Ensign Energy Services (ESI) Q4 2024 earnings summary

Executive summary

• Achieved $220 million in debt reduction and generated $450.1 million in EBITDA for 2024, with revenue of $1.68 billion, down 6% year-over-year.

• Net loss attributable to common shareholders was $20.8 million, compared to net income of $41.2 million in 2023.

• Canadian operations improved due to the Trans Mountain Pipeline expansion, while U.S. operations were impacted by M&A activity and low natural gas prices.

• Upgraded 20 rigs with operator funding and expanded digital drilling solutions by 25% year-over-year.

• Ended the year with the second-best safety performance in company history.

Financial highlights

• Q4 2024 revenue was $426.5 million, down 1% year-over-year; full-year revenue was $1.68 billion, down 6%.

• Adjusted EBITDA for 2024 was $450.1 million, down 8% from $490.2 million in 2023.

• Interest expense decreased by 23% year-over-year due to lower debt and reduced rates.

• Net capital expenditures for 2024 totaled $147.6 million, primarily for maintenance.

• Working capital deficit at year-end was $100.9 million, compared to a surplus of $15.8 million in 2023.

Outlook and guidance

• 2025 maintenance capex budgeted at $164 million, with $8 million for selective growth and customer-funded capital.

• Debt reduction target for 2025 is $200 million, aiming for $600 million total reduction from 2023 to 2025.

• Expecting steady rig activity: 100-110 drilling rigs and 50-60 well-servicing rigs daily.

• Canadian activity expected to increase in Q1 2025, but may be impacted by trade tariffs.

• International activity expected to rebound in Q1 2025, especially in Oman and Australia.