Total Energy Services Inc. press release

Total Energy Services Inc. Announces Q1 2026 Results

2026-05-12

TSX - Toronto Stock Exchange · Oil · Natural Gas · Canada · Corporate Finance

CALGARY, Alberta, May 12, 2026 (GLOBE NEWSWIRE) -- Total Energy Services Inc. (“Total Energy” or the “Company”) (TSX:TOT) announces its consolidated financial results for the three months ended March 31, 2026.

Financial Highlights ($000’s except per share data, unaudited)

| | | Three months ended March 31 | | | | | | | | | | | | 2026 | | | 2025 | | Change | | | Revenue | | $ | 314,896 | | $ | 251,909 | | 25 | % | | Operating income | | | 27,129 | | | 26,063 | | 4 | % | | EBITDA(1) | | | 55,158 | | | 50,488 | | 9 | % | | Cashflow | | | 54,290 | | | 44,934 | | 21 | % | | Net income | | | 24,222 | | | 18,952 | | 28 | % | | Attributable to shareholders | | | 24,137 | | | 18,966 | | 27 | % | | | | | | | | | | | | | Per Share Data (Diluted) | | | | | | | | | | | EBITDA(1) | | $ | 1.49 | | $ | 1.31 | | 14 | % | | Cashflow | | $ | 1.46 | | $ | 1.16 | | 26 | % | | | | | | | | | | | | | Attributable to shareholders: | | | | | | | | | | | Net income | | $ | 0.65 | | $ | 0.49 | | 33 | % | | | | | | | | | | | | | Common shares (000’s)(4) | | | | | | | | | | | Basic | | | 36,459 | | | 38,041 | | (4 | %) | | Diluted | | | 37,118 | | | 38,685 | | (4 | %) | | | | | | | | | | | | | | | March 31 | December 31 | | | | | | | | Financial Position at | | | 2026 | | | 2025 | | Change | | | Total Assets | | $ | 1,069,786 | | $ | 1,000,102 | | 7 | % | | Long-Term Debt and Lease Liabilities (excluding current portion) | | | 64,507 | | | 75,236 | | (14 | %) | | Working Capital(2) | | | 113,404 | | | 108,023 | | 5 | % | | Net Debt(1) | | | - | | | - | | - | | | Shareholders’ Equity | | | 623,554 | | | 601,311 | | 4 | % | | | | | | | | | | | |

Notes 1 through 4 please refer to the Notes to the Financial Highlights set forth at the end of this release.

Total Energy’s results for the three months ended March 31, 2026 reflect continued strong North American demand for natural gas compression and process equipment and the deployment of upgraded drilling and service rigs in Australia and Canada that more than offset a year over year decline in North American drilling and completion activity. Negatively impacting first quarter financial results was a $6.5 million year over year increase in share-based compensation expense due to the 52% increase in the Company’s share price during the first quarter of 2026. This was partially offset by a $2.9 million year over year increase on the gain on sale of property, plant and equipment following the sale of certain well servicing equipment in the United States in February 2026.

Contract Drilling Services (“CDS”)

| | | Three months ended March 31 | | | | | | | | | | | | 2026 | | | 2025 | | Change | | | Revenue | | $ | 97,178 | | $ | 91,087 | | 7 | % | | EBITDA(1) | | $ | 24,020 | | $ | 25,228 | | (5 | %) | | EBITDA(1)as a % of revenue | | | 25 | % | | 28 | % | (11 | %) | | Operating days(2) | | | 2,615 | | | 2,723 | | (4 | %) | | Canada | | | 1,545 | | | 1,889 | | (18 | %) | | United States | | | 115 | | | 144 | | (20 | %) | | Australia | | | 955 | | | 690 | | 38 | % | | Revenue per operating day(2), dollars | | $ | 37,162 | | $ | 33,451 | | 11 | % | | Canada | | | 28,386 | | | 27,245 | | 4 | % | | United States | | | 26,913 | | | 30,507 | | (12 | %) | | Australia | | | 52,594 | | | 50,659 | | 4 | % | | Utilization | | | 31 | % | | 29 | % | 7 | % | | Canada | | | 27 | % | | 28 | % | (4 | %) | | United States | | | 11 | % | | 13 | % | (15 | %) | | Australia | | | 62 | % | | 45 | % | 38 | % | | Rigs, average for period | | | 93 | | | 103 | | (10 | %) | | Canada | | | 64 | | | 74 | | (14 | %) | | United States | | | 12 | | | 12 | | - | | | Australia | | | 17 | | | 17 | | - | |

(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Operating days includes drilling and paid standby days.

