/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, AB, March 25, 2026 /CNW/ - (TSX: ACX) ACT Energy Technologies Ltd, formerly Cathedral Energy Services Ltd., (the "Company" or "ACT") news release contains "forward-looking statements" within the meaning of applicable Canadian securities laws. For a full disclosure of forward-looking statements and the risks to which they are subject, see the "Forward-Looking Statements" section in this news release. This news release contains references to Adjusted gross margin, Adjusted gross margin %, Adjusted EBITDAS, Adjusted EBITDAS margin %, Free cash flow, Working capital, Net debt and Net capital expenditures. These terms do not have standardized meanings prescribed under International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and may not be comparable to similar measures used by other companies. See the "Non-GAAP Measures" section in this news release for definitions and tabular calculations.
2025 KEY HIGHLIGHTS
The Company achieved the following 2025 results and highlights:
-- Strong improvement in Adjusted gross margins(1) to 30% (2024 - 27%)
despite a decline in revenues to $474.9 million (2024 - $571.8 million).
Positively affecting margins is a reduction of third-party rental costs
from the utilization of internally supplied MWD(2) systems.
-- Sustained Adjusted EBITDAS(1) margins despite lower U.S. activity
contributing to a reduction in Adjusted EBITDAS to $76.3 million in 2025
(2024 - $93.8 million). Sustained margin levels were primarily
attributable to the lower third-party rental costs as a result of the
internal deployment of measurement-while-drilling ("MWD") tools. The
Company continues to improve the overall resiliency of the business
through optimization of its cost structure.
-- The Company focused allocation of excess available cash generated during
2025 toward the balance sheet:
-- Exiting the year with a significantly reduced leverage profile,
Net debt(1) of $53.6 million compared to $77.7 million as at
December 31, 2024.
-- Repurchasing 1,907,386 common shares under the normal course
issuer bid ("NCIB") for a total purchase price of $10.2 million at
an average cost of $5.32 per common share. Subsequent to December
31, 2025, the Company purchased 280,072 common shares for a total
purchase price of $1.6 million, at an average purchase cost of
$5.76 per common share.
-- Further improving the ACT's strategic positioning in the U.S., during the
first quarter of 2026 the Company:
-- Acquired all the assets of Stryker Energy Directional Services,
LLC for cash, shares and through the issuance of a promissory
note. The total compensation amount was $32.9 million.
-- Entered into an agreement on March 9, 2026 to acquire the
directional drilling services business of SB Directional Services
for total consideration of $64.3 million in cash and shares. The
transaction is expected to close in early April 2026.
-- Overall in 2025, net income of $15.6 million compared to $57.9 million in
2024. The decrease is mainly due to decreased revenue from reduced U.S.
operational activity, magnified by a change in the effect of foreign
exchange of $14.9 million (primarily on inter-company lending activities),
provisions for legacy sales and use tax audits of $4.8 million and
inventory provisions of $2.5 million.
____________________________________
(1) As defined in the 'Non-GAAP measures' section of this
news release
(2) As defined in the 'Common industry terms' section
of this news release
PRESIDENT'S MESSAGE
To my fellow Shareholders:
"The resiliency in our business model was on full display in the fourth quarter, as we delivered 4Q 2025 Adjusted EBITDAS(1() of $17.4mm - nearly in line with the fourth quarter of 2024 - despite 15% lower revenue from reduced activity levels. Continued progress in our organic build out and deployment of MWD(2() technology, together with higher Rotary Steerable ("RSS") utilization, also supported the business, driving significantly higher Adjusted gross margin(1) and Adjusted EBITDAS margin percentages(1) versus the fourth quarter one year ago."
"In Canada, we increased revenue per operating day in the fourth quarter as we continued to expand our footprint in higher-value RSS work for customers. As is typical for the season, activity tapered near year-end due to the holiday shutdown and, for some customers, budget exhaustion."
"While activity in the U.S. slowed during 2025, we exited the year with our U.S. business strategically positioned for future growth. Our experience drilling longer laterals and increasingly complex wellbores drove higher demand for advanced solutions, with rotary steerable activity representing more than 20% of total operating days in the fourth quarter. We believe our breadth of capabilities, particularly our ability to service the higher-value segment of the market, positions us well to benefit as customers increasingly focus on improved drilling performance, greater efficiencies, and more complex well designs."
"As we enter 2026, our capital allocation strategy remains centered on long-term value creation and strengthening business resilience. Our plan is to:
-- Invest selectively in high-return, organic growth opportunities that
improve customer productivity and support continued margin expansion.
-- Return capital to shareholders through our Normal Course Issuer Bid
(NCIB) share repurchase program.
-- Position the Company with modest leverage to preserve flexibility for
strategic acquisitions, as demonstrated by the recently completed Stryker
Acquisition and proposed SB Acquisition.
"With this disciplined and balanced approach to capital allocation, we believe we will continue to build an increasingly durable business model - one that optimizes shareholder returns over the long term," stated Tom Connors, ACT President and Chief Executive Officer.
____________________________________
(1) As defined in the 'Non-GAAP measures' section of this
news release
(2) As defined in the 'Common industry terms' section
of this news release
FINANCIAL HIGHLIGHTS
(stated in thousands Three months ended December Year ended December 31,
of Canadian dollars, 31,
except net
income per common
share amounts)
2025 2024 2025 2024
Revenues $ 109,301 $ 128,083 $ 474,928 $ 571,785
Gross margin
percentage 19 % 17 % 23 % 22 %
Adjusted gross margin
percentage(1) 29 % 23 % 30 % 27 %
Adjusted EBITDAS(1) $ 17,431 $ 17,582 $ 76,284 $ 93,805
Adjusted EBITDAS
margin percentage(1) 16 % 14 % 16 % 16 %
Net income $ 3,136 $ 14,892 $ 15,579 $ 57,907
Per common share -
basic $ 0.09 $ 0.43 $ 0.46 $ 1.67
Per common share -
diluted $ 0.08 $ 0.38 $ 0.42 $ 1.51
Cash flow - operating
activities $ 40,453 $ 20,934 $ 91,679 $ 90,177
Free cash flow(1) $ (8,388) $ 941 $ 14,949 $ 24,240
Weighted average
common shares
outstanding:
Basic (000s) 33,482 35,027 33,785 34,705
Diluted (000s) 37,034 38,800 37,339 38,468
Balance (stated in thousands of Canadian dollars) December 31, December 31,
2025 2024
Working capital(1) $ 84,092 $ 84,417
Total assets $ 462,382 $ 472,881
Loans and borrowings $ 61,534 $ 63,527
Exchangeable promissory notes ("EP notes") $ 26,697 $ 26,962
Shareholders' equity $ 248,773 $ 241,580
(1) Refer to the 'Non-GAAP measures' section in this news
release.
RESULTS OF OPERATIONS
Financial
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars,
except percentages)
Revenues
United States $ 62,732 $ 79,300 $ 287,917 $ 371,879
Canada 46,569 48,783 187,011 199,906
Total revenues 109,301 128,083 474,928 571,785
Cost of sales
Direct costs (80,528) (99,054) (336,668) (415,994)
Depreciation and
amortization (8,233) (6,677) (30,890) (30,924)
Share-based
compensation (66) (145) (457) (610)
Total cost of sales (88,827) (105,876) (368,015) (447,528)
Gross margin $ 20,474 $ 22,207 $ 106,913 $ 124,257
Gross margin
percentage 19 % 17 % 23 % 22 %
Adjusted gross margin
percentage(1) 29 % 23 % 30 % 27 %
(1) Refer to the 'Non-GAAP measures' section in this news
release.
