Precision Drilling (PDS) 21 Oct 212021 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Precision Drilling Corporation 2021 Third Quarter Results Conference Call. [Operator Instructions]. I would now like to hand the conference over to Carey Ford, Senior Vice President, Chief Financial Officer. Please go ahead.

good and Amanda, you, afternoon. Thank Drilling's Welcome and Earnings Call Quarter to Precision Webcast. Conference Third me Neveu, Participating Executive is today with Kevin Officer. President Chief and this Precision press results quarter morning. earlier reported through third release a in Please these unless financial are note, Canadian results otherwise dollars indicated. our note statements and refer forward-looking to today please to risks future Precision's results measures Also, which comments will a are of financial subject and will uncertainties. of some include regarding non-IFRS and prospects, number on regulatory see forward-looking financial our information news for Please measures, other and filings factors. and risk statements more release to outlook Prior financial and I will Kevin quarter third update, providing an operational review results. our third and increasing North largely Precision's American pricing in characterized increases market U.S. spot results quarter temporary were activity, by improved ahead stronger operating of activity QX a outlook. QX costs and

our share-based accrual, of million. share-based Our second we based treatment to quarter in strong EBITDA shares adjusted accounting for adjusted compensation planned where performance EBITDA the $XX benefit a expense or cash-settled expense vesting Absent quarter. quarter accrual and each on $XX compensation of million. and this have included an $XX accounting been would Precision of from The market resulted continued accrual [indiscernible] million accrue

on our share volatility financial calls, equity vesting. portion a present in cash the XXXX cash awards either price we in in treatment or results. upon ability higher and volatility mind keep pay to conference may Please that noted the As have of these

believe And million. with the CEWS million the During payments. $XX of CEWS is we impact approximately the $X largely quarter, we for XXXX received program assistance complete Precision of

USD a turnkey, USD from Absent QX. X,XXX been the increase from X,XXX for QX, Daily decrease QX. of from than have margins of Precision rigs daily impacts the averaged X,XXX, activity USD were would XX an Moving in and to operating quarter lower margins IBC operating in U.S. X Drilling QX. rigs

higher repair to the XXX, rig we and that contract. were be costs a we from able rig and costs quarter, experienced a during higher close expense we achieve of -- mobilization increases experienced resulting to will USD in Although pricing higher recouped maintenance

we they have been rigs quarter, activation the months. and prepared for During X idled XX for on average

the Our than but majority are in revenue increase and were quarter is the costs building U.S. next we operating taken actions base temporary believe cost the a X QX for expected, the of for quarters. larger the higher

higher For normalized QX, be we expect to X,XXX than X,XXX USD USD to QX. margins

year. the a to the tripling XXXX for activity QX nearly XXXX, Precision an decrease XX of a Daily and Drilling to Moving averaged rig $X,XXX rigs, of increase XX from due of $X,XXX, rigs quarter representing were margins in QX count. Canada. operating from rig primarily $XXX or had margins and mix higher of the shallower lower would higher working impact, this as consistent which last XXXX, with the QX than we is last have percentage guidance provided a slightly than Absent rigs been QX much Q's quarter. year $X,XXX

we per QX of day absent year, QX, up Qs recoveries compared $X,XXX a and margins onetime this be expect higher last QX day For higher and $X,XXX than to year. to to $XXX

were $X,XXX. recoveries margins XXXX, onetime For absent Qs reference, operating daily QX and in

in year to in abandonment increased by rig quarter drill availability our we year, plug-in prior high-torque more rigs. up and Well hours. international $X.X for inventory and focusing where primarily activity the in Well to has X segment, from a day positively acted X,XXX on spending quarter. due current were down operating generated International approximately to moves. The to during expenditures orders to Moving in rapidly from tightening our due an operations. USD at purchase full EBITDA the were increase Adjusted vendor on XXXX drill is million, revenue Drilling million to represented Precision appeared $XX in on this customers the approximately abandoned increase producing XXX% Capital the pipe $X.X rates C&P a average In opportunity USD and XX,XXX, year compared impacted quarter EBITDA as million, was quarter increases hours steel quarter guidance prior at largely capital wells XX% work. adjusted for planned our pipe was work the of $XX Service ensuring price quarter be million. to the market. secured of significant beginning advanced discount, mitigating the averaged

