Ensign Energy Services reports 2026 second-quarter results

Canada NewsWire

CALGARY, AB , Aug. 7, 2026 /CNW/ --

FINANCIAL HIGHLIGHTS (Unaudited, in thousands of Canadian dollars, except per common share data)

Revenue for the second quarter of 2026 was $397.3 million, an seven percent increase from the second quarter of 2025 revenue of $372.4 million.

Revenue for the second quarter of 2026 by geographic area: Canada - $104.7 million, 26 percent of total;

United States - $209.1 million, 53 percent of total; and

International - $83.5 million, 21 percent of total.

Adjusted EBITDA for the second quarter of 2026 was $85.8 million, a six percent increase from Adjusted EBITDA of $81.4 million for the second quarter of 2025.

Funds flow from operations for the second quarter of 2026 increased 15 percent to $83.0 million from $72.5 million in the second quarter of the prior year.

Net loss attributable to common shareholders for the second quarter of 2026 was $13.1 million, down from net loss attributed to common shareholders of $26.4 million for the second quarter of 2025.

During the second quarter of 2026, $30.0 million of debt was repaid and a total of $37.0 million was repaid during the first half of 2026. The Company expects total debt repayments for the year of approximately $60.0 million. If industry conditions change, this target could be increased or decreased

Interest expense decreased by 13 percent to $16.1 million from $18.6 million. The decrease is the result of lower debt levels, effective interest rates and a positive two percent translation effect on converting USD denominated interest expense.

OPERATING HIGHLIGHTS (Unaudited)

Canadian drilling recorded 2,667 operating days in the second quarter of 2026, a seven percent increase from 2,494 operating days in the second quarter of 2025. Canadian well servicing recorded 12,553 operating hours in the second quarter of 2026, a five percent increase from 11,987 operating hours in the second quarter of 2025.

United States drilling recorded 3,088 operating days in the second quarter of 2026, a five percent increase from 2,943 operating days in the second quarter of 2025. United States well servicing recorded 25,295 operating hours in the second quarter of 2026, a two percent decrease from 25,747 operating hours in the second quarter of 2025.

International drilling recorded 1,246 operating days in the second quarter of 2026, a 15 percent increase from 1,081 operating days recorded in the second quarter of 2025.

FINANCIAL POSITION HIGHLIGHTS

CAPITAL EXPENDITURE HIGHLIGHTS

Net purchases of property and equipment for the second quarter of 2026 totaled $58.1 million, consisting of $25.4 million in upgrade capital and $41.4 million in maintenance capital, offset by disposition proceeds of $8.7 million. Maintenance capital expenditures for 2026 are targeted to be approximately $162.0 million, with selective upgrade capital of approximately $95.8 million, of which $68.6 million is customer funded. The Company continues to consider rig relocation or upgrade projects in response to customer demand and under appropriate contract terms, which may impact capital expenditures.

On July 21, 2026, the Company announced that it has entered into an agreement with the shareholders of Citadel Drilling Ltd. ("CDL") for the Company to acquire, subject to certain closing conditions, all of the issued and outstanding shares of CDL for consideration of US$65 million, subject to closing adjustments.

This news release contains "forward-looking information and statements" within the meaning of applicable securities legislation. For a full disclosure of the forward-looking information and statements and the risks to which they are subject, see the "Advisory Regarding Forward-Looking Statements" later in this news release. This news release contains references to Adjusted EBITDA, Adjusted EBITDA per common share and working capital. These measures do not have any standardized meaning prescribed by IFRS Accounting Standards ( "IFRS" ) and accordingly, may not be comparable to similar measures used by other companies. The non-GAAP measures included in this news release should not be considered as an alternative to, or more meaningful than, the IFRS measures from which they are derived or to which they are compared. See "Non-GAAP Measures" later in this news release.

OVERVIEW

Revenue for the second quarter of 2026 was $397.3 million, an seven percent increase from $372.4 million in revenue for the second quarter of 2025. Revenue for the six months ended June 30, 2026, was $815.4 million, an increase of one percent from revenue for the six months ended June 30, 2025, of $808.9 million.

