Ensign Energy Services (ESI) Q2 2026 earnings summary

Executive summary

• Achieved a busy quarter with rig reactivations and upgrades, incurring some one-time expenses, mostly operator-funded.

• Revenue for Q2 2026 rose 7% year-over-year to $397.3 million, with growth across all geographic segments.

• Adjusted EBITDA increased 6% to $85.8 million, while net loss attributable to common shareholders narrowed by 51% to $13.1 million.

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

• Continued debt reduction and interest expense improvements, with record operational safety results.

Financial highlights

• Q2 2026 revenue: $397.3 million (up 7% year-over-year); six-month revenue: $815.4 million (up 1%).

• Adjusted EBITDA for Q2 2026: $85.8 million (up 6% year-over-year); six-month Adjusted EBITDA: $180.7 million.

• Net loss attributable to common shareholders for Q2 2026: $13.1 million, down 51% year-over-year.

• Depreciation expense for the first six months was $172.7 million, up 5% year-over-year.

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

Outlook and guidance

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

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

• Anticipate contract rates to rise 5%-10% on rollovers due to tightening supply of high-spec rigs.

• Industry outlook is volatile due to geopolitical tensions and supply shocks, but Canadian activity is expected to improve in H2 2026.

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