTION SERVICES
(1) See "FINANCIAL MEASURES AND RATIOS."
OTHER ITEMS
Share-based Incentive Compensation Plans
We have several cash and equity-settled share-based incentive plans for non-management directors, officers, and other eligible employees. Our accounting policies for each share-based incentive plan can be found in our 2025 Annual Report.
A summary of expense amounts under these plans during the reporting periods are as follows:
Contingencies
In the 2018 to 2023 tax years, Precision deducted certain intercompany dividends received in connection with a preferred share financing. In late July 2026, Precision received a Notice of Reassessment (NOR) from the Canada Revenue Agency (CRA) relating to its 2018 tax year, denying the deduction of such intercompany dividends. In addition to the 2018 NOR, Precision received a proposal from the CRA for the 2019 to 2022 tax years on the same basis, but no reassessments have been received at this time.
Precision will file a Notice of Objection to the 2018 NOR and intends to vigorously contest the 2018 NOR as well as any additional reassessments that may be issued by the CRA in respect of the intercompany dividends received. The Company and its tax advisors reaffirm that the Company’s tax filing position is appropriate. As such, Precision has not recognized a liability in its unaudited interim consolidated financial statements with respect to the reassessment.
Due to existing tax pools, the CRA’s reassessment of the 2018 tax year and anticipated reassessments of the 2019 to 2023 tax years are not expected to impact taxes payable until the 2024 to 2027 tax years. Additional notices of reassessment for the subsequent tax years are expected to be issued over the next 24 months. If it is ultimately determined that the Company is not entitled to deduct the intercompany dividends, we estimate a maximum tax liability of approximately $155 million, excluding interest.
Once reassessments are issued, Precision will be required to pay 50% of the assessed tax liability and interest, until the issue has been resolved. If Precision is ultimately successful in defending its position, then any taxes and interest paid to the CRA will be refunded plus interest, and if the CRA is successful then any remaining taxes and interest payable will have to be remitted by Precision.
Depreciation
In 2025, we reviewed our drilling rig equipment and revised the estimated useful life of drill pipe, effective January 1, 2026, as more complex drilling programs have reduced the useful life of this asset class. This revision resulted in additional depreciation expense of $8 million in the third quarter of 2026 and $30 million year to date.
FINANCIAL MEASURES AND RATIOS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
Certain statements contained in this news release, including statements that contain words such as "could", "should", "can", "anticipate", "estimate", "intend", "plan", "expect", "believe", "will", "may", "continue", "project", "potential" and similar expressions and statements relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking information and statements").
In particular, forward-looking information and statements include, but are not limited to, the following:
These forward-looking information and statements are based on certain assumptions and analysis made by Precision in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These include, among other things:
Undue reliance should not be placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to:
Readers are cautioned that the foregoing list of risk factors is not exhaustive. Additional information on these and other factors that could affect our business, operations or financial results is included in reports on file with applicable securities regulatory authorities, including but not limited to Precision’s Annual Information Form for the year ended December 31, 2025, which may be accessed on Precision’s SEDAR+ profile at or under Precision’s EDGAR profile. The forward-looking information and statements contained in this news release are made as of the date hereof and Precision undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS) (UNAUDITED)
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
2026 THIRD QUARTER RESULTS CONFERENCE CALL AND WEBCAST
Precision Drilling Corporation has scheduled a conference call and webcast to begin at 11:00 a.m. MT (1:00 p.m. ET) on Wednesday, October 28, 2026.
To participate in the conference call please register at the URL link below. Once registered, you will receive a dial-in number and a unique PIN, which will allow you to ask questions.
https://register-conf.media-server.com/register/BI27fd4ada3a914d5282393d8c375188ec
The call will also be webcast and can be accessed through the link below. A replay of the webcast call will be available on Precision's website until the following quarterly conference call is posted.
https://edge.media-server.com/mmc/p/x59h75bk
About Precision
Precision is a leading provider of safe and environmentally responsible High Performance, High Value services to the energy industry, offering customers access to an extensive fleet of Super Series drilling rigs. Precision has commercialized an industry-leading digital technology portfolio known as Alpha™ that utilizes advanced automation software and analytics to generate efficient, predictable, and repeatable results for energy customers. Our drilling services are enhanced by our EverGreen™ suite of environmental solutions, which bolsters our commitment to reducing the environmental impact of our operations. Additionally, Precision offers well service rigs, camps and rental equipment, all backed by a comprehensive mix of technical support services and skilled, experienced personnel.
Precision is headquartered in Calgary, Alberta, Canada and is listed on the Toronto Stock Exchange under the trading symbol “PD” and on the New York Stock Exchange and NYSE Texas, Inc., under the trading symbol “PDS”.
Additional Information
For further information, please contact:
Lavonne Zdunich, CPA, CA
Vice President, Investor Relations
403.716.4500
800, 525 - 8th Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
Website: www.precisiondrilling.com