Adjusted EBITDA totaled $85.8 million ($0.46 per common share) in the second quarter of 2026, six percent higher than Adjusted EBITDA of $81.4 million ($0.44 per common share) in the second quarter of 2025. For the six months ended June 30, 2026, Adjusted EBITDA totaled $180.7 million ($0.98 per common share), two percent lower than Adjusted EBITDA of $183.7 million ($1.00 per common share) in the first six months ended June 30, 2025.

Net loss attributable to common shareholders for the second quarter of 2026 was $13.1 million ($0.07 per common share) compared to a net loss attributable to common shareholders of $26.4 million ($0.14 per common share) for the second quarter of 2025. Net loss attributable to common shareholders for the six months ended June 30, 2026, was $24.2 million ($0.13 per common share), compared to a net loss attributable to common shareholders of $22.7 million ($0.12 per common share) for the six months ended June 30, 2025.

Funds flow from operations increased 15 percent to $83.0 million ($0.45 per common share) in the second quarter of 2026 compared to $72.5 million ($0.39 per common share) in the second quarter of the prior year. Funds flow from operations increased one percent to $171.0 million ($0.93 per common share) for the six months ended June 30, 2026, compared to $169.1 million ($0.92 per common share) for the six months ended June 30, 2025.

The oilfield services sector maintains a generally constructive outlook as activity has improved year over year. With the political and security situation in the Middle East, the disruption of shipping within the Strait of Hormuz, the continuing conflict between the Russian Federation and Ukraine and the actions of the United States in Venezuela, the expectation is these factors and their continued development will have a direct effect on the industry. To date, oil and natural gas producers continue to moderate their capital spend, remain committed to cash flow generation and maintaining current production levels. Furthermore, the impact of uncertainty around the global economy and tariff policies adopted by the United States administration and the implications from such policies continue to impact operating activity.

The Company's operating days were higher for the six months ended June 30, 2026, when compared with the same periods in 2025 as operations were positively impacted by the above-mentioned uncertainty in the global economy and volatility in the crude oil and natural gas commodity pricing.

The average United States dollar exchange rate was $1.38 for the first half of 2026 (2025 - $1.41), lower than the first half of 2025. The lower exchange rate increased the net loss for the three and six months ended June 30, 2026, with the negative foreign exchange translation on USD denominated earnings.

The Company's working capital as at June 30, 2026, was $72.6 million, compared to working capital of $89.6 million as at December 31, 2025.

The Company's available liquidity, consisting of cash and available borrowings under its $950.0 million revolving credit facility (the "Credit Facility" ), was $62.2 million as at June 30, 2026 (December 31, 2025: $51.8 million).

REVENUE AND OILFIELD SERVICES EXPENSE

Revenue for the three months ended June 30, 2026, totaled $397.3 million, an increase of seven percent from the three months ended June 30, 2025 of $372.4 million. Revenue for the six months ended June 30, 2026, totaled $815.4 million, a one percent increase from the six months ended June 30, 2025 of $808.9 million.

The increase in total revenue during the first half of 2026 was primarily due to the higher operating activity. Offsetting the increase is a two percent negative foreign exchange translation of converting USD denominated revenue.

CANADIAN OILFIELD SERVICES

Revenue increased four percent to $104.7 million for the three months ended June 30, 2026, from $100.8 million for the three months ended June 30, 2025. The Company recorded revenue of $240.4 million in Canada for the six months ended June 30, 2026, a decrease of five percent from $252.8 million recorded for the six months ended June 30, 2025.

Canadian revenue accounted for 26 percent of the Company's total revenue in the second quarter of 2026 (2025 - 27 percent) and 29 percent (2025 - 31 percent) for the first half of 2026.

The Company's Canadian drilling operations recorded 2,667 operating days in the second quarter of 2026, compared to 2,494 operating days for the second quarter of 2025, an increase of seven percent. For the six months ended June 30, 2026, the Company recorded 6,075 operating days compared to 6,497 days for the six months ended June 30, 2025, a decrease of six percent. Canadian well servicing hours increased by five percent to 12,553 operating hours in the second quarter of 2026 compared to 11,987 operating hours in the corresponding period of 2025. For the six months ended June 30, 2026, Canadian well servicing hours increased by seven percent totaling 25,992 compared to 24,324 in the corresponding period of 2025.

