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1. Company Snapshot

1.a. Company Description

Ensign Energy Services Inc., together with its subsidiaries, provides oilfield services to the crude oil and natural gas industries in Canada, the United States, and internationally.The company offers shallow, intermediate, and deep well drilling, as well as specialized drilling services, including horizontal, underbalanced, horizontal re-entry, and slant drilling for steam assisted gravity drainage applications; and equipment and services.It also provides coring and oil sands drilling services to the mining, and oil and natural gas industries; directional drilling and related services for conventional and horizontal drilling applications; shallow to deep well services, such as completions, abandonments, production workovers, and bottom hole pump changes for oil and natural gas producers; and interactive pressure drilling services with self-contained systems comprising nitrogen generation and compression equipment, and surface control systems.


In addition, the company rents drill strings, loaders, tanks, pumps, rig mattings, blow-out preventers, waste bins, and wastewater treatment equipment for the drilling and completions segments of the oilfield industry.Further, the company offers transportation services.As of December 31, 2021, it operated a fleet of 262 land drilling rigs, 21 specialty coring rigs, and 100 well servicing rigs.


The company was incorporated in 1987 and is headquartered in Calgary, Canada.

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1.b. Last Insights on ESI

Ensign Energy Services Inc.'s recent performance was negatively driven by weak Q4 2024 results, which saw a decline in revenue and adjusted EBITDA. The company's operating loss and lower revenue from well servicing and drilling activities contributed to the disappointing earnings. Additionally, the company's high debt levels, partly due to the $25 million private placement of unsecured, subordinated convertible debentures in December 2024, may indicate financial strain.

1.c. Company Highlights

2. Ensign Energy Services' Q3 2025 Earnings: A Closer Look

Ensign Energy Services Inc. reported its third-quarter 2025 results, with revenue of $411.2 million, a 5% decrease from $434.6 million in the same period in 2024. Adjusted EBITDA was $98.6 million, 17% lower than $119 million in the third quarter of 2024. The company's EPS was -$0.02, missing estimates of -$0.01204. The decrease in revenue and adjusted EBITDA was largely due to a challenging market environment. The company's cash generation capabilities remained strong, with $98.5 million in debt reduction in the first nine months of 2025.

Publication Date: Nov -17

📋 Highlights
  • Revenue Decline:: Q3 2025 revenue fell 5% to $411.2M vs. $434.6M in Q3 2024.
  • Adjusted EBITDA Drop:: Adjusted EBITDA declined 17% to $98.6M compared to $119M in the prior year quarter.
  • Debt Reduction Progress:: Reduced debt by $98.5M in the first nine months of 2025, targeting $600M reduction by mid-2026.
  • Contract Revenue Momentum:: Secured $1.1B in forward contract revenue, with $300M in long-term contracts and 3-year deals including rate increases.
  • Operational Efficiency Gains:: Expanded U.S. drilling market share by 50 bps with 41 high-spec rigs, and modified rigs to handle 30,000–35,000 ft. depths for high-day-rate contracts.

Operational Highlights

Operationally, Ensign ran an average of 25 drill rigs and 50 well service rigs worldwide during the quarter. The U.S. drilling segment had 41 high-spec rigs operating, mostly high-spec triples, with a 50 bps increase in market share. In Canada, 43 drilling rigs were active, with expectations to add a few more before year-end and peak at around 55 in the first quarter of 2026. The company's EDGE drilling rig automation continues to be adopted, providing a high-margin bolt-on incremental revenue stream.

Contract Revenue and Debt Reduction

The company has over $1.1 billion of forward contract revenue under contract, with a long-term contract base forecast of $300 million. Ensign is focused on reducing debt, with a target to achieve $600 million in debt reduction, now expected to be achieved in the first half of 2026. The company's net debt to EBITDA ratio stands at 2.53, indicating a significant leverage position.

Valuation and Outlook

Ensign's valuation metrics indicate a relatively low P/S Ratio of 0.28 and an EV/EBITDA of 3.72. Analysts estimate next year's revenue growth at 3.0%. With a strong contract backlog and a focus on debt reduction, the company is well-positioned to navigate the challenging market environment. As the company continues to optimize its operations and reduce debt, it is expected to improve its financial performance.

Growth Prospects

The company sees opportunities for incremental demand for 1,500-horsepower triples, driven by drilling efficiency and geological decline. With a strong team in place, particularly in Venezuela, and a focus on existing markets, Ensign is poised to capitalize on emerging opportunities. Client-funded CapEx is expected to positively impact the cash flow statement over the next 6 to 12 months, further supporting the company's growth prospects.