Operational
(stated in Canadian Three months ended % Year ended %
dollars, except operating December 31, December 31,
days and average industry
land rig counts)
2025 2024 Change 2025 2024 Change
Operating days(1)
United States 1,942 2,841 (32 %) 9,972 13,337 (25 %)
Canada 3,166 3,471 (9 %) 13,563 14,502 (6 %)
5,108 6,312 (19 %) 23,535 27,839 (15 %)
Average industry land rig
count(2)
United States 512 541 (5 %) 528 560 (6 %)
Canada 167 178 (6 %) 163 171 (5 %)
Average revenues per
operatingday(1)
United States $ 32,303 $ 27,913 16 % $ 28,873 $ 27,883 4 %
Canada $ 14,709 $ 14,054 5 % $ 13,788 $ 13,785 -- %
$ 21,398 $ 20,292 5 % $ 20,180 $ 20,539 (2 %)
Net lost-in-hole
equipmentreimbursements(3) $ 4,286 $ 5,062 (15 %) $ 19,598 $ 25,277 (22 %)
(1) Per 'Supplementary financial measures and other definitions'
section in this news release.
(2) Per JWN RigLocator and Enverus.
(3) Refer to the 'Non-GAAP measures' section in this news
release.
Summary
The Company improved gross margin and Adjusted gross margin percentages(1() despite a 19% and 15% decline in the Company's operating days(2() in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to prior periods, respectively. The reduction in operating days(2) , particularly in the U.S., was the primary contributing factor to the decline in the Company's revenues for the three months ended December 31, 2025 and the year ended December 31, 2025, compared to prior periods.
The Company improved the resiliency of gross margins through replacement of third-party rental equipment with owned equipment, primarily focused on Rime MWD systems. Typically, decreased revenue of 15% and 17% in the three months ended December 31, 2025 and the year ended December 31, 2025, respectively, would result in the Company's fixed components of direct costs negatively impacting margin percentages. However, gross margins improved meaningfully over the prior year periods despite the decline in revenue.
SEGMENTED INFORMATION
United States
Revenues
U.S. revenues were $62.7 million in the three months ended December 31, 2025, a decrease of $16.6 million or 21%, compared to $79.3 million in for the same period in 2024. The Company experienced a 32% decrease in operating days(2() in the three months ended December 31, 2025 (2025 - 1,942 days; 2024 - 2,841 days). The Company's activity declines exceeded the 5% decrease in the average U.S. land rig count, magnified by certain of the Company's customers consolidating. In addition, the Company felt the impact of the increasingly competitive U.S. market given the general broad market uncertainties contributing to commodity price volatility. The average revenues per operating day(1) increased 16% in the three months ended December 31, 2025 (2025 - $32,303 per day; 2024 - $27,913 per day) due to higher portion of rental revenue and a favorable job mix requiring additional revenue generating technologies.
U.S. revenues were $287.9 million in the year ended December 31, 2025, a decrease of $84.0 million or 23%, compared to $371.9 million for the same period in 2024. The Company experienced a 25% decrease in operating days(1) in the year ended December 31, 2025 (2025 - 9,972 days; 2024 - 13,337 days). The Company's activity declines exceeded the 6% decrease in the average U.S. land rig count mainly as a result of consolidation by some of the Company's customers. In addition, the Company felt the impact of the increasingly competitive U.S. market given the general market uncertainty contributing to commodity price volatility. The average revenues per operating day(1) increased 4% in the year ended December 31, 2025 (2025 - $28,873 per day; 2024 - $27,883 per day), with the same period in 2024.
Direct costs
U.S. direct costs included in cost of sales were $47.8 million in the three months ended December 31, 2025, a decrease of $14.3 million or 23%, compared to $62.1 million in for the same period in 2024. Direct costs as a percentage of revenues were 76% in the three months ended December 31, 2025, compared to 78% in for the same period in 2024. The decrease is mainly due to lower MWD third-party rental costs, resulting from the Rime MWD build-out and lower labour and repair costs related to cost reduction initiatives in the three months ended December 31, 2025.
U.S. direct costs included in cost of sales were $211.5 million in the year ended December 31, 2025, a decrease of $70.1 million or 25%, compared to $281.6 million for the same period in 2024. The decrease is mainly due to lower MWD third-party rental costs, resulting from the Rime MWD build-out, and lower labour and repair costs related to lower activity and cost reduction initiatives in the year ended December 31, 2025. Direct costs as a percentage of revenues were 73% in the year ended December 31, 2025, compared to 76% for the same period in 2024, primarily as a result of lower MWD third-party rental costs resulting from the Rime MWD build-out.
_________________________________
(1) Refer to the 'Non-GAAP measures' section in this news
release.
(2) Per 'Supplementary financial measures and other definitions'
section in this news release.
Canadian
Revenues
Canadian revenues were $46.6 million in the three months ended December 31, 2025, a decrease of $2.2 million or 5%, compared to $48.8 million in for the same period in 2024, due to an 9% decrease in operating days(1) in the three months ended December 31, 2025 (2025 - 3,166 days; 2024 - 3,471 days) consistent with the Western Canada average land rig count decrease of 6%. The average revenues per operating day(1) increased 5% in the three months ended December 31, 2025 (2025 - $14,709 per day; 2024 - $14,054 per day). The increase in the average revenues per operating day(1) is mainly attributable to a favorable job mix requiring additional revenue generating technologies.
Canadian revenues were $187.0 million in the year ended December 31, 2025, a decrease of $12.9 million or 6%, compared to $199.9 million for the same period in 2024, with the decline primarily attributable to a 6% decrease in operating days(1) in the year ended December 31, 2025 (2025 - 13,563 days; 2024 - 14,502 days). Consistent with a decline in the Western Canada average land rig count of 5%, ACT had a slight decline in activity during the year ended December 31, 2025, relative to the comparative period. The average revenues per operating day(1) were consistent in the year ended December 31, 2025 (2025 - $13,788 per day; 2024 - $13,785 per day), with the same period in 2024.
Direct costs
Canadian direct costs included in cost of sales were $32.7 million in the three months ended December 31, 2025, a decrease of $4.3 million or 12%, compared to $37.0 million in for the same period in 2024. The decrease is mainly due to lower repair, third-party rental and labour costs in the three months ended December 31, 2025, consistent with lower activity levels. As a percentage of revenues, direct costs were 70% in the three months ended December 31, 2025, compared to 76% in for the same period in 2024. A more favorable revenue mix in the three months ended December 31, 2025, relative to for the same period in 2024, is the primary factor in direct costs being lower as a percentage of revenues in the three months ended December 31, 2025.
Canadian direct costs included in cost of sales were $125.2 million in the year ended December 31, 2025, a decrease of $9.2 million or 7%, compared to $134.4 million for the same period in 2024. The decrease is mainly due to lower repair, third-party rental and labour costs in the year ended December 31, 2025, consistent with lower activity levels. As a percentage of revenues, direct costs were 67% in the year ended December 31, 2025, compared to 67% for the same period in 2024.
CONSOLIDATED
Revenues
The Company's revenues were $109.3 million in the three months ended December 31, 2025, a decrease of $18.8 million or 15%, compared to $128.1 million in for the same period in 2024. The decrease is driven by a 19% decrease in operating days(1() (2025 - 5,108 days; 2024 - 6,312 days) offset by a 5% increase in the average revenues per operating day(1) (2025 - $21,398; 2024 - $20,292).
The Company recognized $474.9 million of revenues in the year ended December 31, 2025, a decrease of $96.9 million or 17%, compared to $571.8 million for the same period in 2024. The decrease is driven by a 15% decrease in operating days(1) (2025 - 23,535 days; 2024 - 27,839 days), and a 2% decrease in the average revenues per operating day(1) (2025 - $20,180; 2024 - $20,539). The decline in the consolidated average revenues per operating day(1) was primarily due to a higher weighting of Canadian operating days(1) , which has lower average equipment intensity per job, and therefore lower average revenues per operating day(1) compared to U.S. jobs.
Direct Costs
The Company recognized $80.5 million of direct costs in the three months ended December 31, 2025, a decrease of $18.6 million or 19%, compared to $99.1 million in for the same period in 2024. The decrease is mainly due to lower labour and repair costs resulting from the decrease in operating days(1) and cost reduction initiatives, and lower third-party MWD rental costs mainly related to the Rime MWD build-out.