The financial results for the Company's Canadian operations for the second quarter of 2026 were higher, compared to the second quarter of 2025, consistent with the increase in operating activity. The Canadian operations continue to see growth opportunities as demand for more reliable sources of energy are being sought, resulting from the political unrest around the world.

During the first half of 2026, the Company transferred 12 under-utilized Canadian drilling rigs into its reserve fleet.

UNITED STATES OILFIELD SERVICES

The Company's United States operations recorded revenue of $209.1 million in the second quarter of 2026, an increase of six percent from the $197.2 million recorded in the corresponding period of the prior year. During the six months ended June 30, 2026, revenue of $415.9 million was recorded, an increase of three percent from the $403.0 million recorded in the corresponding period of the prior year.

The Company's United States operations accounted for 53 percent of the Company's revenue in the second quarter of 2026 (2025 - 53 percent) and 51 percent of the Company's revenue in the first half of 2026 (2025 - 50 percent).

Drilling rig operating days increased by five percent to 3,088 operating days in the second quarter of 2026 from 2,943 operating days in the second quarter of 2025 and increased by 10 percent to 6,280 operating days in the first half of 2026 from 5,715 operating days in the first half of 2025. United States well servicing recorded 25,295 operating hours in the second quarter of 2026 which was a two percent decrease from 25,747 operating hours recorded in the second quarter of 2025. For the first half of 2026, well servicing activity decreased by five percent to 47,638 operating hours from 49,929 operating hours in the first half of 2025.

The financial results for the Company's United States operations were positively impacted by the increase in overall operating activity. Offsetting the increase is the two percent negative USD translation difference.

During the first half of 2026, the Company transferred one under-utilized United States drilling rig into its reserve fleet.

INTERNATIONAL OILFIELD SERVICES

The Company's international operations recorded revenue of $83.5 million in the second quarter of 2026, a 12 percent increase from the $74.4 million recorded in the corresponding period of the prior year. International revenues for the six months ended June 30, 2026, increased four percent to $159.0 million from $153.1 million recorded for the six months ended June 30, 2025.

The Company's international operations contributed 21 percent of the total revenue in the second quarter of 2026 (2025 - 20 percent) and 20 percent of the Company's revenue in the second quarter of 2026 (2025 - 19 percent).

International operating days for the three months ended June 30, 2026, totaled 1,246 operating days, an increase of 15 percent from 1,081 operating days in the same period of 2025. For the six months ended June 30, 2026, international operating days totaled 2,412 operating days compared to 2,230 operating days for the six months ended June 30, 2025, an increase of eight percent.

Financial results from international operations increased as a result of the increase in operating activity. Offsetting the increase is the two percent negative USD translation difference.

During the first half of 2026, the Company transferred two under-utilized international drilling rigs into its reserve fleet.

DEPRECIATION

Depreciation expense totaled $87.6 million for the second quarter of 2026 compared with $82.8 million for the second quarter of 2025, a six percent increase. Depreciation expense for the first half of 2026 increased by five percent, to $172.7 million compared with $164.7 million for the same period of 2025. The increase in depreciation is due to more assets entering service following additional capital spending. Offsetting the increase is the positive two percent translation effect on converting depreciation on USD denominated assets.

GENERAL AND ADMINISTRATIVE

General and administrative expense increased eight percent to $13.9 million (3.5 percent of revenue) for the second quarter of 2026 compared to $12.8 million (3.4 percent of revenue) for the second quarter of 2025. For the six months ended June 30, 2026, general and administrative expense totaled $28.6 million (3.5 percent of revenue) compared to $27.9 million (3.4 percent of revenue) for the six months ended June 30, 2025, a three percent increase. General and administrative expenses increased due to the annual wage increase to various employees and non-recurring expenses incurred in the current period. Offsetting the increase is the positive two percent translation effect of converting USD denominated expenses.

FOREIGN EXCHANGE AND OTHER

Included in this amount is the impact of foreign currency fluctuations in the Company's subsidiaries that have functional currencies other than the Canadian dollar.

INTEREST EXPENSE

Interest expense was incurred on the Company's Credit Facility, Convertible Debentures (defined below), capital lease and other obligations.