First quarter CDS segment activity in 2026 was modestly lower than the first quarter of 2025. Reactivation of upgraded equipment at higher day rates in Australia and higher day rates received for upgraded Canadian equipment contributed to increased first quarter segment revenue. However, a year over year decline in North American first quarter drilling activity more than offset a significant increase in Australian rig utilization and resulted in lower first quarter segment EBITDA relative to 2025.

Rentals and Transportation Services (“RTS”)

| | | Three months ended March 31 | | | | | | | | | | | | 2026 | | | 2025 | | Change | | | Revenue | | $ | 19,467 | | $ | 23,024 | | (15 | %) | | EBITDA(1) | | $ | 6,494 | | $ | 8,426 | | (23 | %) | | EBITDA(1)as a % of revenue | | | 33 | % | | 37 | % | (11 | %) | | Revenue per utilized piece of equipment, dollars | | $ | 14,165 | | $ | 15,503 | | (9 | %) | | Pieces of rental equipment | | | 8,023 | | | 7,813 | | 3 | % | | Canada | | | 6,839 | | | 6,879 | | (1 | %) | | United States | | | 1,184 | | | 934 | | 27 | % | | Rental equipment utilization | | | 17 | % | | 19 | % | (11 | %) | | Canada | | | 14 | % | | 16 | % | (13 | %) | | United States | | | 37 | % | | 41 | % | (10 | %) | | Heavy trucks | | | 57 | | | 68 | | (16 | %) | | Canada | | | 37 | | | 47 | | (21 | %) | | United States | | | 20 | | | 21 | | (5 | %) |

(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release.

RTS segment revenue decreased in the first quarter of 2026 compared to 2025 due to lower North American drilling and completion activity and decreased revenue per utilized piece resulting from a change in the mix of equipment operating. The acquisition of 280 major rental pieces located in Oklahoma on June 10, 2025 mitigated the year over year decline in industry activity levels in the United States. First quarter segment EBITDA decreased compared to 2025 given this segment’s relatively high fixed cost structure and competitive market conditions that did not allow for price increases necessary to offset cost inflation.

Compression and Process Services (“CPS”)

| | | Three months ended March 31 | | | | | | | | | | | | 2026 | | | 2025 | | Change | | | Revenue | | $ | 164,639 | | $ | 106,216 | | 55 | % | | EBITDA(1) | | $ | 21,807 | | $ | 15,740 | | 39 | % | | EBITDA(1)as a % of revenue | | | 13 | % | | 15 | % | (13 | %) | | Horsepower of equipment on rent at period end | | | 31,970 | | | 43,558 | | (27 | %) | | Canada | | | 17,320 | | | 14,468 | | 20 | % | | United States | | | 14,650 | | | 29,090 | | (50 | %) | | Rental equipment utilization during the period (HP)(2) | | | 70 | % | | 67 | % | 4 | % | | Canada | | | 69 | % | | 62 | % | 11 | % | | United States | | | 71 | % | | 74 | % | (4 | %) | | Sales backlog at period end, $ million | | $ | 446.9 | | $ | 265.4 | | 68 | % |

(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Rental equipment utilization is measured on a horsepower basis.

2026 first quarter CPS segment revenue was higher compared to 2025 due to increased North American fabrication sales and parts and service activity that was partially offset by lower compression rental fleet revenue in the United States following the sale of several active compression rental units in 2025. The year over year increase in first quarter segment EBITDA was due to increased fabrication and parts and service activity and improved fabrication margins although the decline in higher margin rental revenues resulted in a lower segment EBITDA margin compared to 2025. The quarter end fabrication sales backlog increased to $446.9 million compared to the $265.4 million backlog at March 31, 2025. Sequentially the quarter-end fabrication sales backlog increased by $0.2 million compared to the $446.7 million backlog at December 31, 2025.

