PHX Energy Services (PHX) Planet MicroCap Showcase: Toronto 2026 summary

Business and market position

• Directional drilling contractor steers wells from vertical to horizontal; 2025 drilling volume was nearly 13 million m across operations.

• Roughly 75% of revenue comes from the U.S.; operations run 40–50 active jobs/day in Canada and 50–60 in the U.S., plus a small Middle East operation.

• Market share is ~10%–11% in the U.S. and ~22% in Canada; typically 100–110 active full-service jobs run daily.

• North American addressable market is ~800 active rigs, with ~600 in the U.S. and ~200 in Canada; six or seven providers compete in the tier 1 segment.

Technology and competitive positioning

• Rotary steerable tools can roughly double drilling speed versus conventional methods; day rates rise from ~CAD 15,000 to CAD 35,000–40,000, while customers benefit from lower rig time costs.

• Since rotary steerable technology arrived in North America ~8 years ago, a 3,000 m Montney well’s drilling time fell from 25 days to 12; complex Delaware Basin wells went from 40 days to 20 or fewer, sometimes 15.

• The business is the second-largest rotary steerable provider in North America; ~20% of rigs use the technology, with adoption expected to reach 30%–40% over the next few years.

• Fleet includes ~70 Schlumberger Orbit tools and ~60 Halliburton iCruise tools; both are licensed perpetually, with IP owned by the manufacturers.

• Differentiation centers on proprietary motor and MWD designs, tool reliability, continuous improvement, service quality and customer relationships; tier 1 competitors also offer rotary steerable technology.

Industry outlook

• U.S. rig count rose from 550 a year ago to 600; management expects 650 by this time in 2027, with higher oil prices and customer budgeting supporting a gradual increase.

• Canadian rig count could rise gradually to ~300 in five years, supported by expected pipeline and LNG growth and increased Western Canadian oil exports of 1–2 million barrels over the next 5–10 years.

• Four consecutive years of record revenue came as the total addressable market shrank 30%, with rotary steerable adoption cited as a key growth driver.

• Q3 results were expected the following week; management said higher WTI prices had strengthened U.S. customer finances and described Canadian market conditions as more optimistic.