The Company recognized $336.7 million of direct costs in the year ended December 31, 2025, a decrease of $79.3 million or 19%, compared to $416.0 million for the same period in 2024. The decrease is mainly due to lower labour and repair costs resulting from the decrease in operating days(1) , and lower third-party MWD rental costs mainly related to the Rime MWD build-out.
Direct costs as a percentage of revenues decreased to 74% in the three months ended December 31, 2025, compared to 77% in for the same period in 2024. Lower third-party MWD rental costs mainly related to the Rime MWD build-out contributed to this reduction. Also contributing to the reduction was higher Lost-in-hole revenues(1) in the three months ended December 31, 2025, relative to the comparative period, since lost-in-hole activity typically has lower associated costs then other forms of revenue. Direct costs as a percentage of revenues were 71% for the year ended December 31, 2025, compared to 73% for the same period in 2024.
________________________________
(1) Per 'Supplementary financial measures and other definitions'
section in this news release.
Gross margin and Adjusted gross margin(2)
The Gross margin and Adjusted gross margin percentages(2) improved in for the fourth quarter and year ended December 31, 2025 compared to the same periods in 2024 despite a 15% and 17% decrease in revenues in the three months ended December 31, 2025 and the year ended December 31, 2025, respectively. This improvement is primarily due to the ongoing deployment of its newly built MWD fleet, reducing third-party rental costs.
Depreciation and amortization expense
Depreciation and amortization expense included in cost of sales increased to $8.2 million in the three months ended December 31, 2025, compared to $6.7 million in for the same period in 2024, mainly due to a higher portion of the MWD build-out being depreciated. Depreciation and amortization expense included in cost of sales remained consistent for the years ended December 31, 2025 and 2024 at $30.9 million.
Selling, general and administrative ("SG&A") expenses
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Selling, general and
administrative
expenses:
Direct costs $ 11,565 $ 10,559 $ 56,349 $ 54,540
Depreciation and
amortization 2,760 2,670 11,033 10,109
Share-based
compensation 471 605 2,969 2,565
Selling, general and
administrative
expenses $ 14,796 $ 13,834 $ 70,351 $ 67,214
The Company recognized direct costs included in SG&A expenses of $11.6 million and $56.3 million in the three months ended December 31, 2025 and the year ended December 31, 2025, which were slightly higher than $10.6 million and $54.5 million for the same periods in 2024, respectively. As a result of SG&A being more fixed cost in nature, against lower revenues, direct costs included in SG&A expenses as a percentage of revenues were 11% and 12% in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to 8% and 10% for the same periods in 2024, respectively.
Depreciation and amortization included in SG&A expenses were $2.8 million and $11.0 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $2.7 million and $10.1 million for the same periods in 2024, respectively. The slight increases are mainly due to amortization expense associated with RSS licenses acquired in the latter part of 2024.
Stock-based compensation included in SG&A expenses were $0.5 million and $3.0 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $0.6 million and $2.6 million for the same periods in 2024, respectively. The increase for the year ended December 31, 2025 is mainly due to restricted shares granted in 2025.
__________________________________
(1) Refer to the 'Non-GAAP measures' section in this news
release.
Provision
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Provision $ -- $ -- $ 4,846 $ --
The Company is subject to a historical U.S. sales and use tax audit (the "Audit") period that originated prior to the Company's acquisition of Altitude Energy Partners ("AEP Acquisition") on July 14, 2022, with certain errors determined to extend into the period after the AEP Acquisition (the "Post-Closing Audit Period"). In 2025 the Company received additional information relating to this Audit impacting the Post-Closing Audit Period and recorded an incremental provision of $4.8 million. No revisions to this estimate were made in the three months ended December 31, 2025. In the fourth quarter of 2025, the Company paid $4.1 million to the tax authorities in partial settlement of the Audit. As at December 31, 2025, the Company's Post-Closing Audit Period provision accrued is $8.0 million.
Also in relation to the Audit, certain liabilities originated prior to the AEP Acquisition (the "Pre-Closing Audit Period"). The Company has recognized a provision of $14.8 million in Trade and other payables related to the Pre-Closing Audit Period. Pursuant to the Equity Purchase Agreement related to the AEP Acquisition, the sellers provided the Company with an indemnity related to pre-closing tax issues, specifically identifying the risk around the Audit. Accordingly, the Company has recognized an offsetting indemnity receivable of $14.8 million in Other receivable. This assessment relies on estimates and assumptions and may involve a series of judgments about future events.
All figures in this section are presented in Canadian dollars; however, the underlying figures are denominated in U.S. dollars and are therefore subject to fluctuations in foreign currency exchange rates. New information may become available that prompts the Company to adjust its judgment regarding the adequacy of this provision.
Research and development ("R&D") costs
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Research and
development costs $ 1,276 $ 1,010 $ 4,980 $ 5,238
The Company recognized R&D costs of $1.3 million and $5.0 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $1.0 million and $5.2 million for the same periods in 2024, respectively. R&D costs include salaries, benefits, purchased materials and shop supply costs related to new product development and technology and engineering.
Write-off of property, plant and equipment
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Write-off of
property, plant and
equipment $ 972 $ 642 $ 3,719 $ 3,508
The Company recognized a write-off of property, plant and equipment of $1.0 million and $3.7 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $0.6 million and $3.5 million for the same periods in 2024, respectively. The write-offs related to equipment lost-in-hole and damaged beyond repair. Lost-in-hole equipment and damaged beyond repair reimbursements from customers are based on service agreements held with clients and are recognized as revenue.
Finance costs
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Finance costs - loans
and borrowings
andexchangeable
promissory notes $ 1,914 $ 1,963 $ 7,090 $ 8,771
Finance costs - lease
liabilities $ 304 $ 308 $ 1,180 $ 899
Finance costs - loans and borrowings and EP notes were $1.9 million, a decrease of $0.1 million, compared to $2.0 million in for the same period in 2024. Finance costs - loans and borrowings and EP notes were $7.1 million in the year ended December 31, 2025, a decrease of $1.7 million, compared to $8.8 million for the same period in 2024. The decrease is mainly due to a lower outstanding balance of loans and borrowings in the three months ended December 31, 2025 compared to for the same period in 2024, and a lower interest rate as a result of the Company's refinancing completed in 2025 Q1.
In addition, the Company had finance costs - lease liabilities of $0.3 million and $1.2 million in the three months ended December 31, 2025 and the year ended December 31, 2025, related to lease liabilities, compared to $0.3 million and $0.9 million for the same periods in 2024, respectively.
Foreign exchange
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Foreign exchange
(loss) gain $ (2,055) $ 6,857 $ (6,303) $ 8,628
Foreign currency
translation (loss)
gain on
foreignoperations $ (1,038) $ 4,759 $ (3,679) $ 6,063
The Company recognized a foreign exchange loss of $2.1 million and a foreign exchange loss of $6.3 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to a foreign exchange gain of $6.9 million and a foreign exchange gain of $8.6 million for the same periods in 2024, respectively. During the three months ended December 31, 2025 the Canadian dollar exchange rate decreased by 1% from $1.39 at September 30, 2025 to $1.37 at December 31, 2025. Therefore the Company recognized foreign exchange gain of $0.3 million on revaluation of the Company's USD denominated balances and foreign exchange loss of $2.3 million on revaluation of the intercompany loans issued by the parent company to its self-sustaining foreign subsidiaries. The offsetting foreign exchange gain on intercompany loans held by the subsidiaries is recognized as part of the translation of foreign operations within other comprehensive income, as described below.
The Company's foreign operations are denominated in USD and differences due to fluctuations in the foreign currency exchange rates are recorded in other comprehensive income. The Company recognized a foreign currency translation loss on foreign operations of $1.0 million in the three months ended December 31, 2025, compared to a gain of $4.8 million in for the same period in 2024. The Company recognized a foreign currency translation loss of $3.7 million in the year ended December 31, 2025, compared to a gain of $6.1 million for the same period in 2024.
