Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $108 million, exceeding expectations, driven by strong drilling activity in Canada and improved activity in the U.S. [4][5] - Revenue decreased by 5% year-over-year to $407 million, while net earnings were $60 million or $1.21 per share, marking the twelfth consecutive quarter of positive earnings [5][11] - Funds from operations were $104 million, and cash provided by operations was $147 million [5][11] Business Line Data and Key Metrics Changes - In the U.S., drilling activity averaged 33 rigs in Q2, an increase of three rigs from the previous quarter, with operating days up 13% [6][7] - Daily operating margins in the U.S. were $9,026, an increase of $666 from Q1, exceeding guidance [6] - In Canada, drilling activity averaged 50 rigs, with daily operating margins of $15,306, up $883 from Q2 2024 [8] - The Completion and Production Services segment saw adjusted EBITDA of $10 million, down 18% year-over-year due to a 23% decrease in well service hours [9] Market Data and Key Metrics Changes - Internationally, drilling activity averaged seven rigs, with average day rates increasing by 4% year-over-year to $53,129 [8] - The overall market for oil and gas has seen increased prices, with rig counts stable or up in key basins like Haynesville and Marcellus [11] Company Strategy and Development Direction - The company plans to increase its capital expenditures for 2025 from $200 million to $240 million, focusing on sustaining infrastructure and upgrades [9][12] - Precision Drilling aims to reduce debt by $700 million between 2022 and 2027, having already reduced $525 million [13] - The company is focusing on maximizing free cash flow and has implemented cost reduction plans to manage expenses effectively [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about customer demand for gas-directed drilling, with expectations of increased rig activity in the U.S. [14][15] - The outlook for the remainder of 2025 has improved significantly, with strong customer demand for rig upgrades and term contracts [14][15] - Management noted that while macro uncertainties persist, the company is well-positioned to capitalize on market opportunities [14][15] Other Important Information - The company has a strong liquidity position of approximately $530 million, with a net debt to trailing twelve-month EBITDA ratio of 1.3 times [11] - The company is committed to reducing its debt and returning capital to shareholders through share repurchases [12][13] Q&A Session Summary Question: Growth in the U.S. Market - Management noted that the growth in gas-based work is primarily driven by private companies, with expectations to increase rig counts to 40-45 over time [38][40] Question: Canadian Market Dynamics - Management discussed the oversupply in the double rig segment and the need for consolidation among service providers to improve pricing discipline [42][45] Question: Contract Durations and Upgrades - Management clarified that most rig upgrades do not require long-term contracts to recoup costs, with many upgrades expected to generate returns within six months to a year [52][54] Question: Future Rig Capabilities - Management indicated that upgraded rigs will reach peak capabilities, allowing for efficient drilling of longer laterals in key basins [70][73] Question: Customer Interest in Electrification - There is currently limited interest from Canadian operators in electrifying service rigs, although there is some interest in high-line power drilling rigs [81] Question: Breakdown of Rig Upgrades - The majority of the 22 rig upgrades are targeted in the Haynesville, Marcellus, Montney, and Canadian heavy oil basins [86]