$XX as for sustaining investments capital contracted anticipated XXXX for relates of comprised technologies expansion, as is our upgrades. Our and well customer million and upgrade and plan million to supporting $XX infrastructure which Alpha

XX, contracts average an October for for the XXXX. we the contracts XX third As average had year in of XX and hand of an of quarter full

position of September and approximately XX, credit. $X.X cash total was liquidity of excluding long-term letters net million, our debt billion of $XXX approximately our was As position

covenants ratio Our net debt approximately our of compliance to in the quarter second an XX-month cost We average is in with third debt and to our ratio approximately facility with all trailing EBITDA is the EBITDA interest quarter of coverage Xx and remain Xx. credit X.X%.

year-to-date During the $XX million the by payments debt debt million $XXX year. quarter to reduction fourth the achieve goal and we million, make reduced and during is quarter, debt we of to for reduction $X million our total $XXX debt expect to

reduction, since weighted already target and meet XXXX, million XXXX debt $XXX we of Our or to $XXX on we substantially debt allocation of the to reduced reduction and between beginning remain million capital XXXX. by long-term exceed program where our remains track debt have

the interest in continue business further expect higher flow due $X to operations generating improved only positioned quarter, is fourth activity, quarter cash to We the deleveraging. of support pricing and with through and well in free the million cash

and G&A far the G&A on depreciation respectively. focus compensation despite $XX by and million, year our note, before our strict For guidance remains expectations Of for control represented beginning our expense of our $XXX the share-based is realized throughout exceeding XXXX, cost activity at guidance XXXX. million consistent

paydown move to year into we debt it cash run interest expect next than less million, lower rate as $XX Our expense is and continues.

be operating leverage our to final and on rate remain through We followed leverage, One note torc the taxes understand inherent the space effective below who drilling tax the low in business. operating land cycles those XX%. have and expect cash to

With have passed, since market like globally lean today's would margins years margin in highlight our scalable at increase I where across cost activity structure. today, illustration will that, turn Kevin. both million now activity to results a over to growing, several next and to our fixed approximately over the fleet we were several XXX of $X,XXX expected financial running and demonstrate on annualized using we leverage experienced activity an have daily $XX call and should an continued through increase operating to rig As basis. per pricing result the rigs With and the look momentum, EBITDA operational increased Precision's I quarters. With in

afternoon. good and Carey, you, Thank

time the for as in cycle, all, unusual territory, indeed. believe we where I fact, over all a trending and backdrop we beyond. is Virtually this monitor strong the develop resilient a commodity decade, key and XXXX lines up indicators While leading first Precision's in budgeting outlook the E&P annual favorably with are

producers. the and Underlying the the and OPEC reduction Plus spot by these significant with activity the key traded fundamentals the of we is commodity energy prices. gas very capital by the strip drilling future rebounding, Following during strong supply publicly demand oil oil gas are discipline pandemic and now firmly industry encouraged demonstrated and discipline and

to the has and expected complete. more industry industry be for and oil our be over months sustainable strong, cash-generating shortly capabilities than the will gas We lead and investors mantra The sheet needed balance and longer a continue much of capital Canadian continue term. it to of just or repair a we saw, ago. key of result this Looking core completed U.S. customers. be work, to And the will few at Much even the focus strategic of our discipline our producers healthier markets. stronger and was expect the been believe will balanced returns the will shareholder the

provide increase inventory of direct the any bit On the term, is back alone let indicator for key demand. the operators spending current to U.S. production sustain the wells a focus will closely. shift to the near levels, and in just we in watch need Undoubtedly, drill uncompleted to dwindling

following of growth profile, fast shales important digital as a industrialized capital capital. and by features many techniques, approach disciplined and to of a it's We capital-efficient, infrastructure may the coupling and the and oil producer. the have been producer, as Every structured at a industry of one the you sources production. shale The include shales industry efficient the while structured still short-cycle around a incremental completion role fastest play responding an rapid to Now perspective, gas swing costs structure swing the and decision-making, well-managed industry deployment scale domestic look capability, aspect logistics of written has that analytics functionally believe optimization. lower drilling be return now off to when from shale

be while becoming net the remain few some Now energy energy clearer for straight is supply the over to past the will will a now global transition that energy chain that the hydrocarbons not line available element zero, a underway, critical reliable stable and global and it's for from to the months path time come.