Interest expense decreased by 26 percent for the first half of 2026 compared to the same period of 2025, as a result of lower debt levels, effective interest rates, one-time recoveries and a positive two percent translation effect on converting USD denominated interest expense.

INCOME TAXES (RECOVERY)

FUNDS FLOW FROM OPERATIONS AND WORKING CAPITAL

During the three months ended June 30, 2026, the Company generated funds flow from operations of $83.0 million ($0.45 per common share) compared to funds flow from operations of $72.5 million ($0.39 per common share) for the three months ended June 30, 2025, an increase of 15 percent. For the six months ended June 30, 2026, the Company generated funds flow from operations of $171.0 million ($0.93 per common share), an increase of one percent from $169.1 million ($0.92 per common share) for the six months ended June 30, 2025. The increase in funds flow from operations for the six months ended June 30, 2026, compared to the same period of 2025, is largely due to the increase in operating activity year over year. Offsetting the increase is the negative two percent translation effect on converting USD denominated earnings.

At June 30, 2026, the Company's working capital surplus was $72.6 million, compared to a working capital of $89.6 million at December 31, 2025.

The Company's existing bank facility provides for total borrowings of $950.0 million, of which $47.0 million was undrawn and available as at June 30, 2026 (December 31, 2025: $35.6 million).

INVESTING ACTIVITIES

Net purchases of property and equipment for the second quarter of 2026 totaled $58.1 million (2025 - $49.2 million). Net purchases of property and equipment during the first six months of 2026 totaled $122.9 million (2025 - $86.0 million). The purchase of property and equipment for the first half of 2026 consists of $39.8 million in upgrade capital and $92.3 million in maintenance capital.

FINANCING ACTIVITIES

As at June 30, 2026, the amount of available borrowings under the Credit Facility was $47.0 million.

On September 29, 2025, the Company amended and restated its existing credit agreement with its syndicate of lenders, which provides a revolving Credit Facility. The amendments include an extension to the maturity date of the $950.0 million Credit Facility to September 29, 2028.

The amended and restated Credit Facility provides the Company with continued access to revolver capacity in a dynamic industry environment.

The Company's amended and restated credit agreement includes a US $50.0 million secured Letter of Credit Facility. Furthermore, the Company has an additional US $25.0 million unsecured Letter of Credit Facility. As at June 30, 2026, the amount available was US $26.6 million on the Letter of Credit Facilities.

On December 31, 2024, the Company issued a non-brokered private placement of unsecured, subordinated convertible debentures ( "Convertible Debentures" ) for aggregate gross proceeds of $25.0 million. The Convertible Debentures bear interest from the date of closing at 7.5% per annum, payable semi-annually in arrears, on April 1 and October 1 each year. The Convertible Debentures will mature on January 31, 2029, and have a conversion price of $3.50 per common share.

If, on and after March 31, 2028, the closing price of the Company's common shares on the Toronto Stock Exchange exceeds 125% of the Conversion Price for at least 30 consecutive trading days, the Convertible Debentures may be redeemed by the Company for cash on a pro rata basis, in whole or in part from time to time, on not more than 90 days and not less than 60 days prior notice, at a redemption price equal to the outstanding principal amount of the Convertible Debentures plus accrued and unpaid interest thereon (if any), up to, but excluding, the date of redemption.

The liability component of the Convertible Debentures was recognized initially at fair value and revalued quarterly using a similar liability that does not have an equity conversion option, which was calculated based on an estimated market interest rate of 7.6%.

There was no material difference between the principal amount of the Convertible Debentures and the fair value of the liability component.

The Convertible Debentures include $20.5 million issued to management and directors of the Company.

The current capital structure of the Company consisting of the Credit and the Convertible Debentures, allows the Company to utilize funds flow generated to reduce debt in the near term with greater flexibility than a more non-callable weighted capital structure.

Covenants

The following is a list of the Company's currently applicable covenants pursuant to the Credit Facility and the associated calculations as at June 30, 2026:

As at June 30, 2026, the Company was in compliance with all covenants related to the Credit Facility.