Income tax (recovery) expense
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Current tax expense
(recovery) $ 18 $ (2,318) $ (486) $ 141
Deferred tax recovery (4,966) (1,140) (7,151) (10,244)
Income tax recovery $ (4,948) $ (3,458) $ (7,637) $ (10,103)
The Company recognized an income tax recovery of $4.9 million and $7.6 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to an income tax recovery of $3.5 million and $10.1 million for the same periods in 2024, respectively. In year ended December 31, 2025, the Company re-recognized $3.1 million of its Canadian tax pools (2024 - $15.3 million) due to management's assessment and estimates that they would likely be utilized in the near future.
Income tax expense (recovery) is recognized based upon expected annualized rates using the statutory rates of 23% for both Canada and the U.S. adjusted for key items that will affect the Company's actual tax for the period.
LIQUIDITY AND CAPITAL RESOURCES
Annually, the Company's principal source of liquidity is cash generated from its operations. In addition, the Company has the ability to fund liquidity requirements through its credit facility and the issuance of additional debt and/or equity, if available.
In order to facilitate the management of its liquidity, the Company prepares an annual budget, which is updated, as necessary, depending on varying factors, including changes in capital structure, execution of the Company's business plan and general industry conditions. The annual budget is approved by the Board of Directors and updated forecasts are prepared as the fiscal year progresses with changes reviewed by the Board of Directors.
Cash flow - operating activities was $40.5 million and $91.7 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $20.9 million and $90.2 million for the same periods in 2024, respectively.
ACT remains focused on reducing its Net debt(1() and generating Free cash flow(1) , as defined in the 'Non-GAAP measures' section of this news release. In addition, the Company will remain opportunistic in executing its NCIB and making strategic and accretive acquisitions.
At December 31, 2025, the Company had working capital(1) , excluding current portion of debt (loans and borrowings and EP notes) of $84.1 million (December 31, 2024 - $84.4 million).
______________________________
(1) Refer to the 'Non-GAAP measures' section in this news
release.
Common share consolidation
On May 9, 2024, the shareholders of the Company approved the consolidation of the issued and outstanding common shares of the Company, on the basis of one post-consolidation common share for a range of five to ten pre-consolidation common shares. On June 10, 2024, the Board of Directors approved a consolidation ratio of one post-consolidation share for seven pre-consolidation common shares (the "Consolidation"). As a result, on July 3, 2024, 243,383,392 common shares issued and outstanding prior to the Consolidation were reduced to 34,769,056 common shares. No fractional common shares were issued in connection with the Consolidation, and all fractional common shares that otherwise would have been issued was rounded to the nearest whole common share. The number of common shares and per common share amounts in this news release, as they relate to the pre-Consolidation period, were restated to reflect the Consolidation.
Normal course issuer bid
During the year ended December 31, 2025, 1,907,386 (2024 - 1,144,250) common shares were purchased under the NCIB for a total purchase amount of $10.2 million (2024 - $7.0 million) at an average price of $5.32 (2024 - $6.08) per common share. A portion of the purchase amount reduced share capital by $10.1 million (2024 - $6.5 million) and the residual purchase amount of $0.1 million (2024 - $0.4 million) was recorded to the surplus.
In connection with the NCIB, the Company established an automatic securities purchase plan ("the Plan"). Accordingly, the Company may repurchase its common shares under the Plan on any given trading day during the NCIB, including during regulatory restrictions or self-imposed trading blackout periods. The Plan commenced on August 11, 2025, and will terminate on August 10, 2026. As at December 31, 2025, the Company recognized $1.4 million as an accrued liability (with a corresponding reduction to share capital) for the maximum number of common shares to be purchased under the Plan. As at December 31, 2024, the accrued liability related to the reduction of share capital was $1.9 million. During the year ended December 31, 2025, the Company reversed the previously recognized accrual and recorded the new liability, resulting in a net decrease to share capital of $0.5 million.
Subsequent to December 31, 2025, the Company purchased 280,072 common shares for a total purchase amount of $1.6 million, at an average purchase price of $5.76 per common share.
Syndicated and revolving credit facilities
On March 21, 2025, the Company entered into a Fifth Amended and Restated Credit Agreement with its existing syndicate of lenders co-lead by ATB Financial and Royal Bank of Canada ("Amended Credit Agreement"). The Amended Credit Agreement provided for the following:
i. A revolving facility with an approximate principal
amount of $124.3 million comprised of: i) $100.0 million
Syndicated Revolving Facility ("CAD Syndicated Revolving
Facility") and ii) $10.0 million revolving facility
provided by ATB Financial ("ATB Revolving Facility"),
and iii) USD $10.0 million (approximately CAD $14.3
million equivalent) provided by HSBC Bank USA, N.A.
("HSBC Revolving Facility"). The revolving facility
replaced the Company's existing facilities (CAD Syndicated
Term Facility of $59.0 million, USD Syndicated Term
Facility of USD $21.0 million, Syndicated Operating
Facility of $35.0 million, Revolving Operating Facility
of $15.0 million and USD Revolving Operating Facility
of $10.0 million). As such, the contractual repayments
of the CAD Syndicated Term Facility and USD Syndicated
Term Facility are no longer required;
ii. A lower amended interest rate updated to the financial
institution's prime rate plus 1.0% to 1.75% or Canadian
Overnight Repo Rate Average rate / Secured Overnight
Financing Rate plus 2.0% to 2.75% (previously prime
rate plus 1.5% to 2.25% or Canadian Overnight Repo
Rate Average rate / Secured Overnight Financing Rate
plus 2.5% to 3.25%);
iii. The maturity date extended from July 11, 2026 to March
21, 2028;
iv. Replaced the financial covenant of Consolidated Fixed
Charge Coverage ratio (previously required to be no
less than 1.25:1) with a Consolidated Interest Coverage
Ratio, which is required to be no less than 3.0:1.
The Consolidated Funded Debt to Consolidated Credit
Agreement EBITDA ratio remained unchanged and shall
not exceed 2.5:1; and
v. The syndicate of lenders remained unchanged with the
exception of Royal Bank of Canada joining ATB Financial
as the syndicate co-lead.
As at December 31, 2025, $62.8 million of the $123.7 million Revolving Facility remained undrawn. No repayments were made on the CAD Syndicated Revolving Facility subsequent to quarter-end. As at December 31, 2025, the Company was in compliance with all covenants. Financial covenants are as follows:
-- Consolidated Funded Debt to Consolidated Credit Agreement EBITDA ratio
shall not exceed 2.5:1.0 (calculated - 1.1); and
-- Consolidated Interest Coverage ratio shall not be less than 3.0 :1.0
(calculated - 10.5).
Contractual obligations and contingencies
As at December 31, 2025, the Company's commitment to capital is approximately $3.7 million (December 31, 2024 - $11.9 million), which is expected to be incurred over the next six months.
The Company holds six letters of credit totaling $1.7 million (December 31, 2024 - $1.8 million) related to rent payments, corporate credit cards and a utilities deposit.
The Company is involved in various other legal claims and tax audits associated with the normal course of operations. The Company believes that any liabilities that may arise pertaining to such matters would not have a material impact on its financial position. Refer to the 'Provision' section in this news release for more details.
The following table outlines the anticipated payments related to contractual commitments subsequent to December 31, 2025:
(stated in thousands Carrying One year 1-2 years 3-5 years Thereafter
of Canadian dollars) amount
Loans and borrowings
- principal $ 61,786 $ 602 $ -- $ 61,184 $ --
Exchangeable
promissory
("EP")notes -
principal 27,412 27,412 -- -- --
Interest payments on
loans andborrowings
and EP notes 8,166 4,064 3,410 692 --
Lease liabilities -
undiscounted 19,949 4,447 4,277 7,151 4,074
Trade and other
payables 95,711 95,711 -- -- --
Total $ 213,024 $ 132,236 $ 7,687 $ 69,027 $ 4,074
The Company expects to meet its obligations through normal operating cash flows. If additional liquidity is required to fund near- term obligations, including those related to the EP notes maturity, the Company has access to its Revolving Credit Facility and subsequent to year end, the Company has entered into an arrangement with ATB Financial ("ATB"), as administrative agent, and ATB and Royal Bank of Canada, as co-lead arrangers, to increase the size of the Company's existing syndicated credit facility which further supports the ability to refinance the EP notes, subject to bank agreement compliance (see the "Transactions" section of the news release for further details).
