Thank you for standing by. This is the conference operator. Welcome to Total Energy's second quarter conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star and zero. I would now like to turn the conference over to Daniel Halyk, President and CEO of Total Energy Services Inc. Please go ahead. Thank you. Good morning and welcome to Total Energy Services second quarter 2022 conference call. Present with me this morning is Yuliya Gorbach, Total's VP Finance and CFO. We will review with you Total's financial and operating highlights for the three months ended June 30, 2022, and then provide an outlook for our business and open up the phone lines for questions. Yuliya, please proceed. Thank you, Dan. During the course of this conference call, information may be provided containing forward-looking information concerning Total's projected operating results, anticipated capital expenditure trends, and projected activity in the oil and gas industry. Actual events or results may differ materially from those reflected in Total's forward-looking statements due to a number of risks, uncertainties and other factors affecting Total's businesses and oil and gas services industry in general. These risks, uncertainties, and other factors are described under the heading Risk Factors and elsewhere in Total's most recently filed annual information form and other documents filed with Canadian provincial securities authorities that are available to the public at www.sedar.com. Our discussions during this conference call are qualified with reference to the notes to the financial highlights contained in the news release issued yesterday. Unless otherwise indicated, all financial information in this conference call is presented in Canadian dollars. Total Energy's financial results for the three months ended June 30, 2022 reflect the continued recovery of global energy industry, particularly in North America. Higher North American activity and the reactivation in late 2021 of two Australian drilling rigs that were out of service during Q2 2021 for its recertifications and upgrades contributed to a significant year-over-year improvement in Total second quarter financial results. Net income of CAD 6.1 million represents Total's fourth consecutive profitable quarter and a substantial improvement from the CAD 2.1 million net loss incurred in Q2 of 2021. Second quarter consolidated EBITDA increased 46% from CAD 19.7 million in Q2 2021 to CAD 28.8 million in the second quarter of 2022. Excluding CAD 8.1 million of COVID-19 relief funds received in 2021, second quarter EBITDA increased 148% on a year-over-year basis. By business segment, Compression and Process Services generated 52% of 2022 second quarter consolidated revenue, followed by Contract Drilling Services at 28%, Well Servicing at 13%, and Rentals and Transportation Services at 7%. In comparison, for the second quarter of 2021, the CPS segment contributed 40% of consolidated revenue, Contract Drilling Services 30%, Well Servicing 23%, and the RDS segment contributed 7%. While reported second quarter consolidated EBITDA increased 46% in 2022 as compared to 2021, EBITDA increased by 170% after adjusting to exclude COVID-19 relief funds and unrealized foreign exchange gains on translation of intercompany working capital balances, resulting in an adjusted quarterly EBITDA margin of 16% as compared to 12% in the second quarter of 2021. Consolidated second quarter gross margin, excluding COVID-19 funds, was four percentage points lower as compared to Q2 2021. This was primarily due to increased CPS contribution to consolidated revenue, which historically had lower margin percentages. Excluding COVID-19 relief funds, gross margin as a percentage of revenue improved to 21% for the second quarter of 2022, as compared to 17% in Q2 of 2021. Selling, general, and administrative expenses for the second quarter of 2022 increased by CAD 4 million or 67% compared to Q2 of 2021 as employee compensation was reinstated to pre-COVID levels. Higher profit-based employee compensation was recognized in certain segments and no COVID-19 funds were recorded during the quarter, compared to CAD 0.8 million of COVID-19 relief funds received in Q2 of 2021. The improvement in North American drilling activity and the reactivation of two Australian drilling rigs contributed to a 70% year-over-year increase in the second quarter total operating drilling days in CDS segment. This, combined with a 13% increase in revenue per operating day, resulted in a 92% year-over-year increase in second quarter CDS segment revenue. This increase in revenue was partially offset by cost inflation and a lack of COVID-19 relief funds in 2022, resulting in second quarter CDS segment EBITDA increasing by 87% as compared to 2021. Increased industry activity and market share gains contributed to a 79% increase in second quarter Canadian operating days. Price increases and the mix of equipment operating contributed to a 36% year-over-year increase in second quarter Canadian drilling revenue per day, which underpinned a 144% year-over-year increase in CDS's second quarter Canadian revenue. Improving industry conditions and market share gains in the United States contributed to a 49% year-over-year increase in second quarter operating days and 25% increase in drilling revenue per day, which in turn drove 86% year-over-year increase in second quarter U.S. D rilling evenue. Second quarter operating days in