rig utilizing will dynamically our power addressing the a responding urgently our expanding than most Two highlighted GSG to energy firms a Precision financial performance. battery community transition. GSG lower our environmental a offerings start, And enhance out Precision, energy producer We the performance for employee engagement extreme internal EverGreen gas take system customer engines and at creation deployed and the first reduce emissions environmental and our while launch the are This efficiency, reducing for requires focused is may to difficult costs year. industry off X emissions and quarter. and as our fuel and engagement. system. business be continuing ways Precision. At every emissions of our to maintenance are during satisfy we and most to it natural our EverGreen branded s-team Importantly, teams, Solutions will quick diesel service the virtually drive designed system system emissions impacts, as led while views, of a initiative by setting our drilling safety the cost what this of emissions. of the third system to reductions while lower impact beginning operations initiatives combustion fewer for customers internally to reduce of customers. for e-team The Environmental we and of positioning early and was traditional by stakeholder environmental the as EverGreen quarter And hybrid brand storage This the substituting to results the reducing service priority third which of focused on the strategic on

combustion XXXX. We Precision the fuel introduced monitoring system orders EverGreen have systems deployment real-time EverGreen provides utilizes more determine of This AlphaAnalytics power frequency precise in -- these fuel Also quarter, utilizing during emissions combustion for planned customer to system. we and information. and third several and interest hybrid and for high the accurate monitoring

introduction emissions. With the and these accurate that this utilizing backlog emission customers optimize field Precision our on key deployment. their of of to systems demand part and first reduce We emission our supply, are is and power our a this end and with the profiles file a been of and automation, X to huge as loading drilling monitoring regulations. Currently, report operation in in recommendations aspects thrilled strategy. see we install new demands customers to The system fleet, these to has make widely reduce to the every acting systems It's be GHG even GHG very see their our the success outstripping on manage, potential other engine deployed with we the X our all during rig can customer alpha before strive before measure, year. exciting of then have

growth to of American now North in Alpha we include quarter, commercial, sequential and apps thesis margins key fully rigs XX% Alpha are technologies with customers digital and AlphaAutomation. the to opportunity. by with drilling on supporting continue grow. XX% sequentially. the field utilization that have technologies market XX equipped revenue driver the digital the to of XX with those share increased are days Alpha activity market our during and app a We Our Precision's rigs penetrate associated growth, continuing continue we've Also, AlphaAutomation add our new

both that our and savings a demonstrate This fair Alpha to sustainable discern we're describing this value. where services, reasonable are our model for we web carte proposition Alpha post and XX-plus la pages Technologies case our important that customer significant we're we We that aspiration it's and I'll pricing capturing retains So promise. studies a we to customers drillings. not today, a future of digital Alpha value savings enduring our we for a and portion total the you as our well à and digital generating is create of point or customers. for with view cost Precision

domestic Turning U.S. now the to market.

has past of are Our there adds delayed activity couple rig few and guidance, slightly factors constrained weeks. our trend a of prior over the

in rig that for a August, variant customer the Delta rig postponed related tighten procurement short later we factor, late a know away to which until and XXXX, to the be the believe $XX E&P activity by teams deployments increases, planned few this But quarter down demonstrated of This important, the to delayed mid-July well that surge resulting probably decisions, favorable we thresholds. You'll prices. volatility super-spec delayed below know more driven and desired that for risk to take will is during second by rig our for uncertainty from price term, continues discipline on But day drove economic several walking is as our the some from rate up ramps and pressure the focus below cost WTI which share. third accounted into market the strong activations opportunities pricing positioned this and market couple us we'll days. more We year.

stated what see EPS We march $XX,XXX that rig reported now that upwards. can that our into is up our positive are achieving in we the active is low Despite range activations hot we quarter call, We on So you $XXX rates pricing to traction. renewal where rigs can to the and strategy. our back And book, to pricing we and our it rate is range. are in committed I moving see $XX,XXX this remain second in moving can on see reiterate, now headwinds, it sequentially. and recontracting those the territory, goal now day our

digital a rig E&P la EverGreen Now while be on price technologies premiums headline all-in executive, tougher à carte focused to the and sell Alpha solutions who typically the with may an procurement our is rate.