Well Servicing (“WS”)

| | | Three months ended March 31 | | | | | | | | | | | | 2026 | | | 2025 | | Change | | | Revenue | | $ | 33,612 | | $ | 31,582 | | 6 | % | | EBITDA(1) | | $ | 11,135 | | $ | 5,306 | | 110 | % | | EBITDA(1)as a % of revenue | | | 33 | % | | 17 | % | 94 | % | | Service hours(2) | | | 30,342 | | | 29,068 | | 4 | % | | Canada | | | 16,281 | | | 15,056 | | 8 | % | | United States | | | 108 | | | 2,229 | | (95 | %) | | Australia | | | 13,953 | | | 11,783 | | 18 | % | | Revenue per service hour(2), dollars | | $ | 1,108 | | $ | 1,086 | | 2 | % | | Canada | | | 947 | | | 964 | | (2 | %) | | United States | | | 898 | | | 919 | | (2 | %) | | Australia | | | 1,297 | | | 1,275 | | 2 | % | | Utilization(3) | | | 40 | % | | 31 | % | 29 | % | | Canada | | | 37 | % | | 30 | % | 23 | % | | United States | | | 3 | % | | 21 | % | (86 | %) | | Australia | | | 54 | % | | 45 | % | 20 | % | | Rigs, average for period | | | 61 | | | 79 | | (23 | %) | | Canada | | | 49 | | | 55 | | (11 | %) | | United States | | | - | | | 12 | | (100 | %) | | Australia | | | 12 | | | 12 | | - | |

(1)See Note 1 of the Notes to the Financial Highlights set forth at the end of this release. (2)Service hours is defined as well servicing hours of service provided to customers and includes paid rig move and standby. (3)The Company reports its service rig utilization for its operational service rigs in North America based on service hours of 3,650 per rig per year to reflect standard 10 hour operations per day. Utilization for the Company’s service rigs in Australia is calculated based on service hours of 8,760 per rig per year to reflect standard 24 hour operations.

First quarter Well Servicing segment revenue increased in 2026 as compared to 2025 due to increased activity in Australia and Canada following the upgrade and reactivation of several service rigs over the past year. Increased revenue from Australian and Canadian operations was partially offset by lower WS segment revenue in the United States following the discontinuance of U.S. operations in January 2026. Segment EBITDA for the first quarter of 2026 was higher compared to 2025 due to the deployment of upgraded rigs in Australia and Canada and the cessation of operating losses in the United States.

Corporate

During the first quarter of 2026, Total Energy began to execute on its $87.4 million 2026 capital expenditure program with $20.7 million of capital expenditures that were primarily directed towards the upgrade of drilling and service rigs in Australia and Canada and the expansion of CPS segment fabrication capacity in the United States. Included in 2026 first quarter capital expenditures was approximately $8.5 million of the $24.5 million of capital commitments carried forward from 2025.

Total Energy exited the first quarter of 2026 with $113.4 million of positive working capital, including $91.4 million of cash. At March 31, 2026 there was $130.0 million of available credit under the Company’s $175.0 million of revolving bank credit facilities and the interest rate on the Company’s outstanding bank debt was 4.07%.

$6.5 million was returned to shareholders during the first quarter of 2026 by way of dividends and share repurchases. Bank debt was also reduced by $10.0 million during the quarter. Cash on hand exceeded bank debt by $46.4 million at March 31, 2026.

Outlook

Global economic and political uncertainty, commodity price volatility and producer capital discipline continued to weigh on North American drilling and completion activity during the first quarter of 2026. Offsetting this uncertainty were stable Australian industry conditions and continued strong North American demand for compression and process equipment. The CPS segment’s record $446.9 million fabrication sales backlog at March 31, 2026 provides visibility for the CPS segment’s fabrication business well into 2027 and current quoting activity remains strong. In January 2026 the Company ceased well servicing operations in the United States and substantially all of the operating equipment was sold in February. An agreement to sell the associated real estate has been entered into, with closing expected to occur by June 30, 2026.

The escalation of hostilities in the Middle East in February 2026 resulted in a substantial increase in global oil and LNG prices following supply disruptions. While capital discipline arising from a commitment to improving shareholder returns continued to restrain North American drilling and completion activity during the first quarter of 2026, should higher commodity prices persist, they are expected to provide a tailwind for increased North American industry activity. Relatively high natural gas prices in Australia continue to support stable industry conditions.

In early May, an upgraded service rig was reactivated in Australia, bringing the Company’s current Australian active rig count to 13 drilling rigs and eight service rigs. An active Australian drilling rig will be taken out of service during the third quarter for approximately two months to complete certain upgrades, following which it will commence operations under a new long term contract. A new Australian service rig is currently under construction and is scheduled to commence operations in the first quarter of 2027. In Canada, the upgrade of a second idle mechanical double drilling rig into a state of the art AC electric triple pad rig is underway and is expected to be completed by the first quarter of 2027. Demand for this style of drilling rig remains very strong and, similar to the first upgrade completed in November 2025, the Company will look to contract this rig closer to the completion date. Total Energy continues to evaluate several acquisition and equipment upgrade opportunities in North America and Australia and will pursue those which meet its investment criteria.

