Ensign Energy Services Inc posted a net income attributable to common shareholders of $7.68 million (CAD 10.3 million) for the second quarter, compared to a net loss attributable to common shareholders of $20.9 million (CAD 28.1 million) for the second quarter of 2022.
Ensign’s revenue for the quarter was $322.5 million (CAD 432.8 million), a 26 percent increase year over year from $256.4 million (CAD 344.1 million). The company’s adjusted EBITDA totaled $86.9 million (CAD 116.6 million) in the second quarter, 71 percent higher year over year against $50.9 million (CAD 68.3 million) in the second quarter of 2022, according to its earnings release.
Ensign’s net income attributable to common shareholders for the six months ended June 30 was $10.8 million (CAD 14.5 million), compared to a net loss attributable to common shareholders of $16.1 million (CAD 21.6 million) for the same period in 2022. The company’s revenue for the six-month period was $683.2 million (CAD 916.8 million), an increase of 35 percent from $504.3 million (CAD 676.8 million) for the first half of 2022. The company’s adjusted EBITDA for the January-June 2-2023 period totaled $181.75 million (CAD 243.9 million), 76 percent higher than the adjusted EBITDA of $103.1 million (CAD 138.3 million) for the same period in 2022.
For the second quarter, Ensign noted that 64 percent of its revenue came from the USA, with 19 percent and 17 percent coming from Canada and international operations, respectively.
In the first six months of the year, Ensign said it transferred nine, four, and two under-utilized drilling rigs to its Canadian, USA, and international operations reserve fleet, respectively. The company also transferred one drilling rig from the USA to Canada and transferred one drilling rig from the reserve fleet to the marketed fleet in the USA.
“The outlook for oilfield services continues to be constructive despite the recent volatility in global crude oil and natural gas commodity prices and uncertain global economic conditions”, Ensign said in the release. “Global inflationary concerns continue to prompt central banks to tighten monetary policies. Increasing interest rates, largely resulting from efforts to quell rising inflation, have contributed to uncertainty for global economies related to recession risk and economic growth. These factors continue to impact global energy commodity prices and add uncertainty to the macro-economic outlook over the short-term.”
“Furthermore, the recent decline in the US rig count has contributed to activity uncertainty and rig rate fluctuations over the short term. However, despite these short-term headwinds, demand for crude oil continues to increase year-over-year and OPEC+ nations continue to moderate supply to respond to market conditions”, Ensign concluded.
Lower-Emission Rigs
In its recently published 2022 sustainability report, Ensign highlighted that it implemented 20 “environmentally friendly solutions” to its marketed fleet, an increase of 26 percent from last year’s report and including 12 highline power solutions, one bi-fuel solution, and seven natural gas generator packages, the company said.
Ensign said that it achieved a 25 percent reduction in greenhouse gas emissions by using bi-fuel power, or a combination of diesel and natural gas. Meanwhile, a switch to natural gas-powered drilling rigs resulted in a 45 percent decrease in greenhouse gas emissions. Ensign currently has 44 bi-fuel-powered rigs and eight natural-gas-powered rigs, the company said in the report.
Ensign has five rigs equipped with battery energy storage systems that allow operation with hybrid power, resulting in a reduction of emissions by 55 percent. Of the 232 rigs the company markets globally, approximately 32 percent of the fleet is equipped with at least one emission-reducing technology or emission-friendly fuel, and 17 rigs are equipped with more than one solution, the report said.
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