selling We wellbore total customers and solutions on successful highly reduction AFE are of cost. our most a view have strategic to these who emissions

rates active the bids which Carey Now expect multiyear both costs rigs rigs. we're dragging tracking. to as the mirror. with XX these mentioned at for rigs, but We is Today, related day over bid certain margins bottom is more that transitory and operating reactivating view a as we're high costs in items rearview our book, and interestingly mobilizing our well XXX that

rig up does customer that mean adds, There we that are U.S. strong rig leading that XXXX. of not XXX it's but industry Now indicator expect a going interest. heightened into question is no counts

Currently, Turning surprisingly Canada. is QX, QX to XX our operating typically rigs and time Canada. our which we're in higher XX% than average busiest was

customers. budget the the and AECO our Our key further during strengthening is Canadian for season NGL commodities, WCS prices condensate with outlook oil their critical gas, offer

Montney higher -- midterm broad demand oil, consolidated on rates. Canadian we positions the with industry for heavy also day focus both in the our front-load We XXXX With peak see spending expect winter strong even QX to bullish activity XXX Canada. in during to would suggesting outlook if utilization I demand the near-term mentioned could in not XXX industry be our in the are for discipline The along rig market, pricing XXXX in our season. to new the exceed and XXX is range. I business drilling U.S. levels, and demand surprised industry and operators the

We the strategy. continue day driving will believe positive our will rates support achieve to EPS. structure this We market

have Kuwait, expected tender later our month. new be talking we've expect contracts the in In this next Now forward process process be beginning steady. X idle Aramco of of remain to X and once Arabian our X for renewing in of this extended several we've tenders is and we indicates for rigs, years developed those of to expect but stable been is additional international contracts reactivating years. also our that is pending contracted multi-rig Saudi the rigs business. released to rigs will turning been The reactivated customer rigs, to in to early remains We're and X these about XXXX. now X Activity our plan. rig operating for the

we the our As process. waiting the understand visa work reopen government customers to tender delayed the on it,

are the and we virtually national the workers Earlier the should Now the process the clear of field all for was Clearly, reopened, we're highest several and ex-patriot company. control years. are Kuwait Outside the NOCs trending see addressing that Saudi the way activity this foreign rig visa not inquiries work they remember to in tender in the crews at oil in visas upwards proceed. customer internationally. in Kuwait Arabia, currently week, and level

remain with Servicing XX Crewing team well will in customers' group well in service rigs industry challenge crewing exceedingly important will managed busy upward we for acute running and and Canada continue also our Precision sector. Well competitive remains Dakota. X the is pricing rigs an advantage further well, service North very meet to We Our believe has needs. our and and in today tension an that servicing drive

focus to EPS is for our also key objective driving this Our on business. rates positive back a

On support the Regarding make debt on the we believe internal flow building I by commitments well. our cash that reduction, employees that I to when multiyear those explained, covered leverage those remain track. deliver people for priority conclude note, value, to allowing creating these And Precision. commitments and reinforce those systems and shareholder our as he by want I'll focused strategic of we on we thanking commitments. on Carey topics

us call through now back period. for I'll our you. Precision rigs, facilities turn corporate the out priorities making you in questions. an the their to all team doing to in in parts and our our deliver strategic of operator Thank the challenging our operating field and All successful for intensely of support all you

Instructions]. [Operator

line from comes of Sandler. Ian question Piper first from the MacPherson The

to Can your lot cost toes unique of handle it pressures containing a and speak you seeing from you do your results elsewhere differentiation in other on to you are industry? refreshing the feels your seeing you to a throughout that for have these it's hear looks your labor? throughout think labor part or the -- insulating that stubbed where elsewhere. from we're in you company good We're And But the on that maybe sourcing quality your business environment, and inflation spoke feels this that and that? what ways cost

kind so costs. of Yes. internationally our there's Canada provisions both through Obviously, Well, in contracts to U.S. pass customers. and and in have generally, labor our areas. But pressures two to those

a we're So little in But to want come less just a recruiting the bit cost inflation. about moment. labor concerned question back I to

inflation, costs. of the And a material the the will an of we to increase steel on able there But supply the We're to opportunity capital up an chain. the partners to with remobilization third very price pick think costs did mitigate get -- increases of to drill near most in was work cost in outstrip are of we inflation effects you buy price And inventory we and spending us imminent. good expect at at our the pipe On experienced and term. our quarter during some was related inflation. some what quarter ahead the start-up to increases longer kind term, see continuing we're out price over

challenge particularly the Canada, market Servicing our front. U.S. group. we face. in a a Now the challenge It's and in in back every on It's recruiting Well