Capital structure
As at March 24, 2026, the Company has 34,916,431 common shares, 1,882,764 stock options, and EP Notes, that are exchangeable into a maximum of 3,510,000 common shares outstanding.
NET CAPITAL EXPENDITURES
The following table details the Company's Net capital expenditures (1) :
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
MWD and related
equipment $ 10,784 $ 1,738 $ 32,215 $ 18,147
Motors and related
equipment 1,414 35 14,066 19,413
Shop and automotive
equipment 77 223 1,202 703
Other 190 840 1,899 3,664
Gross capital
expenditures 12,465 2,836 49,382 41,927
Less: net
lost-in-hole
equipment
reimbursements(1) (4,286) (5,062) (19,598) (25,277)
Net capital
expenditures(1) $ 8,179 $ (2,226) $ 29,784 $ 16,650
(1) Refer to the 'Non-GAAP measures' section in this news
release.
Equipment additions totaling $49.4 million included $8 million of items previously purchased and held in inventory for the Rime MWD system build-out in 2025 Q1.
As at December 31, 2025, property, plant and equipment included $1.8 million (2024 - $12.3 million) of MWD equipment not yet being depreciated as they are currently being manufactured and tested. Depreciation of the assets will commence upon the assets being fully operational.
Given the current market uncertainty, the Company's 2026 gross and Net capital expenditures(1) budget will be dynamic and adjusted to reflect management's expectation of future activity levels. Currently, the Company's target Net capital expenditures(1) budget is anticipated to relate to sustaining and growth capital expenditures that will enhance realized gross margin percentage levels, including optimizing ACT's high-performance mud motors, MWD in both Canada and the U.S., and selective RSS deployments. ACT intends to fund its 2026 capital plan from cash flow - operating activities.
(1) Refer to the 'Non-GAAP measures' section in this news
release.
OUTLOOK
Although we remain encouraged by the long-term fundamentals supporting energy demand, near-term conditions carry a higher degree of uncertainty and potential volatility as a result of geopolitical developments and trade-related uncertainty. Over the coming months, we expect to gain greater clarity on whether recent changes in commodity prices are temporary or more structural; however, based on current customer discussions we do not expect a meaningful impact on drilling activity or capital spending in the short term.
In Canada, overall industry activity was 8--10% lower than the same quarter last year; however, we saw a modest increase in our activity levels and captured a higher share of industry job counts year over year. This improvement was primarily driven by increased RSS demand and the continued adoption of multi-lateral drilling techniques - areas where our deep experience and technology are ideally suited. Given the compelling economics for customers on these well types, we believe the environment for drilling activity in Western Canada will remain constructive. We anticipate second-quarter activity will continue to improve on a year-over-year basis as operators adopt more of our technology and further expand pad-style drilling.
In the U.S., job counts in our existing business remained relatively flat, while our overall job count increased following the Stryker Acquisition early in the quarter. The growing use of RSS technology by our clients continues to translate into stronger aggregate revenue per day and operating margins, consistent with the trend we saw in the latter parts of 2025. Looking ahead to the second quarter, we expect job counts to remain steady at recent levels, with the potential for additional activity once the SB Directional Services acquisition is finalized early in the quarter.
TRANSACTIONS
On January 5, 2026 the Company acquired all the assets of Stryker Energy Directions Services, LLC for total purchase consideration of $32.9 million, consisting of $17.2 million cash, 1,299,394 of the Company's common share and $9.2 million in promissory notes. The preliminary purchase price allocation is based on Management's best estimate of fair value and consist of $1.8 million of inventory, $22.2 million of PP&E and $8.9 million of intangible assets. Upon finalizing the fair value of net assets acquired, adjustment to initial estimates, including goodwill, may be required.
On March 9, 2026, the Company announced entering into an agreement to acquire the directional drilling services business of SB Directional Services. The total consideration is estimated around $64.3 million. The consideration is comprised of US$30 million in cash and US$17 million, or 3,624,232 in ACT common shares. The transaction is expected to close in early April 2026. Upon completion of the SB Acquisition, the Company will have expanded its U.S. operating footprint and customer network. The Acquisition
In connection with the SB Acquisition, and partially to fund the SB Acquisition, ACT has entered into an arrangement with ATB, as administrative agent, and ATB and Royal Bank of Canada, as co-lead arrangers, to increase the size of the Company's existing syndicated credit facility from approximately CAD$125 million to CAD$145 million, and increase the U.S. dollar credit availability from USD $10 million to USD$30 million ("Amended Credit Facilities"). The USD committed credit facilities are comprised of (i) a US$10 million revolving facility, and (ii) a new US$20 million delayed draw term facility, having a term of 3 years with equal quarterly repayments of USD$1.67 million, available for purposes of refinancing the US$20 million EP notes issued in connection with a prior acquisition which matures in July 2026. The funded debt to EBITDA covenant has increased to 3.00:1.00 from 2.50:1.00 as part of the Amended Credit Facilities.
NON-GAAP MEASURES
ACT uses certain performance measures throughout this news release that are not defined under IFRS Accounting Standards or Generally Accepted Accounting Principles ("GAAP"). These non-GAAP measures do not have a standardized meaning and may differ from that of other organizations, and accordingly, may not be comparable. Investors should be cautioned that these measures should not be construed as alternatives to IFRS Accounting Standards measures as an indicator of ACT's performance.
These measures include the Adjusted gross margin, Adjusted gross margin percentage, Adjusted EBITDAS, Adjusted EBITDAS margin percentage, Free cash flow, Working capital and Net capital expenditures. Management believes these measures provide supplemental financial information that is useful in the evaluation of ACT's operations.
These non-GAAP measures are defined as follows:
i) "Adjusted gross margin" is a non-GAAP financial measure
and has been reconciled to gross margin, being the
most directly comparable measure calculated in accordance
with IFRS. Adjusted gross margin is a non-GAAP measure
of changes in financial performance that are closely
related to the Company's core operating activities,
by excluding items that management evaluates separately
when evaluating underlying when assessing underlying
margin trends, including inventory valuation adjustments,
depreciation and amortization and equity dilution
costs reflected as share based compensation, all included
in cost of sales (see tabular calculation);
ii) "Adjusted gross margin percentage" - calculated as
Adjusted gross margin divided by revenues; is considered
a primary indicator of operating performance (see
tabular calculation);
iii) "Adjusted EBITDAS" is a non-GAAP financial measure
and has been reconciled to net income / (loss) for
the applicable financial periods, being the most directly
comparable measure calculated in accordance with IFRS.
Management utilizes Adjusted EBITDAS to translate
historical variability in the Company's principal
business activities into future financial expectations.
By isolating incremental items from net income, including
income / expense items related to how the Company
chooses to manage financing elements of the business
(including elements affecting shareholder dilution),
taxation, and non-cash charges, management can better
predict future financial results from our principal
business activities (see tabular calculation). The
items included in this calculation are as follows:
1. Non-cash expenditures, including depreciation, amortization
and impairment of non-financial assets;
2. Consideration as to how the Company chose to finance
its business, generate financial income and incur
financial expenses, including foreign exchange income
/ ( expenses), share based compensation (reflected
in common share dilution calculations) and finance
costs;
3. Other specified items are items impacting current
period operating performance not reflect underlying
operating performance for the period, including costs
incurred for business acquisitions, inventory valuation
adjustments; and
4. Taxation in various jurisdictions.
iv) "Adjusted EBITDAS margin percentage" - calculated
as Adjusted EBITDAS divided by revenues; provides
supplemental information to net income that is useful
in evaluating the results and financing of the Company's
business activities before considering certain charges
as a percentage of revenues (see tabular calculation);
v) "Free cash flow" - calculated as cash flow - operating
activities plus changes in non-cash working capital
and non-recurring expenses, less: i) cash flow - investing
activities (updated from property, plant and equipment
("PP&E") and intangible asset additions, excluding
assets acquired in business combinations), ii) cash
interest paid and iii) repayments of lease liabilities,
net of finance costs, offset by proceeds on disposal
of PP&E. This is a useful supplemental measure of
the Company's ability to generate funds from operations
available for future capital expenditures, debt repayments,
or other strategic initiatives (see tabular calculation).
