Ensign Energy Services (ESI) Q2 2026 earnings summary

Executive summary

• Achieved year-over-year improvements in revenue and adjusted EBITDA, driven by increased operating activity and record operational safety results, with growth across all geographic segments.

• Reactivated and upgraded rigs for new contracts, incurring some one-time expenses, with most upgrade costs funded by operators.

• Announced the acquisition of Citadel Drilling Ltd. for US$65 million, adding six active 2,000 hp rigs to the Permian fleet, expected to close imminently.

• Funds flow from operations grew 15% to $83.0 million in Q2 2026.

• Net loss attributable to common shareholders narrowed by 51% to $13.1 million in Q2 2026.

Financial highlights

• Q2 2026 revenue was $397.3 million, up 7% year-over-year; six-month revenue was $815.4 million, up 1%.

• Adjusted EBITDA for Q2 2026 was $85.8 million, a 6% increase year-over-year; six-month adjusted EBITDA was $180.7 million.

• Net loss attributable to common shareholders for Q2 2026 was $13.1 million, down from $26.4 million in Q2 2025.

• Interest expense decreased by 13% to $16.1 million due to lower debt and favorable FX.

• General and administration expense increased 8% in Q2 2026, mainly from annual wage increases.

Outlook and guidance

• Expectation of continued rig additions in the U.S., with a rig per month growth rate through year-end, excluding Citadel fleet.

• Forward guaranteed contract book expanded by 25%, with $1.4 billion in contracted revenue.

• Maintenance capital expenditure for 2026 set at $162 million; selective upgrade capital at $95.8 million, with $68.6 million customer funded.

• Debt reduction target for 2026 is approximately $60 million, with flexibility to adjust based on market conditions.

• Anticipate tightening supply of high-spec rigs and 5%-10% rate increases on contract rollovers.