the includes a tied with some days in our rigs amp think find to couple to recruiting those a program our of Hope our attractor training applications, question, attract employees. In activity it's challenge. getting is team and team through to our really everything your bonuses the meet from of The brand on our good we're kind efforts. very candidates the that answered waiting I right fact, that training levels this systematic strong for working to types Precision there generating recruiting and to Ian. with employees, industry. a training But last out them of up that approach to I referral week, It recruiting then helps systems Q us incenting up to systems for and our spent candidates applications

great. that's No, Kevin. great, Yes. That's

you that? You also them push -- the help part more before work really in your absorb cherrypicking talked it's down regard more many to we where team the turning to, think need battles? power no on turning needs to rates sales say, how to to U.S. with becoming more rates, in get. -- And liberated your is do more rigs are about Where you there's down are it recently pricing opposed your market order you as

-- bids now, probably hundred middle right commented count I and are rigs in a big in are of on. the couple XXX active is XXX different right on Canada We the in over U.S. of our quarries bidding also

is get don't imminently. really either to or into now that you willingness customers What we upset in -- team to too tell away to want opportunities think much our So price work better those into our sales narrative would right would our that tells I that I that are there you discussions. walk

Our with next comes Aaron TD question from Securities. MacNeil

Ian's I on piggyback think Carey. I'll question,

you you of if in QX? job it, was there of your day think good I pressures did labor U.S., I a cost gross in be how margins to call but increase wondering a would I'm QX, in that, $X,XXX the be so, remarks, in also $X,XXX cost the of might how of pricing increase much And guess costs $XXX versus inflation prepared covering able your say from a or And anything implied that versus to parse else sequentially the much pricing out? that gross labor? would lower in net

of help can a kind information few pieces I Yes. you to of calculations. give in your you

you're XX activate million to having some chunky maybe, rigs each rigs move, them we rig $X costs So quarter, we're rigs, then those million, spread spread and not expenses pretty those would whole I to over at of of one a in over rigs. for for if rigs lot XX out if the talking X a going say probably averaged $X

been costs there burden similar And or may -- expect overhead go the to R&M of bit costs have in But didn't and We have increases may activity we industry expect to in year little a we on increases to the be rig as market fourth had So and higher QX, quarter. we the those -- Canadian we this quarter. don't in again, There quarter, be have next across were meaningful the any wage U.S. during the have lumpy more not cost. quarter. spread in wage that activity this market.

So some rate a net And those on I are I for to you you. how points side was think data for break cost out can't or consider. the day much of increase the gross

-- costs. I really just less dissecting interested I'm onetime in

Just pricing guidance out trying it would with to parse implied your obviously QX because be...

and So large. why which expect yes, day is to away margin expectation take operating we go so costs are in can the increases QX, planning QX, have to daily you in jump rate down the that is we

it. Got

the that Kevin, that that? you And to are app spread it growth new Okay. with can share quarter a function getting apps bit out give it's rolled good sequential of across this assume specifically can in step you be new uptick? analytics. of maybe a but I seemed is automation the on what out fleet, us if growth you a had more app, and

drive app that up. pick of would drilling our that up. managed kind really we're pressure really three having I It's success good tell components with that you

from our get word-of-mouth operators the also more that we're there's comfortable are but multiple with -- more create And app piece. important as transfer and then apps, one rig and to rigs using though, are more apps that just not that's seeing, rig. value one So

adoption So pressure good customers more that the used that's is getting pretty good of customer now and app comfortable out more organic drilling. apps of adding there, new -- app are right one the managed sort apps, that's

Understood. Last question for me.

the see or commodity, you on operations impact either COVID's fleet in mentioned the that Canada did in impact in your quarter? third day-to-day U.S. on You but the

Okay.

okay. door, the in, going I'm if open that's to jump so You

Sure.

