Thank you for standing by. This is the conference operator. Welcome to Total Energy's Q4 2024 Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will 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 then zero. I would now like to turn the conference over to Daniel Halyk, President and CEO of Total Energy Services. Please go ahead. Thank you. Good morning and welcome to Total Energy Services' Q4 2024 conference call. Present with me is Yuliya Gorbach, Total Energy Services' VP Finance and CFO. We will review with you Total Energy Services' financial and operating highlights for the three months ended December 31, 2024, and then provide an outlook for our business and open up the phone lines for any questions. Yuliya, please go ahead. 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 the oil and gas service 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.sedarplus.ca. 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 CAD. Total Energy's financial results for the three months ended December 31, 2024, reflect relatively stable industry conditions in Canada and Australia and lower drilling and completion activity levels in the U.S. Consolidated revenue for the Q4 of 2024 was 15% higher compared to Q4 2023, with the addition of Saxon offsetting low U.S. drilling and completion activity. Q4 consolidated EBITDA was CAD 4.7 million lower than in 2023 due to lower U.S. activity, extended holiday shutdowns in Canada, and wet weather conditions in Australia, and the negative impact of foreign exchange inflation differences more than offsetting improved CPS and RTS segment margins. Excluding CAD 4.1 million year-over-year negative impact due to foreign exchange inflation differences, Q4 EBITDA declined by 1% compared to 2023. Geographically, 48% of Q4 revenue was generated in Canada, 33% in the United States, and 19% in Australia, as compared to the Q4 of 2023, when 54% of consolidated revenue was generated in Canada, 37% in the United States, and 9% in Australia. By business segment, the CPS segment contributed 47% of Q4 consolidated revenue, followed by the Contract Drilling Services segment at 34%, Well Servicing at 11%, and the RTS segment at 8%. In comparison, for the Q4 of 2023, the CPS segment generated 45% of Q4 consolidated revenue, followed by the Contract Drilling Services at 35%, Well Servicing at 11%, and Rentals and Transportation Services contributing 9%. Q4 gross margin was 23% as compared to 27% for the prior year. The primary reason for the decrease in the Q4 consolidated gross margin was a year-over-year decrease in operating margins in the CDS and well servicing segments, delays in deploying upgraded rigs, and reduced activity in Australia due to wet weather conditions, lower U.S. activity levels, and a CAD 4.1 million negative impact on Canadian CDS segment operating income arising from foreign exchange translation differences were primary reasons for such lower CDS and well servicing segments operating margins. Partially offsetting the lower CDS and well servicing segment margins were improved operating margins in the CPS and RTS segments. As compared to 2023, the CDS segment saw consolidated Q4 revenue increase by 12%, a 17% increase in revenue per operating day, more than offset a 4% decrease in operating days. Canadian CDS revenue was 12% lower in Q4 2024 as compared to the same quarter of 2023, as a 1% increase in revenue per operating day was offset by a 13% decrease in operating days. Canadian operating days were negatively impacted by extended holiday shutdowns in December. In the U.S., a 17% increase in revenue per operating day was offset by a 66% decrease in operating days, resulting in a 60% decrease in CDS revenue and the realization of an operating loss. In Australia, Q4 operating days increased by 110% following the acquisition of Saxon in March of 2024. Higher day rates on Saxon's deeper drilling rig fleet and a newly constructed drilling rig that was deployed in the Q3 resulted in a 173% year-over-year increase in Australian Q4 revenues and a 30% increase in Q4 Australian CDS segment revenue per operating day. Costs to reactivate several upgraded rigs and the crude attachment cost incurred during extended wet weather conditions resulted in a slight operating loss for the Q4. RTS segment revenue for the Q4 decreased compared to 2023 due to lower activity in the U.S. Effective cost management and change in the mix of equipment operating contributed to a 13% year-over-year increase in Q4 segment EBITDA and a 17% increase in EBITDA margins. Q4 revenue in total CPS segment was 22% higher as compared to 2023. Increased rental and parts and service activity, combined with improved fabrication sales margins, resulted in a 23% year-over-year increase in the Q4 CPS segment EBITDA. The quarter-end fabrication sales backlog increased to CAD 189 million compared to CAD 162.8 million backlog at December 31, 2023. Sequentially, the quarter-end sales backlog remained consistent with CAD 189 million at September 30, 2024. In well servicing, a 10% increase in revenue per operating hour, combined with a 4% increase in operating hours, resulted in a 15% year-over-year increase in the Q4 consolidated well servicing revenue. Increased Canadian and Australian service rig utilization was partially offset by a substantial decline in U.S. activity. Price increases in Canada and Australia following the completion of rig upgrades more than offset weaker pricing in the United States, resulting in a 10% increase in the segment's revenue per operating hour. Increased utilization and pricing in Canada contributed to a 41% increase in Canadian well servicing operating income. This increase was offset by operating losses in the U.S. and Australia. The U.S. operating loss was due to substantially lower activity levels. In Australia, costs to reactivate several upgraded rigs and the crude attachment cost incurred during extended wet weather conditions resulted in the Q4 