Free cash flow was updated from prior periods to no
longer add back cash taxes paid and to deduct cash
interest expense instead of required debt repayments.
This change was made in order to more accurately portray
the ongoing operating cash flows of the business and
align with disclosures from other oilfield services
peers, in order to provide a more accurate depiction
of ACT's cash generation and improve comparability
for financial statement users.
vi) "Net capital expenditures" - calculated as the gross
capital expenditures less Net lost-in-hole equipment
reimbursements, as defined below - refer to the "Net
capital expenditures" section of this news release
for tabular calculation. The timing and amount of
equipment lost-in-hole can very from period to period.
Therefore, Net capital expenditures is a useful supplemental
financial measure as it provides insight on the amount
of investing capital requirements attributable to
lost-in-hole equipment. Components impacting Net capital
expenditures are as follows:
1. "Lost-in-hole revenues" - represent reimbursements
received from customers and insurance proceeds related
to directional drilling equipment that is lost in-hole
or damaged beyond repair. Management considers lost-in-hole
revenue to be supplemental information that assists
in understanding fluctuations in the Company's reported
revenues under IFRS Accounting Standards. Although
lost-in-hole revenues tend to remain relatively consistent
over longer periods, they can vary significantly from
period to period, causing fluctuations in the Company's
financial results;
2. "Net lost-in-hole equipment reimbursements" - represent
lost-in-hole revenues, as defined above, less outflows
associated with vendor payments for insurance coverage
and third-party rental equipment replacement related
to equipment lost-in-hole or damaged beyond repair.
vii) "Working capital" - calculated as current assets less
current liabilities, excluding the current portion
of loans, borrowings and promissory notes. Management
uses this measure as an indication of the Company's
financial and cash liquidity position.
viii) "Net debt" - calculated as the sum of current and
long-term loans and borrowings and EP notes, less
cash. This is a useful supplemental measure of the
company's total debt levels, adjusted for its cash
position (see tabular calculation).
The following tables provide reconciliations from the IFRS Accounting Standards to non-GAAP measures included in this news release.
Adjusted gross margin
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Gross margin $ 20,474 $ 22,207 $ 106,913 $ 124,257
Add non-cash items
included in cost of
sales:
Write-down of
inventory included
in cost of sales 2,436 355 2,518 782
Depreciation and
amortization 8,233 6,677 30,890 30,924
Share-based
compensation 66 145 457 610
Adjusted gross margin $ 31,209 $ 29,384 $ 140,778 $ 156,573
Adjusted gross margin
percentage 29 % 23 % 30 % 27 %
Adjusted EBITDAS
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars,
except percentages)
Net income $ 3,136 $ 14,892 $ 15,579 $ 57,907
Add (deduct):
Income tax recovery (4,948) (3,458) (7,637) (10,103)
Non-cash
expenditures,
including
depreciation,
amortization
and impairment 12,020 9,347 42,950 41,033
Share-based
compensation 537 750 3,426 3,175
Finance costs - loans
and borrowings
andexchangeable
promissory notes 1,914 1,963 7,090 8,771
Finance costs - lease
liabilities 304 308 1,180 899
Unrealized foreign
exchange (gain) loss 2,032 (6,575) 6,332 (8,692)
Other items - -- -- 4,846 --
provision
Other items,
including inventory
writeoff and gain on
settlement of lease
liabilities 2,436 355 2,518 815
Adjusted EBITDAS $ 17,431 $ 17,582 $ 76,284 $ 93,805
Adjusted EBITDAS
margin percentage 16 % 14 % 16 % 16 %
Free cash flow
Three months ended December Year ended December 31,
31,
(stated in thousands 2025 2024 2025 2024
of Canadian dollars)
Cash flow - operating
activities $ 40,453 $ 20,934 $ 91,679 $ 90,177
Add (deduct):
Changes in non-cash
operating working
capital (27,470) (3,235) (17,942) 2,191
Non-recurring
expenses -- 300 -- 424
Less:
Cash flow -
investing
activities (18,465) (14,021) (47,706) (56,482)
Interest paid (1,700) (1,968) (6,833) (8,469)
Repayments of lease
liabilities (1,206) (1,069) (4,249) (3,601)
Free cash flow $ (8,388) $ 941 $ 14,949 $ 24,240
Changes in Free cash flow methodology
The Company has modified its definition of Free cash flow to better align its internal reporting, how other similar entities report and how the Company evaluates using and making investments.
(stated in thousands 2025 Q4 2025 Q3 2025 Q2 2025 Q1 2024 Q4 2024 Q3 2024 Q2 2024 Q1 of Canadian dollars) Free cash flow (new methodology) $ (8,388) $ 16,558 $ 1,048 $ 5,731 $ 941 $ 17,056 $ (2,584) $ 8,827 Free cash flow (old methodology) $ (6,796) $ 18,248 $ 2,726 $ 7,875 $ (1,435) $ 14,162 $ (1,766) $ 6,211
Net debt
Year ended December 31,
(stated in thousands of Canadian dollars) 2025 2024
Loans and borrowings, current $ 602 $ 21,435
Loans and borrowings, long term 60,932 42,092
Exchangeable promissory notes, current 26,697 --
Exchangeable promissory notes, long term -- 26,962
Less:
Cash (34,650) (12,792)
Net debt $ 53,581 $ 77,697
SUPPLEMENTARY FINANCIAL MEASURES AND OTHER DEFINITIONS
i) "Average revenues per operating day" - is a supplemental
operational metric calculated by dividing revenues,
either for a specific geographic segment or on a consolidated
basis as reported under IFRS Accounting Standards,
by the corresponding number of operating days for
that segment or on a consolidated basis. Management
uses revenues per operating day to assess pricing
strength, service intensity, and comparative financial
performance against different periods and across different
geographic markets;
ii) "Job count" - sometimes referred to as daily jobs,
refers to the number of drilling rigs on which our
directional equipment is used for operation; and
iii) "Operating days" - are defined as the total number
of calendar days during which directional drilling
services were actively provided to a customer at a
rig site, excluding any days where personnel or equipment
were on location but not engaged in active drilling
operations (such as standby, rig move days, or other
non-operational periods, regardless of whether partial
revenues were recognized).
COMMON INDUSTRY TERMS
i) "LNG" - natural gas that typically is transported
via pipeline with customer demand limited to regions
with access to these pipelines. Through liquefaction,
larger volumes of natural gas can be economically
exported by sea to new markets;
ii) "LNG Train" or "Train" - refers to a complete processing
unit within an LNG facility that converts natural
gas into liquefied natural gas $(LNG)$. Each train includes
all the required equipment -- such as compressors,
heat exchangers, and refrigeration systems -- to carry
out the liquefaction process independently;
iii) "Lost-in-hole" or "lost-in-hole equipment" - refers
to directional drilling tools or equipment (such as
MWD or RSS systems) that become significantly damaged
or unrecoverable downhole during drilling operations.
This situation typically results in the customer being
charged for the replacement cost of the lost equipment;
iv) "MWD" - Measurement-while-drilling is a down-hole
tool used in oil, natural gas and geothermal wells
that provides real-time drilling data to the directional
driller enabling more precise placement and optimized
drilling operations;
v) "OPEC+" - is a group of oil-producing countries that
work together to control the supply of oil in the
global market to help keep prices stable;
vi) "Rig count" - is the estimated number of active rigs
drilling directionally as tracked by JWN RigLocator
for Canada and Enverus for the U.S. industry rig count
levels. This industry data can help provide an indication
of potential activity for the Company. During the
year ended December 31, 2025, the Company has revised
its source for the U.S. rig count to Enverus, replacing
Baker Hughes. Rig count levels include only those
estimated to be drilling directionally in both Canada
and the U.S., excluding rigs drilling vertically.