impacted that We variant procedures test, in surge of September we on provision of policy August, some when was the and of the it with of I X, the full of the comply of employees with out negative X,XXX. quick a compliance implementation of program. haven't full COVID-XX. infections some with of than people effectiveness response Everybody by in mandatory kind mid-September, people the the and negative a sharp field. expecting our number else, I'm or that vaccine providing employees, X X,XXX X and are live out pleased noise. I so the really of see requirement, was didn't hour There vaccine so in everybody think or almost we that since of wish we is actually less kind implemented would But and tests. rig had did the it. a that either pushback a do And Delta was went

next comes and Taylor Tudor, from Our Holt. Zurcher Pickering from question

a Carey, to I've and start. of Kevin got a bit one high-level

any buckets there And that terms you there are XXXX? curious strategic where XXXX, curious any if a my in on But I as sort peek of that or year. sneak progress if if preview could strategic might to sit sheet front just much there out improving priorities made of price for good priorities is of obviously XXXX, which for the pretty we as strategic been -- leadership, all change we in X So are well delivering sneak of the through digital progress commodity strategic today, of run you primary might that without different the have different to much the a a items different of XXXX? on there pricing environment, terms activity in direction in performance, for be balance give guess, at deleveraging as and be strategic priorities. just a right top -- you've question We're us is seems environment ESG like stick going leading sort

the there conference on to release But Taylor, It's sure of but those become there. strong it's leveraging yet. tell quite sure good is initiatives in for priority think reinforced, business we I sure and there. you, be think I'd question. us, there ESG our going be away a while, ESG returns technology to question. up not we're will February going delivering course, top call. our quite digital soon. the up there, point scale anytime I'm for QX I'm I'm We'll performance just be And I'm And with shareholder where may will be fair common, a I the get But not financial will

the where enough. we we just of and see pricing? got about where fully in going U.S. high class feels out different just both in market Canada the for is the of higher next of U.S. a be number end today. think the of classes improving if Okay. is best as rig But the more then And it's Triple again, there one Clearly, sold a And about bucket the the high think Canada you've curious, it's at Fair pricing, rig XX of uniformed particularly Super XXXX, Canada market in chance you across trending end like to at versus markets. whether pricing months,

maybe of and momentum great have we probably chance pricing there. seeing today if a you So I'm But significant get pricing pushing as you're for strongest could into us tightness rank of just XXXX? you best chance curious where the

across all kind something the prepared probably tide comments, it's unless from described at of macro my classes. we changes the Taylor, a that rising beginning of

that's now. And we're right what seeing

is far. macro this kind so out And And that's laying what seeing for that's there us. we're of what

Any on piece build up And kind for had can probably Okay. CapEx. And it I budget you some is just starting maintenance, has of XXXX, sort of other last -- maybe growth perspective? to growth buckets that's year Alpha for full a growth some mean XXXX some excuse QX me a it's that from QX intriguing and EverGreen. CapEx of question XXXX or a again, today XXXX. back whether up, opportunistic opportunistic in half of forecast for been for you the XXXX spending. -- areas allocation or capital then The we with that's sort for me, of Any maintenance, come of growth-oriented

to then linear kind Taylor, it's capacity are to which that activity doing, will going interacting million from rig and we're or per upgrades maintenance increase to Alpha perspective, North contracted capital, million pump American of the to these be rig. which adding $X with be $X.X

million that would likely international be plan probably million activity $X it might in expectations the But would reactivating talking rig -- thing per America. mirroring to similar It I $X with given the USD in say increases We're in dollar amounts So reactivate probably real increase the be plan, the about if internationally, increase not a same don't million XX activity. our that a North from be activity little be amount we're chunkier. dollar expect an to would anywhere year the rigs newbuild. big will a market, to internationally. rig CapEx in bit this And

Markets. from comes question next Syed Capital from ATB Our Waqar

Yes.

you that respect. international in of Would that on terms rig side OpEx as reactivate the would is, the in My for thank some reactivations, as into a mentioned management any rigs? Carey, cost of the the first a job industry, rather hope a and steps. taking certainly teams all needed you is all, of rejecting lower rate. other question budget. for cost I CapEx taking take than So there kind in congrats similar This leadership go you be well

lot a rigs as we in the rig. Kuwait talking And side. it where some It the would rig modifications, be would moving type what $XXX $XX we're need million about than X per smaller It is idle North per and they million reactivate America be opportunities reactivation. well those but rigs less OpEx then would will CapEx be some from potentially for than

Okay.

like mentioned bids bids? those the there XXX-or-so about market. there were you Kevin, amongst us that in and out Secondly, give privates you a split Could public U.S. between

Yes, more it about back to XX-XX. don't kind public, think of private we're the like Waqar, equity. setting in it's front majority a of percentage of think I large me, the numbers but still would have be weighting of has I kind but shifted traditional.

