Financial Data and Key Metrics Changes - Precision Drilling reported adjusted EBITDA of $126 million for Q4 2025, compared to $121 million in Q4 2024, reflecting a year-over-year increase [4] - The company recorded a net loss of $42 million in Q4 2025, which included non-cash charges of $67 million for decommissioning drilling rigs and $17 million for drill pipe, while net income would have been positive $42 million without these charges [5] - The net debt to adjusted EBITDA ratio improved to 1.2 times, with a reduction in debt by CAD 101 million during the year [2][13] Business Line Data and Key Metrics Changes - In Canada, drilling activity averaged 66 active rigs, an increase of 1 rig from Q4 2024, with daily operating margins reported at CAD 14,132, down from CAD 14,559 in Q4 2024 [5] - In the U.S., the average active rig count was 37, an increase of three rigs from the prior year, with daily operating margins of $8,754, slightly up from $8,700 in Q3 2025 [6] - The CMP segment reported adjusted EBITDA of CAD 17 million, up from CAD 16 million in the prior year, driven by increased well servicing demand in Canada [8] Market Data and Key Metrics Changes - Internationally, Precision averaged seven active rigs, down from eight in the prior year, with international day rates averaging $53,505, an 8% increase from the previous year [6][7] - The Canadian market outlook remains solid, supported by commodity prices and increased LNG and crude takeaway capacity, while the U.S. market is expected to remain flat with pockets of growth [20] Company Strategy and Development Direction - The company aims to drive revenue growth and deepen customer relationships, focusing on performance and efficiency to differentiate itself in the market [15][19] - Precision is investing in rig upgrades and digital technologies to enhance operational performance and customer service [18] - The company is exploring international growth opportunities, including a memorandum of understanding (MOU) in Argentina to provide idle rigs and digital technology [21][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Canadian market's medium to long-term outlook, despite short-term volatility due to weather and commodity prices [20] - The U.S. market is expected to remain flat, but there are opportunities for modest growth driven by performance differentiation [20] - The company plans to continue its focus on financial discipline and shareholder returns, with a target to increase free cash flow allocated to shareholders up to 50% [12][60] Other Important Information - Capital expenditures for 2025 were CAD 263 million, with CAD 156 million for sustaining and infrastructure and CAD 107 million for upgrades [9] - The company expects to incur $2 million in one-time charges related to rig reactivations in Q1 2026 [10] Q&A Session Summary Question: Context around the rig demobilization in Kuwait - Precision has six rigs in Kuwait, with four active and two idle, looking for opportunities to reactivate the idle rigs [25][26] Question: Potential upside in the U.S. rig count - Management indicated that growth opportunities in the U.S. are driven by performance and efficiency, with active discussions in multiple basins [31][32] Question: Guidance on U.S. margins for Q1 - The guidance for U.S. margins is $8,000-$9,000 per day, with mixed pricing trends across operating segments [38][39] Question: Details on the MOU in Argentina - The MOU aims to explore opportunities in Argentina with an established partner, focusing on performance and technology [42][43] Question: Impact of customer changes on Canadian demand - Management noted no significant change in demand despite individual customer adjustments, with strong activity levels in the Canadian market [50][51] Question: Rig upgrade capital allocation - A portion of the $63 million earmarked for upgrades is committed, with opportunities identified in Canada and the U.S. [62][64]