These revised rig count figures better reflect overall
industry activity levels affecting the Company's business,
and as a result, all comparative periods have been
adjusted; and
vii) "RSS" - Rotary steerable system which is a high-technological
drilling tool that simultaneously steers and rotates
the drill bit without manual intervention enabling
for more accurate drilling, especially in curved or
horizontal wells.
INDUSTRY PRICING METRICS
Common industry pricing metrics that affect our business directly, such as $CAD/$US foreign exchange, and indirectly through our customer's cash flows, such as WTI and and US NYMEX natural gas, are as follows:
2025 2025 2025 2025 2024 2024 2024 Q2 2024 Q1
Q4 Q3 Q2 Q1 Q4 Q3
Average
exchange
rate
($CAD/$US) 0.717 0.726 0.723 0.697 0.714 0.733 0.731 0.741
WTI
($US/bbl) 59.64 65.74 64.63 71.84 70.69 76.24 81.71 77.56
US NYMEX
natural gas
($US/Mmbtu) 3.75 3.03 3.19 4.15 2.44 2.11 2.09 2.13
i) "WTI" - West Taxes Intermediate is a widely used benchmark
price for light, sweet crude oil in North America
and is a key reference point for crude oil pricing
and industry activity levels;
ii) "bbl" - is the standard unit of measurement for crude
oil and stands for one barrel, equivalent to 42 U.S.
gallon;
iii) "US NYMEX" - refers to the benchmark price for natural
gas traded on the New York Mercantile Exchange ("NYMEX")
and is widely used as the reference pricing indicator
for North American natural gas markets; and
iv) "Mmbtu" - stands for one million British thermal units
and is a standard unit of measurement used to quantify
the energy content of natural gas.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes. In particular, this news release contains forward-looking statements relating to, among other things:
-- The 2026 Net capital expenditure budget and financing thereof;
-- Given the current market uncertainty, partly as a result of the enacted
and proposed U.S. tariffs, the Company's 2026 Net capital expenditure
budget will be dynamic and adjusted to reflect management's expectation
of future activity levels.
-- The Company believes its breadth of capabilities, particularly its
ability to service the higher-value segment of the market, positions it
well to benefit as customers increasingly focus on improved drilling
performance, greater efficiencies, and more complex well designs.
-- The Company's capital allocation strategy remains centered on long-term
value creation and strengthening business resilience. The Company's plan
is to: (a) invest selectively in high-return, organic growth
opportunities that improve customer productivity and support continued
margin expansion; (b) return capital to shareholders through its Normal
Course Issuer Bid (NCIB) share repurchase program; (c) position the
Company with modest leverage to preserve flexibility for strategic
acquisitions, as demonstrated by the recently completed Stryker
Acquisition and proposed SB Acquisition.
-- With the disciplined and balanced approach to capital allocation, the
Company believes it will continue to build an increasingly durable
business model - one that optimizes shareholder returns over the long
term.
-- Although the Company remains encouraged by the long-term fundamentals
supporting energy demand, near-term conditions carry a higher degree of
uncertainty and potential volatility as a result of geopolitical
developments and trade-related uncertainty.
-- Over the coming months, the Company expects to gain greater clarity on
whether recent changes in commodity prices are temporary or more
structural; however, based on current customer discussions, the Company
does not expect a meaningful impact on drilling activity or capital
spending in the short term.
-- Given the compelling economics for customers on these well types, the
Company believes the environment for drilling activity in Western Canada
will remain constructive.
-- The Company anticipates second-quarter activity will continue to improve
on a year-over-year basis as operators adopt more of its technology and
further expand pad-style drilling.
-- The growing use of RSS technology by the Company's clients continues to
translate into stronger aggregate revenue per day and operating margins,
consistent with the trend the Company saw in the latter parts of 2025.
-- Looking ahead to the second quarter, the Company expects job counts to
remain steady at recent levels, with the potential for additional
activity once the SB Acquisition is completed in early April 2026.
-- Upon completion of the SB Acquisition, the Company will have expanded its
U.S. operating footprint and customer network.
-- The Company will get access to the Amended Credit Facilities, including
availability of the new term US$20 million delayed draw term facility to
refinance the EP notes which will require available undrawn capacity of
$40 million at completion of refinancing the EP notes.
-- The Company will complete the SB Acquisition.
The Company believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.
Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to the Company, including information obtained from third-party industry analysts and other third-party sources. In some instances, material assumptions and material factors are presented elsewhere in this news release in connection with the forward-looking statements. You are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:
-- the performance of ACT's business;
-- impact of economic and social trends;
-- oil and natural gas commodity prices and production levels;
-- capital expenditure programs and other expenditures by ACT and its
customers;
-- the ability of ACT to attract and retain key management personnel;
-- the ability of ACT to retain and hire qualified personnel;
-- the ability of ACT to obtain parts, consumables, equipment, technology,
and supplies in a timely manner to carry out its activities;
-- the ability of ACT to maintain good working relationships with key
suppliers;
-- the ability of ACT to retain customers, market its services successfully
to existing and new customers and reliance on major customers;
-- risks associated with technology development and intellectual property
rights;
-- obsolescence of ACT's equipment and/or technology;
-- the ability of ACT to maintain safety performance;
-- the ability of ACT to obtain adequate and timely financing on acceptable
terms;
-- the ability of ACT to comply with the terms and conditions of its credit
facility;
-- the ability to obtain sufficient insurance coverage to mitigate
operational risks;
-- currency exchange and interest rates;
-- risks associated with future foreign operations;
-- the ability of ACT to integrate its transactions and the benefits of any
acquisitions, dispositions and business development efforts;
-- environmental risks;
-- business risks resulting from weather, disasters and related to
information technology;
-- changes under governmental regulatory regimes including tariffs and tax,
environmental, climate and other laws in Canada and the U.S.; and
-- competitive risks.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause the Company's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in this news release and in the Company's Annual Information Form under the heading "Risk Factors". Any forward-looking statements are made as of the date hereof and, except as required by law, the Company assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
All forward-looking statements contained in this news release are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in the Company's current Annual Information Form that has been filed with Canadian provincial securities commissions and is available on www.sedarplus.ca and the Company's website (www.actenergy.com).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at December 31, 2025 and December 31, 2024
Canadian dollars in '000s
December 31, December 31,
Balance, 2025 2024
Assets
Current assets:
Cash $ 34,650 $ 12,792
Trade receivables 78,408 105,872
Other receivable 14,789 15,526
Current taxes receivable 3,066 2,417