Conference Call

At 9:00 a.m. (Mountain Time) on May 13, 2026 Total Energy will conduct a conference call and webcast to discuss its first quarter financial results. Daniel Halyk, President & Chief Executive Officer, will host the conference call. A live webcast of the conference call will be accessible on Total Energy’s website at www.totalenergy.caby selecting “Webcasts”. Persons wishing to participate in the conference call may do so by calling (800) 715-9871 or (647) 932-3411. Those who are unable to listen to the call live may listen to a recording of it on Total Energy’s website. A recording of the conference call will also be available until June 12, 2026 by dialing (800) 770-2030 (passcode 1002576).

Selected Financial Information

Selected financial information relating to the three months ended March 31, 2026 and 2025 is included in this news release. This information should be read in conjunction with the condensed interim consolidated financial statements of Total Energy and the notes thereto as well as management’s discussion and analysis to be issued in due course and the Company’s 2025 Annual Report.

Consolidated Statements of Financial Position (in thousands of Canadian dollars)

| | | March 31 | December 31 | | | | | | | | 2026 | 2025 | | | | | | | | | (unaudited) | | (audited) | | | | Assets | | | | | | | | | Current assets: | | | | | | | | | Cash and cash equivalents | | $ | 91,373 | | $ | 59,637 | | | Accounts receivable | | | 178,473 | | | 165,991 | | | Inventory | | | 143,207 | | | 127,022 | | | Prepaid expenses and deposits | | | 22,555 | | | 18,268 | | | | | | 435,608 | | | 370,918 | | | | | | | | | | | | Property, plant and equipment | | | 630,125 | | | 625,131 | | | Goodwill | | | 4,053 | | | 4,053 | | | | | $ | 1,069,786 | | $ | 1,000,102 | | | | | | | | | | | | Liabilities & Shareholders' Equity | | | | | | | | | Current liabilities: | | | | | | | | | Accounts payable and accrued liabilities | | $ | 188,048 | | $ | 152,214 | | | Deferred revenue | | | 107,736 | | | 89,826 | | | Contingent consideration on business acquisition | | | 2,744 | | | 2,796 | | | Income taxes payable | | | 12,590 | | | 7,518 | | | Dividends payable | | | 4,405 | | | 3,635 | | | Current portion of lease liabilities | | | 6,681 | | | 6,906 | | | | | | 322,204 | | | 262,895 | | | | | | | | | | | | Long-term debt | | | 45,000 | | | 55,000 | | | | | | | | | | | | Lease liabilities | | | 19,507 | | | 20,236 | | | | | | | | | | | | Deferred income tax liability | | | 59,521 | | | 60,660 | | | | | | | | | | | | Shareholders' equity: | | | | | | | | | Share capital | | | 231,558 | | | 228,041 | | | Contributed surplus | | | 3,749 | | | 5,841 | | | Accumulated other comprehensive loss | | | (8,448 | ) | | (16,523 | ) | | Non-controlling interest | | | 462 | | | 377 | | | Retained earnings | | | 396,233 | | | 383,575 | | | | | | 623,554 | | | 601,311 | | | | | | | | | | | | | | $ | 1,069,786 | | $ | 1,000,102 | |

Consolidated Statements of Income (in thousands of Canadian dollars except per share amounts) (unaudited)