3. NewsRoom

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How Recent Shifts Are Rewriting the Story for Ensign Energy Services

Dec -02

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How Recent Developments Are Rewriting the Story for Ensign Energy Services

Nov -18

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TSX Penny Stocks To Watch In November 2025

Nov -12

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Ensign Energy Services Inc (ESVIF) Q3 2025 Earnings Call Highlights: Market Share Growth and ...

Nov -08

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Ensign Energy Services Inc. Reports 2025 Third Quarter Results

Nov -07

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Why Analysts See the Story Changing for Ensign Energy Services Amid Mixed Signals

Nov -02

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Ensign Energy Services Inc. - Third Quarter 2025 Earnings Conference Call and Webcast

Oct -27

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Ensign Energy Services Inc.'s (TSE:ESI) last week's 10% decline must have disappointed individual investors who have a significant stake

Oct -12

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.72%)

6. Segments

Rig Rental

Expected Growth: 3.5%

Ensign Energy Services Inc.'s Rig Rental segment growth of 3.5% is driven by increasing demand for oil and gas exploration, improved drilling efficiencies, and strategic expansion into new markets. Additionally, the company's modernized fleet and cost-effective services contribute to its growth, as customers seek reliable and efficient drilling solutions.

Service

Expected Growth: 4.5%

Ensign Energy Services Inc.'s 4.5% growth is driven by increasing demand for oilfield services, expansion into new markets, and strategic acquisitions. Additionally, improving operational efficiency, investment in technology, and a strong balance sheet have contributed to the company's growth momentum.

7. Detailed Products

Drilling Services

Ensign Energy Services Inc. provides drilling services to oil and gas companies, offering a range of drilling rigs and equipment to support exploration and production activities.

Well Servicing

Ensign Energy Services Inc. offers well servicing solutions, including well maintenance, repair, and optimization services to ensure optimal well performance.

Downhole Surveying

Ensign Energy Services Inc. provides downhole surveying services, using advanced technologies to gather data on wellbore trajectory and formation evaluation.

Directional Drilling

Ensign Energy Services Inc. offers directional drilling services, enabling precise control over wellbore trajectory and placement.

Logging and Formation Evaluation

Ensign Energy Services Inc. provides logging and formation evaluation services, using advanced technologies to gather data on reservoir properties and fluid flow.

Cased Hole Logging

Ensign Energy Services Inc. offers cased hole logging services, providing data on wellbore integrity and reservoir performance.

8. Ensign Energy Services Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Ensign Energy Services Inc. is moderate due to the availability of alternative drilling and well servicing companies.

Bargaining Power Of Customers

The bargaining power of customers is low for Ensign Energy Services Inc. as the company has a diverse customer base and no single customer accounts for a significant portion of its revenue.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Ensign Energy Services Inc. as the company relies on a few key suppliers for its equipment and materials.

Threat Of New Entrants

The threat of new entrants is low for Ensign Energy Services Inc. due to the high capital requirements and regulatory barriers to entry in the drilling and well servicing industry.

Intensity Of Rivalry

The intensity of rivalry is high for Ensign Energy Services Inc. due to the competitive nature of the drilling and well servicing industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.22%
Debt Cost 12.60%
Equity Weight 51.78%
Equity Cost 19.40%
WACC 16.13%
Leverage 93.12%

11. Quality Control: Ensign Energy Services Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PHX Energy

A-Score: 7.0/10

Value: 8.7

Growth: 7.2

Quality: 5.9

Yield: 10.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Precision Drilling

A-Score: 5.0/10

Value: 8.5

Growth: 6.6

Quality: 5.6

Yield: 0.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Borr Drilling

A-Score: 4.4/10

Value: 8.6

Growth: 8.2

Quality: 4.6

Yield: 2.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Ensign Energy Services

A-Score: 4.2/10

Value: 9.3

Growth: 4.9

Quality: 3.0

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
Independence Contract Drilling

A-Score: 3.7/10

Value: 10.0

Growth: 3.8

Quality: 2.4

Yield: 0.0

Momentum: 5.0

Volatility: 1.0

1-Year Total Return ->

View Full Report
Stock-Card
Nabors

A-Score: 3.4/10

Value: 9.3

Growth: 3.8

Quality: 5.1

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.78$

Current Price

2.78$

Potential

-0.00%

Expected Cash-Flows