Prepaid expenses 6,320 6,678
Inventories 47,017 51,498
Total current assets 184,250 194,783
Property, plant and equipment 141,897 129,243
Intangible assets 62,793 77,352
Right-of-use assets 16,266 15,359
Goodwill 41,382 43,444
Deferred tax asset 15,794 12,700
Total non-current assets 278,132 278,098
Total assets $ 462,382 $ 472,881
Liabilities and Shareholders' Equity
Current liabilities:
Trade and other payables $ 95,711 $ 106,242
Loans and borrowings, current 602 21,435
Exchangeable promissory notes 26,697 --
Lease liabilities, current 4,447 4,124
Total current liabilities 127,457 131,801
Loans and borrowings, long-term 60,932 42,092
Exchangeable promissory notes -- 26,962
Lease liabilities, long-term 15,502 16,037
Deferred tax liability 9,718 14,409
Total non-current liabilities 86,152 99,500
Total liabilities 213,609 231,301
Shareholders' equity:
Share capital 190,255 195,516
Treasury shares (229) (469)
Exchangeable promissory notes 1,242 1,242
Contributed surplus 17,811 17,408
Accumulated other comprehensive income 15,472 19,151
Retained earnings 24,222 8,732
Total shareholders' equity 248,773 241,580
Total liabilities and shareholders' equity $ 462,382 $ 472,881
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended December 31, 2025 and 2024
Canadian dollars in '000s except per share amounts
Three months ended December 31, Year ended December 31,
2025 2024 2025 2024
Revenues $ 109,301 $ 128,083 $ 474,928 $ 571,785
Cost of sales:
Direct costs (80,528) (99,054) (336,668) (415,994)
Depreciation and
amortization (8,233) (6,677) (30,890) (30,924)
Share-based
compensation (66) (145) (457) (610)
Total cost of
sales (88,827) (105,876) (368,015) (447,528)
Gross margin 20,474 22,207 106,913 124,257
Selling, general
and
administrative
expenses:
Direct costs (11,565) (10,559) (56,349) (54,540)
Depreciation and
amortization (2,760) (2,670) (11,033) (10,109)
Share-based
compensation (471) (605) (2,969) (2,565)
Total selling,
general and
administrative
expenses (14,796) (13,834) (70,351) (67,214)
Provision -- -- (4,846) --
Research and
development
costs (1,276) (1,010) (4,980) (5,238)
Write-off of
equipment (972) (642) (3,719) (3,508)
Gain on disposal
of equipment 58 127 525 158
Gain on
settlement of
lease
liabilities -- -- -- 391
Income from
operating
activities 3,488 6,848 23,542 48,846
Finance costs -
loans and
borrowings and
exchangeable
promissory
notes (1,914) (1,963) (7,090) (8,771)
Finance costs -
lease
liabilities (304) (308) (1,180) (899)
Impairment and
write-off of
intangible
assets (1,027) -- (1,027) --
Foreign exchange
(loss) gain (2,055) 6,857 (6,303) 8,628
Income before
income taxes (1,812) 11,434 7,942 47,804
Income tax
recovery
(expense):
Current (18) 2,318 486 (141)
Deferred 4,966 1,140 7,151 10,244
Income tax
recovery 4,948 3,458 7,637 10,103
Net income 3,136 14,892 15,579 57,907
Other
comprehensive
(loss) income
Foreign currency
translation
differences on
foreign
operations (1,038) 4,759 (3,679) 6,063
Total
comprehensive
income $ 2,098 $ 19,651 $ 11,900 $ 63,970
Net income per
share - basic $ 0.09 $ 0.43 $ 0.46 $ 1.67 Net income per share - diluted $ 0.08 $ 0.38 $ 0.42 $ 1.51
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Year ended December 31, 2025 and 2024
Canadian dollars in '000s
Share TreasuryShares Exchangeable Contributedsurplus Accumulatedothercomprehensiveincome Retained Totalshareholders'equity
capital earnings
promissory
("EP") Notes
Balance,
December 31,
2023 $ 197,380 $ (709) $ 1,242 $ 17,002 $ 13,088 $ (48,535) $ 179,468
Comprehensive
income -- -- -- -- 6,063 57,907 63,970
Repurchased
pursuant to
normalcourse
issuer bid (6,533) -- -- -- -- (426) (6,959)
Accrued
purchases under
thenormal
course issuer
bid (1,855) -- -- -- -- (214) (2,069)
Contributed
surplus on
treasuryshares
vesting -- 240 -- (240) -- -- --
Issued pursuant
to stock
optionexercises 6,524 -- -- (2,529) -- -- 3,995
Share-based
compensation -- -- -- 3,175 -- -- 3,175
Balance,
December 31,
2024 $ 195,516 $ (469) $ 1,242 $ 17,408 $ 19,151 $ 8,732 $ 241,580
Share Treasuryshares EP Contributedsurplus Accumulatedothercomprehensiveincome Retained Totalshareholders'equity
capital Notes (loss) earnings
Balance, December
31, 2024 $ 195,516 $ (469) $ 1,242 $ 17,408 $ 19,151 $ 8,732 $ 241,580
Comprehensive
(loss) income -- -- -- -- (3,679) 15,579 11,900
Repurchased
pursuant
tonormal course
issuer bid (10,062) -- -- -- -- (89) (10,151)
Accrued purchases
under thenormal
course issuer
bid 502 -- -- -- -- -- 502
Contributed
surplus on
treasuryshares
vested -- 240 -- (138) -- -- 102
Issued pursuant
to stock
optionsexercised 4,299 -- -- (1,689) -- -- 2,610
Share-based
compensation -- -- -- 2,230 -- -- 2,230
Balance, December
31, 2025 $ 190,255 $ (229) $ 1,242 $ 17,811 $ 15,472 $ 24,222 $ 248,773
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended December 31, 2025 and 2024
Canadian dollars in '000s
Three months ended December 31, Year ended December 31,
2025 2024 2025 2024
Cash provided by
(used in):
Operating
activities:
Net income $ 3,136 $ 14,892 $ 15,579 $ 57,907
Non-cash
adjustments:
Income tax
recovery (4,948) (3,458) (7,637) (10,103)
Depreciation,
amortization
and impairment 11,761 9,347 42,691 41,033
Share-based
compensation (559) 750 2,330 3,175
Write-off of
equipment 972 642 3,719 3,508
Gain on disposal
of equipment (58) (127) (525) (158)
Gain on
settlement of
lease
liabilities -- -- -- (391)
Provision (4,115) -- 731 --
Write-down of
inventory
included in
cost of sales 2,436 355 2,518 782
Finance costs -
loans and
borrowings and
exchangeable
promissory
notes 1,914 1,963 7,090 8,771
Finance costs -
lease
liabilities 304 308 1,180 899
Income tax
refund (paid) 108 (398) (271) (4,363)
Unrealized
foreign
exchange loss
(gain) 2,032 (6,575) 6,332 (8,692)
12,983 17,699 73,737 92,368
Changes in
non-cash
operating
working capital 27,470 3,235 17,942 (2,191)
Cash flow -
operating
activities 40,453 20,934 91,679 90,177
Investing
activities:
Property, plant
and equipment
additions (12,465) (2,836) (49,382) (41,927)
Intangible asset
additions (64) (1,123) (477) (15,523)
Proceeds on
disposal of
property, plant
and equipment 200 235 760 1,768
Changes in
non-cash
investing
working capital (6,136) (10,297) 1,393 (800)
Cash flow -
investing
activities (18,465) (14,021) (47,706) (56,482)
Financing
activities:
Advances of
loans and
borrowings, net
of upfront
financing
fees 10,974 -- 13,656 10,000
Repayments on
loans and
borrowings (5,328) (5,243) (15,091) (27,259)
Payments on
lease
liabilities,
net of finance
costs (1,206) (1,069) (4,249) (3,601)
Interest paid (1,700) (1,968) (6,833) (8,469)
Common shares
repurchased
pursuant to
normal course
issuer bid (3,463) (4,951) (10,151) (9,028)
Proceeds on
stock options
exercised -- 305 2,610 3,995
Changes in
non-cash
financing
working capital (34) 985 (2,103) 2,069
Cash flow -
financing
activities (757) (11,941) (22,161) (32,293)
Effect of
exchange rate
on changes in
cash (719) 328 46 659
Change in cash 20,512 (4,700) 21,858 2,061
Cash, beginning
of year 14,138 17,492 12,792 10,731
Cash, end of
year $ 34,650 $ 12,792 $ 34,650 $ 12,792
ACT Energy Technologies Ltd., based in Calgary, Alberta, Canada, is incorporated under the Business Corporations Act (Alberta) and operates in the U.S. and Canada under Altitude Energy Partners, Discovery Downhole Services in the U.S., and Rime Downhole Technologies, LLC in the U.S.. ACT's common shares are publicly-traded on the Toronto Stock Exchange under the symbol "ACX".
ACT is a trusted partner to North American energy companies requiring high performance directional drilling services and related downhole technologies. We work in partnership with our customers to tailor our equipment and expertise to meet their specific geographical and technical needs. Our experience, technologies and responsive personnel enable our customers to achieve higher efficiencies and lower project costs. For more information, visit www.actenergy.com.
SOURCE ACT Energy Technologies LTD.
/CONTACT:
Copyright CNW Group 2026
(END) Dow Jones Newswires
March 25, 2026 06:00 ET (10:00 GMT)
Comments