NorAm Drilling (NORAM) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue reached $26.6 million, up slightly from $26.5 million in Q3, with utilization improving to 90.6% and adjusted EBITDA at $6.6 million.

• Maintained a fleet of 11 ultra-super-spec rigs, 10 contracted in the Permian and one stacked, with high drilling efficiency and minimal investment needs.

• Distributed $5.1 million in dividends during Q4 and $72.5 million since listing, exceeding private placement proceeds.

• Remained debt-free with a full payout strategy and strong cash returns to shareholders.

• Backlog stood at $30.3 million as of February 19, 2025, supported by contract renewals at stable or higher day rates.

Financial highlights

• Operating profit increased to $1.6 million in Q4 2024 from $1 million in Q3.

• Net profit after tax was $19,000 in Q4, down from $700,000 in Q3 due to tax expense.

• Net cash flow from operations was $4.1 million in Q4, with cash and equivalents declining by $2 million due to higher capex and working capital.

• Total equity at quarter-end was $58.7 million, with an equity to asset ratio of 74.7%.

• Capital expenditures were $1 million in Q4 and $3.4 million for the year.

Outlook and guidance

• Expect rig counts in the Permian and U.S. to remain flat in early 2025 due to WTI prices, E&P discipline, and flat to slightly down EMP budgets.

• Anticipate potential rig additions in natural gas basins in H1 2025 if gas prices remain above $3.

• 2025 capex guidance is $4 million, with no significant upgrades planned.

• Operating expenses expected to remain stable, with minor increases possible from insurance costs.

• Intention to continue monthly cash distributions, with excess earnings paid out.