NorAm Drilling (NORAM) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose to $26.5 million, driven by 89.3% fleet utilization, with adjusted EBITDA of $6.0 million and net income after tax of $700,000, or $0.02 per share.

• Operating profit reached $1 million, reversing a prior quarter loss; net financial income was $83,000 due to a debt-free balance sheet.

• Ten of eleven rigs were contracted, with one rig stacked and marketed; all rigs focused in the Permian Basin.

• Backlog stood at $26.6 million as of November 13, 2024.

• Continued monthly dividend payments totaling $5.2 million in Q3, with 24 consecutive monthly distributions.

Financial highlights

• Q3 2024 revenue was $26.5 million, up from $24.9 million in Q2; adjusted EBITDA increased to $6.0 million from $4.8 million.

• Net profit after tax was $700,000, compared to a net loss of $277,000 in Q2.

• Operating profit for Q3 2024 was $1.0 million, compared to a loss of $153,000 in Q2.

• Cash and cash equivalents ended at $10.4 million, flat from the previous quarter.

• Payroll expenses increased due to higher reimbursables and some inflationary pressure on insurance premiums.

Outlook and guidance

• Permian and U.S. rig counts remain flat, expected to continue into 2025 due to WTI prices and E&P discipline.

• Natural gas price stability above $3 could catalyze increased rig demand; US election results may further boost demand.

• CapEx for 2025 expected in the $3–4 million range, similar to 2024.

• Dividend policy to continue, with excess liquidity used for working capital and reactivations.

• Shale oil production growth projected to slow due to lower well completions and active rig counts.