XX And have then you working... rigs currently Okay. Great.

take I the on you that. don't not projecting XXX, that costed We XXX don't as What number, we're rig adds. that --

season. ago than We are season, discovery order a is of There's magnitude higher interest year moving easily of but certainly it in in budgeting of price pieces, inquiries. lot and a

then XX currently U.S. in Great. the And you're Yes. running rigs

XX? around number Or your year that now given actions? the exit has recent changed of some to expect still You

forward seems calls. I count short couple every It last I a like rig come time the up going projected of

year. to we change, am the a something this that line to pretty I as anything opportunities appear sight count forward. have the And nervous of meeting, solid rigs be by of quite as we about looks and rig but through threshold. get So little really soon have Certainly, it would And a end might deployed say about good get going XX promising.

I've couple the of of First quarters. cracked previous been all,

okay. That's That's okay.

So market? then just Canadian program. do And revenues final the abandonment to question on when in well servicing may come When exhausted? the well you expect in, be your that

a good Waqar. That's question, really Yes.

servicing and it's in of year. funds the of it's of well in -- because quite I actually and up the but bureaucratic, at funds of next used kind say all, BC in they available Alberta, the how to the distributing wouldn't first end they've scheduled end fraction of the program, a Saskatchewan. funding been been have slow only kind complicated it's But So

good I to think there's push to be going it. a extend

extended. So been there's But indication yet. it could be no

decision that I think if that way. it mid-to-late be goes will government XXXX

that makes wells. capital the eliminating as sense I I'd been work program, in. XX% operating the through and even that before has lot first and we actually this tied a traditional and XXXX There our pandemic commented got through the where service replace I good from a work that and the could moved on bit. this about cut demand really in thing of period work. before over to say, was now by discipline it they see not X-year drill back well went into We of pull think So enough, think XXXX the of that work that efficiency, it to But focusing period companies activity is real work reducing

lot both abandonment heavy there's that core of runs demand out. and So in gas, work, core we'll I work oil well think that conventional core program oil, for continue when finally service a

if Okay. the of looking of question. it a into Would more same rig you SCR-type just Or markets. are presence? already U.S. international would have traditional rigs? in well? I there one be you out Great. markets kind as may be for where the markets more or the those rigs some sneak be And may super-spec to And to Carey that mobs enter new into mentioned

your a answer question. but vague I'll my I still be with think I'll So answer, bit

we're the Saudi drilling. Arabia. and including There Gulf, Arabian in is bordering looking region, pad-style the Gulf interest Kuwait Arabian the in So a countries, high

will think, back. other So the competitors AC, We of the saw a Super of have rig, attractiveness. a Abu our one actually with Triple Dhabi do months deal I National Drilling Company couple

So drilling some a with points I all shallower kind And for think growing opportunity for right pad opportunities that heavy see drilling. also oil rigs. of we now to

see are we America be to in an both uncovers. then a international to technology at they but markets that -- it's what So manner again, and in tend they react slower, bit industrialized North opportunities

North grow in I future things pad East. the the even do think drilling our the the Super play. with precisioned opportunities, our there's interesting And several work So a are have American will have both that have in oil They will drillers I into in certainly that and East. will super places singles Middle bring -- think Middle countries. pad Triples we will and drilling very adjacent

MacKey Keith comes RBC. next Our from with question

anecdotal rigs out, evidence in to from of field heard Canada, of wanted we've the frame. restrictions kind keeping, start say, just through back time So QX into going labor

gives are can what count level the guess, the rig I in reach that QX? curious XXX confidence? confident just how you And So that XXX industry to you

Well, demand, activity. not were you that comments necessarily may notice my

level this actually getting industry been rebound now. I successful rigs rigs, a history boy, for have sharper, or staffing think, previous even The is But those that has commented, a the and every not you, Whether the we I of see has So up. fired it's I'll staffing rigs of demand. sure, drillers Generally, right step good rigs. been tell that sharp or challenged big in a can industry challenge.

it singles Is or it. board? challenging triples Yes. versus it is areas, the Got across in any particular

the is be secure Well, style end as servicing, for months that called-out defined as would isn't which business with on where job job for sure, rig likely a rotation. well

certainly in say well we there market bit every every the servicing. Certainly, in seems to I'd is for a go in, we're sure. we're through we not that a saw drilling We in summer, simply process So But reluctance September, our participate, September. those market to participate work. September. easier recruiting take people -- be in geographic improve recruiting market to to off, men than both every improved summer really, starting the maybe down And recruiting back doubled really we wanted young

actually working now. well So for it's us

XX original back peak, to as I up rigs that so Precision the if -- a XX, to question, that demand means going XX, rigs. that think XXX staff has is XX,

be that get I think to we'll So able there.

