Ensign Energy Services Inc. reported a 9% decrease in Q2 2024 revenue to $391.8 million and a net loss of $4.5 million. Despite the revenue decline, the company made significant debt reductions and is on track to achieve its long-term debt reduction goals. Increased drilling activity in Canada is expected to offset challenges in the U.S. market.
Ensign Energy Services Inc. reported their financial and operational results for the second quarter of 2024. Here are the key highlights:
Financial Highlights (in thousands of Canadian dollars):
- Revenue: $391.8 million, down 9% from $432.8 million in Q2 2023.
- Adjusted EBITDA: $100.2 million, a 14% decrease from $116.6 million in Q2 2023.
- Net Loss: $4.5 million, compared to a net income of $10.3 million in Q2 2023.
- Cash from Operating Activities: $126.4 million, down 24% from $166.8 million.
- Total Debt: Reduced by $70.7 million since December 31, 2023.
Revenue by Geographic Area:
- Canada: $93.4 million (24% of total revenue), up 16% from $80.6 million.
- United States: $208.6 million (53% of total revenue), down 25% from $276.8 million.
- International: $89.8 million (23% of total revenue), up 19% from $75.4 million.
Operational Highlights:
- Drilling Rigs:
- Canada: 2,451 operating days, up 15% from 2,131 days.
- United States: 2,912 operating days, down 32% from 4,302 days.
- International: 1,255 operating days, a 1% increase from 1,247 days.
- Well Servicing:
- Canada: 12,027 operating hours, up 2% from 11,804 hours.
- United States: 35,312 operating hours, up 15% from 30,647 hours.
- Capital Expenditures:
- Upgrade/Growth: $2.4 million, down 37% from $3.8 million.
- Maintenance: $46.1 million, down 13% from $52.7 million.
Financial Position:
- Working Capital Deficit: $11.5 million, compared to a surplus of $15.8 million as of December 31, 2023.
- Cash: $25.2 million.
- Total Debt: $1.119 billion, down from $1.278 billion a year ago.
Outlook:
- Industry Overview: The outlook remains generally constructive with steady global demand for crude oil, although short-term challenges persist due to geopolitical tensions and economic conditions.
- Canadian Activity: Expected to increase in Q3 2024 due to additional pipeline capacity and positive market conditions.
- United States Activity: Expected to remain muted in Q3 2024 due to recent customer M&A activity and depressed natural gas prices.
- International Activity: Expected to remain stable with some minor fluctuations in rig activity in specific regions.
Ensign Energy continues to focus on disciplined capital allocation and debt reduction, targeting approximately $200 million in debt reduction for 2024 and a total of $600 million by the end of 2025. The company also plans gross capital expenditures of around $147 million for 2024, primarily for maintenance and selective growth projects.