Australia increased by 95% compared to 2021 as two rigs returned to service following completion of recertifications and upgrades. This contributed to a 41% increase in Australian second quarter drilling revenue, although revenue per day decreased due to extended wet weather conditions in 2022 that resulted in lower standby rates being received on several rigs. Improving North American industry conditions contributed to a 75% increase in second quarter equipment utilization and a 122% increase in second quarter revenue in the RDS segment. Segment EBITDA increased at a lower rate than revenue due to equipment reactivation costs and operating cost inflation. The absence of COVID-19 relief funds in 2022 also contributed to a lower year-over-year second quarter EBITDA margin in the RTS segment. Second quarter revenue in total CPS segment increased by 176% as compared to 2021. This segment saw a seventh consecutive quarterly increase to its fabrication sales backlog, which was 216% higher on a year-over-year basis and marginally higher on a sequential quarterly basis. Strong natural gas prices provided tailwinds for the CPS's segment parts and service and rental business lines, with second quarter utilization of the compression rental equipment fleet increasing by 15% as compared to 2021. CPS segment EBITDA for the second quarter of 2022 increased by 95% on a year-over-year basis. With high production levels and improved pricing with a substantial completion in prior quarters of legacy orders received when industry conditions were less favorable, CPS segment operating income margins improved significantly in the second quarter of 2022. However, the absence of COVID relief funds in 2022 resulted in a year-over-year decrease in second quarter CPS's segment's EBITDA margin. Second quarter revenue increased by 21% in our well servicing segment as compared to 2021, underpinned by a 17% increase in service hours and a 3% increase in revenue per service hour. The increases in revenue per service hour in Canada and the United States were offset by decrease in Australia as extended wet weather conditions resulted in a lower standby rates being received for several rigs. Second quarter EBITDA and EBITDA margin decreased in well servicing segment as compared to 2022 as price increases were offset by cost inflation and the absence of COVID-19 relief funds in 2022. Total Energy's financial and liquidity position remains very strong. During the second quarter of 2022, Total repaid CAD 10.7 million or 6% of bank debt and repurchased 293,034 common shares under company's normal course issuer bid at a total cost of CAD 2.4 million. Total's net debt position at June 30, 2022 was CAD 43.7 million and is the lowest since we completed the acquisition of Savanna in June of 2017. Total currently has CAD 125 million of credit available under its CAD 225 million of available credit facilities. Total Energy's bank covenants consist of a maximum senior debt to trailing twelve-month bank-defined EBITDA of three times and a minimum bank-defined EBITDA to interest expense of three times. At June 30, 2022, company's senior bank debt to bank EBITDA ratio was 0.72, and the bank interest coverage ratio was 22.74 times. Thank you, Yuliya. We are pleased with our second quarter results. While economic uncertainty and commodity price volatility contributed to negative equity market conditions in the latter part of the second quarter, energy industry fundamentals remained strong and underpinned our fourth consecutive profitable quarter. Despite significant supply chain challenges, cost pressures, and the absence of COVID relief, our financial results for the second quarter of 2022 improved both on a sequential quarterly and year-over-year basis. Oil and natural gas prices remain relatively strong. Notwithstanding continued global economic and political uncertainty, following several years of industry underinvestment, the near-term outlook for activity levels is positive. While many producers remain constrained in their activity relative to prior periods of similarly high commodity prices, capacity attrition within the global energy service industry has contributed to improving market fundamentals in all of Total's business segments. In this environment, Total's board has approved a CAD 14.1 million increase to the company's 2022 capital expenditure budget, which now stands at CAD 56.2 million. CAD 10 million of this increase will be directed towards continued equipment upgrades and new equipment purchases in the CDS, RTS, and Well Servicing segments. The remaining CAD 4.1 million relates to capital lease obligations for light-duty vehicles for deployment in all business segments. After funding the remainder of our capital budget, given current market conditions, continued debt repayment and share buybacks remain attractive opportunities to direct the significant cash flow we expect to generate for the remainder of 2022. We also continue to evaluate targeted capital investments as well as industry consolidation opportunities, and we'll pursue any that meet our investment criteria. As we look forward to a busy second half of the year, I would like to thank all of our employees for their continued focus and commitment to conducting our operations in a safe and responsible manner. I would also like to acknowledge our General Counsel, Cam Danyluck, who will be leaving Total to pursue a new career opportunity with an oil and gas producer. On behalf of the Board of Directors and employees of Total Energy, I'd like to thank Cam for his excellent service over the last eleven and a half years and look forward to working with him in the future as a customer. I would now like to open up the phone lines for any questions. Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. Our first question comes from Cole Pereira of Stifel. Please go ahead. Hi. Good morning, everyone. The CPS segment obviously looked very strong. There was that CAD 7 million of contract cancellation revenue, but was there anything else one-time or lumpy in there? Or absent the cancellation fee, is Q2 sort of a reasonable run rate for that business going forward? Yes. The cancellation revenue is simply the realization of a contract. To back that out is not, you know, that would be not reflecting the normal operations. It was simply a contract that or contracts that were not completed. You know, the payments reflected the terms of the contract as well as there's costs associated with those contracts. Okay. Got it. Yeah, it reflects a normal, improving market in compression and process equipment. Okay. Got it. You kinda touched a little bit on it, but so was the cancellation just driven by a change in customer terms, or if you could give any color there, that'd be helpful? You know, we're not inclined to discuss specific contracts in any detail. You know, the bottom line is, you know, we noted it simply, I guess, because we have to, but the reality is, you know, the payments simply reflected amounts owing under contracts that were terminated prior to completion and delivery of the final goods. There's nothing special about it. Very much normal, Cole. Okay. Got it. Thanks. It sounds like pricing's moving up across all business lines. I mean, is there anyone in particular that might be moving up ahead of the others? You know, again, it's a pretty active spot market, and so I'd be hesitant to say much in particular as we're currently in all divisions, you know, working to get our margins up. What I would say generally is, you know, the supply-demand dynamics in all four business segments have been steadily improving and supporting price increases. You know, we're, you know, as you're well aware, Cole, the last few years have not been sustainable pricing, and you know, we're finally starting to see some material traction in restoring sustainable pricing to our business. Okay. Got it. Thanks. On the M&A front, I mean, any meaningful changes from your prior view that might make a transaction more likely? I mean, have you seen valuation expectations narrow or anything of that nature? Yeah. You know, the biggest challenge right now for us on the M&A front is our cost of equity. You know, we judge our investment opportunities relative to our cost of capital, which, when your cost of equity is very high, that makes it challenging. You know, it's all relative to a certain extent. You know, we've been quite active in receiving and evaluating opportunities. You know, several have not proceeded due to non-financial considerations. You know, but I would say high level, Cole, we're big believers in industry consolidation, and we'll continue to try and do that, you know, on a basis that works for our owners. Okay, great. That's all for me. Thanks. I'll turn it back. Thanks, Cole. Our next question comes from John Gibson of BMO Capital Markets. Please go ahead. Morning, all, congrats on the strong quarter here. I just wanted to kinda lead off with Cole's questions on the CPS segment. Nice to see the big jump in margins. I'm just wondering if it's a good run rate to think about going forward or will the one-time item sort of impact things going forward a little bit as well? Yeah. You know, again, we're hesitant to give forecasts. I would say generally, you know, I thought we did a pretty good job in Q1 telegraphing that, you know, you shouldn't read too much negative into those, you know, as we were wrapping up pretty competitively bid projects that we would start to see margins improve. You know, Q2 definitely started to see that and, you know, we're gonna continue to work hard to be competitive but also get our margins up. You know, I think you're gonna continue to see, you know, barring any material industry downturns, progress on all fronts to restoring sustainable pricing. Got it. Thanks. Moving to the drilling side, can you give any sense of rig additions in the back half of the year and into 2023, particularly North America, just given the increase to your capital program? We've been steadily upgrading rigs, particularly in Canada. We also obviously did some in Australia here that went back. We're currently running more rigs in Canada than we did at any time in Q1. We expect that to continue to trend up as we go into the fall, winter season. The higher capacity rigs are effectively sold out. We've been steadily doing select upgrades to increase our, I'd call it, deeper capacity, higher pressure rig fleet, and that's part of our CapEx increase. On the U.S. side, you know, we're closing in on becoming fully sold out of marketable rigs. You know, at some point, there'll be not much to do there other than perhaps look at relocating equipment. given the strength in the Canadian market, I'm not sure we're too inclined to do that. Bottom line is, you know, we're definitely starting to see equipment shortages. You know, even on the single side, we're, I think, on our TDS 