NorAm Drilling (NORAM) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $23.9 million, down from $24.9 million in Q2, with 80.2% rig utilization and adjusted EBITDA of $4.3 million.

• Net profit after tax rose to $4.0 million from $3.7 million in Q2, aided by a negative income tax expense; EPS was $0.09.

• Nine of eleven rigs were under contract at quarter end, with one stacked rig contracted to start in December.

• Paid $4.1 million in dividends during Q3, with ongoing monthly distributions and a total of $86 million returned since listing.

• Maintained a debt-free balance sheet, ending the quarter with $9.4 million in cash and $4.5 million undrawn RCF.

Financial highlights

• Revenue decreased to $23.9 million from $24.9 million in Q2, reflecting lower utilization.

• Adjusted EBITDA fell to $4.3 million from $5.3 million in Q2, impacted by lower revenue and higher repair costs.

• Operating profit was $2.8 million, down from $3.8 million in Q2.

• Net profit for Q3 was $4.0 million, up from $0.7 million in Q3 2024.

• Net cash flow from operations for the nine months ended September 30, 2025, was $16.7 million.

Outlook and guidance

• Permian rig counts stabilized at 253, with flat activity expected as E&Ps finalize 2026 CapEx plans.

• Modest increases in rig counts possible if WTI prices rise or natural gas prices strengthen.

• Near-term environment expected to remain steady, with underperforming rigs likely to be displaced by higher-performing rigs.

• One stacked rig contracted to start in December; leads exist for the remaining stacked rig, but new contracts likely in early 2026.

• Longer-term optimism for super spec rigs in the Permian Basin as US shale oil production levels likely peaked.