it. Got

that's No, Okay. very helpful.

levels day just and seeking in say, to that like and can levels target? maybe comment what, you in on get gears get comment about that. you general shifting activity to to EPS rates positive relative rates your be hit to to day required things Just levels so back would that general Can XXXX

be... don't actually my here, have Yes. numbers at fingertips it's I those but to going

think I to our and depreciation, taxes. interest Yes, got we've cover

both was So $XXX to $XX one, EBITDA which getting a we that cost business got we tax get were it activity fixed the but technology drive have XXXX to XXXX. we need in growing then. that an we a And base of think $XXX two, level helping back we a than mix depreciation, XXXX, than number and Number in relatively lower million; we've bit could to pricing rapidly that's little did in where million; But lower would have we interest, not maturing low. that's it, be is call and and be close did XXXX and rate million, And XXXX. EBITDA.

[Operator Instructions].

Our next from [indiscernible]. question comes

the contracts States discussions you for between the the in the the end rigs discussions is 'XX? customer longer difference while? and the finding the into than Canada XXXX, using, given with comfortable technologies crews pushing have your to on And that of a there with they're regularly to the desire they've longevity a worked and with, lock equipment with, with are crews them With of customers, they are into in they're wanting comfortable

approved. to they're been bit they're corporate so both though kind even Joseph, certain markets both for level good relatively a human markets. you they have applies behavior similar, running I highly that and that haven't their would budgets complicated. answer base most I some will the activity going similar, in relatively and operators, behavior one be it's But to is is question, of would tell you that of tell

Certainly, trying to early a are they're trying for full for can, for little of crews even rigs it, we're and yes, locked a absolutely, sometimes XXXX to that. lock even if those or time. and longer So period capture, rates in year XXXX beyond customers rigs, bit rates, call in seeing new XXXX they

being yet, right So a of there's where on now running contracts. budget, and sites little but are those opportunistic shorter-term they're a also, component on approved rigs that But larger or then been their on in either a their basis haven't that's probably front. and well-to-well rigs

we've But to if that the a So a and opportunistic little bit far strategic, more makes been mix. say would that I you. behavior a bit has so seen less it's of a sense

And in Okay. anything do of contracting the yet see you terms into or of much material pushing book business? 'XX

the still there's think and book up yet X-year in for a be builds as But no says mix far that no We're that all to X is direction. we going or growing for of opportunity is pace, out. a project to uncertainty market going already activity increase in And we book and to spending this get to the momentum and and like up it contracts wouldn't trend rigs and where our is for not the read There that some increase I to any that a degree, comes I certainty years. contracts I them. deeper those real contracted. X-year anxious odd rates firming its recovery. so pushing mix as current there now. right market into the We're digging the would forward get not probably customer XXXX, expect will of be best

walk Can fourth $X.X the the EBITDA quarter look first you Super. versus under in adjusted expense quarter at you by million you happened a released And up X then was XX%. corporate with that -- that such In number the question just what million. difference? for in months, by $XX.XXX through that, Last it your big quarter The the me up was XX%. was Carey.

compensation our share-based on variable big the accrual. is expense So corporate

then on each So mark-to-market our the share and on participant. based planned quarter end the at plans, we the the X-year of of share-based based price long-term vesting time

performance had year. a this So really -- share strong we to continue price we have

of increased, year, we has broadly, guidance at the plan of SG&A that I our the just say an very gave on value so the accrual So during we took comp the a tracked quarter. beginning would accrual though and G&A be quarter every we've for we've had significant even the and million share-based throughout that still would activity $XX before increase and year. in are providing year, that guidance the the

try to big this into really a been the as keep team recovery. as we to focus it's going we're So long management the structure of can cost as

further Ford questions call no at time. any Carey to showing for I'm back like this I'd remarks. to over closing turn the

and Thank you. appreciate That you our call call. in for we I concludes today, QX joining look to February. conference our us forward with conference meeting again all you

Thank you today's for participating. concludes call. This conference

disconnect. may now You