3000 side, pretty close to sold out there. It's becoming a tighter market for quality equipment for sure. Thanks. I appreciate that color. Last one for me, just can you maybe touch on the labor market? Any areas of strength or weakness across each of your business lines? You know, labor's been a challenge as we've ramped up, but we actually see things easing a little bit, surprisingly. I think part of it is a function of, you know, this industry has been very, very difficult, particularly in Canada for a long time. You know, we've had good steady work for you know, several quarters now. I think just guessing that there's a sense within the workforce, particularly experienced workers that left for other opportunities that you know, we're gonna have a good run here and it seems to be attracting people back. Again, you know, it's always our number one challenge, but we're having reasonably good success attracting people, and so we hope to continue to do that. Okay, great. Again, I appreciate the color. I'll turn it back. Thanks, John. Once again, if you have a question, please press star then one. Our next question comes from Tim Monachello of ATB Capital Markets. Please go ahead. Hey, good morning, everyone. Good morning, Tim. Most of my questions were answered, but I'm wondering if you can provide a little bit more detail or help quantify the impact of the weather disruptions in Australia in the quarter. It was material. Our standby days were up materially, and standby without crews, due to wet weather, which typically Q1 is your wet season in Australia. That extended well into Q2 and really, you know, substantively delayed a lot of drilling programs and you know, production and completion programs. It had a material impact on active drilling and active well servicing days. You know, we're seeing that abate a bit here, but you know, I can't predict the weather. It had a material impact on the second quarter for sure. Q3 is still somewhat impacted. Is that the right way to think of it? It seems to be abating. Again, all it takes is one good rain there to delay things, but it's definitely abating thus far in July, August. It did carry on a bit in July. It seems to be abating here. Knock on wood. The base rates in Australia, obviously, there's a mix component there with standby revenues. Is it the right interpretation to think that the base rates are largely unchanged? For the most part, yes. Okay. You know, we're going into contract discussions and, you know, with cost inflation and that, but that's, you know, go forward situation. You know, the difference I think in Q2 versus Q1 even was more standby without crews as opposed to standby with crews. Just simply it was so wet that the operators just sent everyone home as opposed to waiting, trying to move rigs. Okay. My next one just on the CapEx increase. You must be getting a little bit more visibility in terms of the outlook for activity. Was the CapEx increase, you know, based on a view to the second half activity or more to 2023? If you could just maybe provide an update to, you know, how your visibility has progressed. These are near-term opportunities that are in direct response to specific opportunities that you know, we'll see commence in this year. You know, the last thing we wanna do is start doing upgrades or acquiring equipment that you know, shows up in the middle of February right in time for spring breakup. You know, they're rifle shot investments that are geared up towards better positioning us for what we see as a pretty busy winter coming up. I'd call them. Okay, got it. Last one for me. Can you just, I guess, update your capital allocation strategy as you go through the year and I guess where return to shareholders fits into that in terms of increasing the dividend, over the next, I don't know, 12 months or so? Sure. You know, as I mentioned, we have a strong understanding and appreciation of our weighted average cost of capital. Any investment we make, you know, has to achieve economic profit. That's a substantial portion of the senior executive team's annual incentive compensation, which, you know, we haven't earned that for a few years now, but hoping to get back. That's, you know, that's the bottom line. You know, I think we've always been seen as being stewards of capital and we respect the fact it's our owners' capital, not our capital. If we can't get economic profit with any degree of certainty, we're inclined to give that back to owners and not over-capitalize the business. You know, now we have both the dividend and share buybacks. You know, given our current equity, cost of equity share buybacks are certainly a pretty compelling opportunity for us to continue to deploy capital. It also, you know, is sustainable in the sense that, you know, it's discretionary. We can not put the company in a bad position by committing to things that, you know, that we can't fulfill in the medium to long term. In terms of that, I guess then, are leading edge opportunities meeting your threshold for returns? Yes. Okay. That's great. I appreciate it. I'll turn it back. Thanks, Tim. This concludes the question and answer session. I would like to turn the conference back over to Mr. Halyk for any closing remarks. Thank you everyone for participating in our call, and, we hope you have a good summer and look forward to speaking with you after our third quarter. Have a good week. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.