| | | Three months ended March 31 | | | | | | | | | | 2026 | | | 2025 | | | | | | | | | | | | Revenue | | $ | 314,896 | | $ | 251,909 | | | | | | | | | | | | Cost of services | | | 244,855 | | | 189,128 | | | Selling, general and administration | | | 13,434 | | | 13,968 | | | Other income | | | (834 | ) | | (308 | ) | | Share-based compensation | | | 6,614 | | | 108 | | | Depreciation | | | 23,698 | | | 22,950 | | | Operating income | | | 27,129 | | | 26,063 | | | | | | | | | | | | Gain on sale of property, plant and equipment | | | 4,331 | | | 1,475 | | | Finance costs, net | | | (786 | ) | | (1,468 | ) | | Net income before income taxes | | | 30,674 | | | 26,070 | | | | | | | | | | | | Current income tax expense | | | 8,001 | | | 4,614 | | | Deferred income tax expense (recovery) | | | (1,549 | ) | | 2,504 | | | Total income tax expense | | | 6,452 | | | 7,118 | | | | | | | | | | | | Net income | | $ | 24,222 | | $ | 18,952 | | | | | | | | | | | | Net income (loss) attributable to: | | | | | | | | | Shareholders of the Company | | $ | 24,137 | | $ | 18,966 | | | Non-controlling interest | | | 85 | | | (14 | ) | | | | | | | | | | | Income per share | | | | | | | | | Basic | | $ | 0.66 | | $ | 0.50 | | | Diluted | | $ | 0.65 | | $ | 0.49 | |

Consolidated Statements of Comprehensive Income (in thousands of Canadian dollars except per share amounts) (unaudited)

| | | Three months ended March 31 | | | | | | | | | | 2026 | | | 2025 | | | | | | | | | | | | Net income | | $ | 24,222 | | $ | 18,952 | | | | | | | | | | | | Foreign currency translation | | | 8,075 | | | 1,786 | | | | | | | | | | | | Total other comprehensive income for the period | | | 8,075 | | | 1,786 | | | | | | | | | | | | Total comprehensive income | | $ | 32,297 | | $ | 20,738 | | | | | | | | | | | | Total comprehensive income (loss) attributable to: | | | | | | | | | | | | | | | | | | Shareholders of the Company | | $ | 32,212 | | $ | 20,752 | | | Non-controlling interest | | | 85 | | | (14 | ) |

Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (unaudited)

| | | Three months ended March 31 | | | | | | | | | | 2026 | | | 2025 | | | | | | | | | | | | Cash provided by (used in): | | | | | | | | | | | | | | | | | | Operations: | | | | | | | | | Net income for the period | | $ | 24,222 | | $ | 18,952 | | | Add (deduct) items not affecting cash: | | | | | | | | | Depreciation | | | 23,698 | | | 22,950 | | | Share-based compensation | | | 6,614 | | | 108 | | | Gain on sale of property, plant and equipment | | | (4,331 | ) | | (1,475 | ) | | Finance costs, net | | | 786 | | | 1,468 | | | Foreign currency translation | | | 219 | | | 1,353 | | | Current income tax expense | | | 8,001 | | | 4,614 | | | Deferred income tax expense (recovery) | | | (1,549 | ) | | 2,504 | | | Income taxes paid | | | (3,370 | ) | | (5,540 | ) | | Cashflow | | | 54,290 | | | 44,934 | | | Changes in non-cash working capital items: | | | | | | | | | Accounts receivable | | | (12,483 | ) | | (15,228 | ) | | Inventory | | | (16,185 | ) | | (6,177 | ) | | Prepaid expenses and deposits | | | (4,287 | ) | | (1,614 | ) | | Accounts payable and accrued liabilities | | | 23,406 | | | 22,168 | | | Deferred revenue | | | 17,910 | | | 13,467 | | | Cash provided by operating activities | | | 62,651 | | | 57,550 | | | Investing: | | | | | | | | | Purchase of property, plant and equipment | | | (20,744 | ) | | (34,457 | ) | | Proceeds on disposal of property, plant and equipment | | | 5,713 | | | 2,492 | | | Changes in non-cash working capital items | | | 3,231 | | | 10,314 | | | Cash used in investing activities | | | (11,800 | ) | | (21,651 | ) | | Financing: | | | | | | | | | Repayment of long-term debt | | | (10,000 | ) | | (528 | ) | | Repayment of lease liabilities | | | (1,857 | ) | | (1,902 | ) | | Dividends to shareholders | | | (3,635 | ) | | (3,429 | ) | | Repurchase of common shares | | | (2,883 | ) | | (2,019 | ) | | Shares issued on exercise of stock options | | | 87 | | | - | | | Interest paid | | | (827 | ) | | (1,359 | ) | | Cash used in financing activities | | | (19,115 | ) | | (9,237 | ) | | | | | | | | | | | Change in cash and cash equivalents | | | 31,736 | | | 26,662 | | | | | | | | | | | | Cash and cash equivalents, beginning of period | | | 59,637 | | | 38,419 | | | | | | | | | | | | Cash and cash equivalents, end of period | | $ | 91,373 | | $ | 65,081 | |