The Credit Facility

The amended and restated credit agreement, a copy of which is available on SEDAR+, provides the Company with its Credit Facility and includes requirements that the Company comply with certain covenants including a Consolidated Net Debt to Consolidated EBITDA ratio, a Consolidated EBITDA to Consolidated Interest Expense ratio and a Consolidated Net Senior Debt to Consolidated EBITDA ratio.

OUTLOOK

Industry Overview

The outlook for oilfield services is entering a period of heightened volatility and selective strength, shaped by a sharp near‑term supply shock, diverging demand outlooks, and unusually wide uncertainty around the duration of Middle East disruptions. While oil prices have surged in the short term, the medium‑term trajectory for oilfield services will depend on price durability, geopolitics, and capital discipline by producers.

With the recent events, producers continue to demonstrate capital discipline, resulting in relatively steady drilling and completion activity; however, the Company has seen additional inquiries from customers. Canadian activity remains resilient, supported by improved market access following the completion of the Trans Mountain Pipeline expansion in 2024. In addition, the start-up of LNG Canada in mid-2025 is expected to support longer-term natural gas production growth and infrastructure-led investment in Western Canada.

In the present environment, the Company remains committed to disciplined capital allocation, driving free cash flow generation, and debt repayment. The Company has targeted approximately $60.0 million in debt reduction for 2026. If industry conditions change, these targets may be increased or decreased.

The Company has announced that it has entered into an agreement with the shareholders of Citadel Drilling Ltd. ("CDL") for the Company to acquire, subject to certain closing conditions, all of the issued and outstanding shares of CDL for consideration of US$65 million, subject to closing adjustments. The CDL acquisition would expand the Company's United States Permian operations with six high-spec drilling rigs, along with a complement of managed pressure drilling units.

The Company has budgeted maintenance capital expenditures for 2026 of approximately $162.0 million and $95.8 million of selective upgrade capital, of which $68.6 million is customer funded. The upgrade capital is related to two rig upgrades in Canada, six in the United States, one in Australia, one in Venezuela and one completed rig in Oman. The Company continues to consider rig relocation or upgrade projects in response to customer demand and under appropriate contract terms, which may impact capital expenditures.

Canadian Activity

Canadian activity, representing 29 percent of total revenue in the first half of 2026, decreased in the second quarter of 2026 due to seasonal spring break-up. Canadian activity is expected to improve in the second half of 2026 due to positive market conditions. However, potential future trade tariffs imposed between Canada and the United States, including tariffs on crude oil, may impact Canadian activity over the near term.

As of August 6, 2026, of our 76 marketed Canadian drilling rigs, approximately 75 percent were engaged under term contracts of various durations. Approximately 65 percent of our contracted rigs have a remaining term of six months or longer, although they may be subject to early termination.

United States Activity

United States activity represents 51 percent of total Company revenue in the first half of 2026. Operating activity was slightly down in the second quarter in California. United States activity is expected to improve in the second half of 2026 following the closing of the CDL acquisition and due to positive market conditions.

As of August 6, 2026, of our 70 marketed United States drilling rigs, approximately 61 percent were engaged under term contracts of various durations. Approximately 19 percent of our contracted rigs have a remaining term of six months or longer.

International Activity

International activity, representing 20 percent of total revenue in the first half of 2026, improved slightly in the second quarter. Latin America is expected to remain steady with four rigs in third quarter, increasing to five rigs by the fourth quarter. The Middle East is expected to decline to five rigs in the third quarter and remain steady in the fourth quarter, though the current security situation in the region could impact operations. Australia is expected to increase to five rigs by the end of the third quarter and six rigs by the fourth quarter.

As of August 6, 2026, of our 25 marketed international drilling rigs, approximately 68 percent were engaged under term contracts of various durations. Approximately 65 percent of our contracted rigs have a remaining term of six months or longer, although they may be subject to early termination.

RISK AND UNCERTAINTIES

The Company is subject to numerous risks and uncertainties. A discussion of certain risks faced by the Company may be found under the "Risk Factors" section of the Company's Annual Information Form (" AIF ") and the "Risks and Uncertainties" section of the Company's Management's Discussion & Analysis (" MD&A ") for the year ended December 31, 2025, which are available under the Company's SEDAR+ profile at www.sedarplus.com .

