Ensign Energy Services (TSE:ESI) reported a 17% increase in third-quarter revenue and adjusted EBITDA as drilling activity rose across its operating regions and its acquisition of Citadel Drilling added rigs in the U.S. Permian Basin.
Revenue for the quarter reached CAD 481.7 million, up from CAD 411.2 million a year earlier, Chief Financial Officer Trevor Russell said on the company’s November 6 earnings call. Adjusted EBITDA rose to CAD 115 million from CAD 98.6 million.
President and Chief Operating Officer Bob Geddes said Ensign had CAD 1.6 billion in contracted forward revenue. He also pointed to opportunities to increase drilling rates as the supply of readily available high-specification rigs tightens.
Acquisition Adds Permian Rigs
Ensign completed its acquisition of Citadel Drilling and its managed pressure drilling business in mid-August for total consideration of CAD 81.9 million. The deal added six fully contracted high-specification drilling rigs and 28 managed pressure drilling units, Russell and Geddes said.
Geddes said five of the acquired rigs were working in the U.S. Southern business unit, while the sixth was temporarily down for scheduled recertification. Of the acquired managed pressure drilling units, 23 were active at the time of the call.
Including the acquisition, Ensign had 51 active U.S. drilling rigs and a 9% share of the Permian market, Geddes said. He expected U.S. activity to grow toward roughly 55 rigs by mid-2027, with potentially one additional rig working before the end of 2026.
Geddes said Ensign had been able to increase U.S. bid rates by roughly $1,000 per day each quarter over the preceding six months. He expected leading-edge pricing to be about $4,000 per day higher at the end of 2027 than at the start of that year, although he characterized that as his outlook rather than a committed increase.
Activity Rises Across Regions
Third-quarter operating days increased 16% year over year in the United States to 3,721, rose 8% in Canada to 3,790 and climbed 19% internationally to 1,013, Russell said.
For the first nine months of 2026, revenue rose 6% to CAD 1.3 billion, while adjusted EBITDA increased 5% to CAD 295.7 million. Russell attributed the improvement in adjusted EBITDA primarily to higher activity, including additional operating days from the Citadel acquisition.
In Canada, Geddes said Ensign expects to reach a peak of more than 60 active drilling rigs in the first quarter of 2027. The company is seeking rate increases of roughly 5% to 10% as it prices work for the winter season, depending on the rig type and location.
Additional rigs coming out of storage generally require CAD 3 million to CAD 5 million to reactivate and recertify, Geddes said. Ensign seeks either customer funding for that work or higher rates designed to recover its investment within a year.
Demand could also shift toward high-specification doubles when suitable singles are unavailable, Geddes said. He noted that doubles generally take slightly longer to move and that there is more available capacity in that segment.
Venezuela Expansion and Debt Plans
Geddes described Venezuela as Ensign’s largest international growth opportunity. The company had two rigs active there at the time of the call, with a third expected to begin work the following week. He said Ensign had five rigs contracted and expected to have all five working by the following summer.
Ensign’s longer-term goal is to build a 15-rig operation in Venezuela over the next few years. Geddes said additional rigs beyond the near-term group remain under discussion with operators and could require capital of approximately $10 million to $15 million each. The company is working with customers to provide that capital, he said, while considering geopolitical risks.
On its balance sheet, Ensign reduced its 2026 debt-reduction target to CAD 50 million from CAD 60 million, citing the Citadel acquisition and reinvestment in capital projects. Russell said Ensign drew CAD 68.7 million of debt during the third quarter and had a net CAD 31.7 million drawn over the first nine months of the year.
Russell said the company expected fourth-quarter adjusted EBITDA to follow a similar trend to the third quarter, with lower planned capital spending. He said operating funds flow, a completed property sale and customer-funded projects were expected to support renewed debt repayment.
About Ensign Energy Services (TSE:ESI)
Ensign is a global leader in oilfield services, headquartered out of Calgary, Alberta, operating in Canada, the United States and internationally. We are one of the world’s top land-based drilling and well servicing contractors serving crude oil, natural gas, and geothermal operators. Our premium services include contract drilling, directional drilling, underbalanced and managed pressure drilling, rental equipment and well servicing. Please visit our website at www.ensignenergy.com.