The Company's risk factors and management of those risks have not changed substantially from those as disclosed in the AIF. Additional risks and uncertainties not presently known by the Company, or that the Company does not currently anticipate or deem material, may also impair the Company's future business operations or financial condition. If any such potential events described in the Company's AIF or otherwise actually occur, or described events intensify, overall business, operating results and the financial condition of the Company could be materially adversely affected.

CONFERENCE CALL

A conference call will be held to discuss the Company's second quarter 2026 results at 10:00 a.m. MST (12:00 p.m. EDT) on Friday, August 7, 2026. The conference call number is 1-888-510-2154. The conference ID is: 90522. A recording will be available until August 14, 2026 by dialing 1-888-660-6345 and entering the reservation number 90522#. A live webcast may be accessed through the Company's web site at www.ensignenergy.com/presentations/ .

Ensign Energy Services Inc. is an international oilfield services contractor and is listed on the Toronto Stock Exchange.

Ensign Energy Services Inc. Consolidated Statements of Financial Position

Ensign Energy Services Inc. Consolidated Statements of Loss

Ensign Energy Services Inc. Consolidated Statements of Cash Flows

Ensign Energy Services Inc.

Non-GAAP Measures

Adjusted EBITDA, Adjusted EBITDA per common share, working capital and Consolidated EBITDA. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and accordingly, may not be comparable to similar measures used by other companies. The non-GAAP measures included in this news release should not be considered as an alternative to, or more meaningful than, the IFRS measure from which they are derived or to which they are compared.

Adjusted EBITDA is used by management and investors to analyze the Company's profitability based on the Company's principal business activities prior to how these activities are financed, how assets are depreciated, amortized and how the results are taxed in various jurisdictions. Additionally, in order to focus on the core business alone, amounts are removed related to foreign exchange, share-based compensation expense, the sale of assets and fair value adjustments on financial assets and liabilities, as the Company does not deem these to relate to its core drilling and well services business. Adjusted EBITDA is not intended to represent net loss as calculated in accordance with IFRS.

Consolidated EBITDA

Consolidated EBITDA, as defined in the Company's Credit Facility agreement, is used in determining the Company's compliance with its covenants. The Consolidated EBITDA is substantially similar to Adjusted EBITDA. Consolidated EBITDA is calculated on a rolling twelve-month basis.

Working Capital

Working capital is defined as current assets less current liabilities as reported on the consolidated statements of financial position.

ADVISORY REGARDING FORWARD-LOOKING STATEMENTS

Certain statements herein constitute forward-looking statements or information (collectively referred to herein as "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements generally can be identified by the words "believe", "anticipate", "expect", "plan", "estimate", "target", "continue", "could", "intend", "may", "potential", "predict", "should", "will", "objective", "project", "forecast", "goal", "guidance", "outlook", "effort", "seeks", "schedule", "contemplates" or other expressions of a similar nature suggesting future outcome or statements regarding an outlook.

Disclosure related to expected future commodity pricing or trends, revenue rates, equipment utilization or operating activity levels, operating costs, capital expenditures and other prospective guidance provided herein including, but not limited to, information provided in the "Funds Flow from Operations and Working Capital" section regarding the Company's expectation that funds generated by operations combined with current and future credit facilities will support current operating and capital requirements, information provided in the "Financial Instruments" section regarding Venezuela and information provided in the "Outlook" section regarding the general outlook for 2026 and beyond, are examples of forward-looking statements.

Forward-looking statements are not representations or guarantees of future performance and are subject to certain risks and unforeseen results. The reader should not place undue reliance on forward-looking statements as there can be no assurance that the plans, initiatives, projections, anticipations or expectations upon which they are based will occur. The forward-looking statements are based on current assumptions, expectations, estimates and projections about the Company and the industries and environments in which the Company operates, which speak only as of the date such statements were made or as of the date of the report or document in which they are contained. These assumptions include, among other things: the fluctuation in commodity prices which may pressure customers to modify their capital programs; the status of current negotiations with the Company's customers and vendors; customer focus on safety performance; royalty regimes and effects of regulation by government agencies; existing term contracts that may not be renewed or are terminated prematurely; the Company's ability to provide services on a timely basis and successfully bid on new contracts; successful integration of acquisitions; future operating costs; the general stability of the economic and political environments in the jurisdictions where we operate; tariffs, economic sanctions, inflation, interest rate and exchange rate expectations; and impacts of geopolitical events such as the hostilities in the Middle East and between Ukraine and the Russian Federation, and the global community responses thereto; that the Company will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; that the Company's conduct and results of operations will be consistent with its expectations; and other matters.

The forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Such risk factors include, among others: general economic and business conditions which will, among other things, impact demand for and market prices of the Company's services and the ability of the Company's customers to pay accounts receivable balances; volatility of and assumptions regarding commodity prices; foreign exchange exposure; fluctuations in currency and interest rates; inflation; economic conditions in the countries and regions in which the Company conducts business; political uncertainty and civil unrest; the Company's ability to implement its business strategy; impact of competition and industry conditions; risks associated with long-term contracts; force majeure events; artificial intelligence development and implementation; cyber-attacks; determinations by the Organization of Petroleum Exporting Countries (" OPEC ") and other countries (OPEC and various other countries are referred to as " OPEC +") regarding production levels; loss of key customers; litigation risks, including the Company's defence of lawsuits; risks associated with contingent liabilities and potential unknown liabilities; availability and cost of labour and other equipment, supplies and services; business interruption and casualty losses; the Company's ability to complete its capital programs; operating hazards and other difficulties inherent in the operation of the Company's oilfield services equipment; availability and cost of financing and insurance; access to credit facilities and debt capital markets; availability of sufficient cash flow to service and repay its debts; impairment of capital assets; the Company's ability to amend or comply with covenants under the credit facility and other debt instruments; actions by governmental authorities; impact of and changes to laws and regulations impacting the Company and the Company's customers, and the expenditures required to comply with them (including safety and environmental laws and regulations and the impact of climate change initiatives on capital and operating costs); safety performance; environmental contamination; shifting interest to alternative energy sources; environmental activism; the adequacy of the Company's provision for taxes; tax challenges; the impact of, and the Company's response to future pandemics; workforce and reliance on key management; technology; cybersecurity risks; seasonality and weather risks; risks associated with acquisitions and ability to successfully integrate acquisitions; risks associated with internal controls over financial reporting; the impact of the ongoing hostilities in the Middle East and between Ukraine and the Russian Federation and the global community responses thereto; the economic and tariff policies pursued by the United States administration, including the impact of recent United States Government pronouncements regarding imposition of global tariffs and potential curtailment of our customer's license to operate in Venezuela, which have recently reactivated our operations in the area, along with any retaliatory policies by other governments and other risks and uncertainties affecting the Company's business, revenues and expenses.

In addition, the Company's operations and levels of demand for its services have been, and at times in the future may be, affected by political risks and developments, such as tariffs, economic sanctions, expropriation, nationalization, or regime change, and by national, regional and local laws and regulations such as changes in taxes, royalties and other amounts payable to governments or governmental agencies, environmental protection regulations, its customers and its business, ongoing hostilities in the Middle East and between Ukraine and the Russian Federation, including recent developments in discussions regarding cessation of hostilities in Ukraine and pursuit of a resolution of the dispute, related potential future impact on the supply of oil and natural gas to Europe by Russia and the impact of global community responses to the ongoing conflicts, including the impact of shipping through the Red Sea and governmental energy policies, laws, rules or regulations that limit, restrict or impede exploration, development, production, transportation or consumption of hydrocarbons and/or incentivize development, production, transportation or consumption of alternative fuel or energy sources.

Should one or more of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results from operations may vary in material respects from those expressed or implied by the forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are interdependent upon other factors, and the Company's course of action would depend upon its assessment of the future considering all information then available. Unpredictable or unknown factors not discussed herein could also have material adverse effects on forward-looking statements.

Readers are cautioned that the lists of important factors contained herein are not exhaustive. For additional information on these and other factors that could affect the Company's business, operations or financial condition, refer to the "Risk Factors" section of the Company's Annual Information Form for the year ended December 31, 2025 available on SEDAR+ at www.sedarplus.ca .

The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Ensign Energy Services Inc.

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August 7, 2026 - 2:00 AM PDT

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