operating loss. Overall, the Well Servicing segment experienced a 20% year-over-year decrease in the Q4 EBITDA and a 29% decrease in segment EBITDA margins. From a consolidated perspective, Total Energy financial position remained very strong. At December 31, 2024, Total Energy had CAD 78.7 million of positive working capital, including CAD 38.4 million of cash. Working capital decreased from December 31, 2023, as CAD 42 million of mortgage debt due in April of 2025 became current during the Q2 of 2024. During the Q4, Total Energy repaid CAD 25.5 million of bank debt, such that total bank debt less cash was CAD 72.5 million at December 31, 2024. Total Energy's bank covenants consist of a maximum senior debt to trailing 12-month bank-defined EBITDA of three times and a minimum bank-defined EBITDA to interest expense of three times. At December 31, 2024, the company's senior bank debt to bank-defined EBITDA ratio was 0.25x and the bank interest coverage ratio was 25.81x. Thank you, Yuliya. 2024 represented a record year for Total Energy. Despite some challenges towards year-end, Total Energy was able to generate significant free cash flow during the Q4 that was directed towards a CAD 25.5 million reduction of bank debt and the return of CAD 7.1 million to our shareholders through dividends and share buybacks. For 2024, a total of CAD 35.2 million, or CAD 0.92 per share outstanding at year-end, was returned to our owners by way of dividends and share buybacks. Relatively strong oil prices and improving natural gas prices, due in part to increasing LNG export capacity, are supportive of stable North American industry conditions. Strong Asian demand for LNG and a tight domestic natural gas market provide tailwinds for the Australian market. However, recent downward pressure on oil prices, combined with continued global political and economic uncertainty and recent trade tensions, give rise to caution. In such an environment, Total remains focused on operating in a safe and efficient manner and exercising discipline in the deployment of capital. Total's preliminary 2025 capital budget of CAD 61.9 million includes CAD 27.6 million of maintenance capital that is required to sustain current operating levels. An additional CAD 34.3 million is being directed towards equipment upgrades and other compelling growth opportunities within our existing business segments. The full impact of our growth investments is expected to be realized by the Q4 of 2025. Despite the ongoing tariff uncertainty, North American demand for compression and process equipment remains strong, and current bid activity is high, such that visibility for our CPS segment is reasonably clear well into the back half of this year. Notwithstanding current market uncertainty, Total's strong financial position allows us to continue to provide our owners with stable and industry-leading returns. In that regard, our board of directors approved an 11% increase to our dividend, commensurate with the declaration of our Q1 dividend, which is payable on April 15th to shareholders of record on March 31, 2025. Finally, I'd like to welcome Gurmeet Bhatia to Total Energy. Ms. Bhatia joined us in January as Corporate Controller following a successful 20-year career at ATCO and replaced Ashley Ting, who left to pursue another opportunity. I would like to thank Ashley for her excellent service since she joined Total in 2017 with the acquisition of Savannah and wish her the very best in her new endeavor. 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 and 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 and two. Today's first question comes from Tim Monachello with ATB Capital Markets. Please go ahead. G ood morning. G ood morning, Tim. Curious, could you guys help me understand the quantum of reactivation costs and one-time costs that you saw in the Well Servicing and CDS segments in Q4? We're hesitant to break those out. What I would say is you'll begin to see Australia normalize in Q1. I think partly we're having a pretty close look at how we're managing labor costs during these situations. Q4 was a bit unique in the sense that in Australia, you have a fairly prescribed rig acceptance process where up until the rig is accepted, you don't have any cost recovery. We had some delays in getting rigs out in part because of wet weather conditions. We were eating a lot of costs leading up to that. We're having a pretty good look at how to better manage that process. For that reason, I don't want to suggest that what happened in Q4 is a normal situation. Quite frankly, we were disappointed with what happened there. Do you think that, I guess, those one-time-ish costs in Q4 were fully the factors that drove the margin degradation from where we saw it in Q3? What I expect is you're going to see much better margins coming out of Australia, in part due to better management of rig startups. Like I said, I don't want to start quantifying largely because I don't like making excuses. I expect that going forward, we'll be better managing the costs during these rig commissionings and startups. What I would say is I would expect that Q4 is an aberration. We've got further rig startups in Q1. We're also seeing a lot of opportunity for additional rig reactivations. We're not going to start adding more until we know what we're doing is being well managed. Okay. You have two drilling rigs in Australia being reactivated in the first half, one in Q1, one in Q2, and another service rig in Q1. Correct. Is that correct? Correct. We have some other opportunities that we have not pulled the trigger on yet. Part of that is just to make sure that how we are managing these reactivations is efficient. In fairness, it has been extremely busy over there. We have reactivated a lot of iron in the last couple of quarters. Got it. Can you remind me just how many rigs were upgraded in Australia in 2024 for both the service and well servicing fleets? Three service rigs. Three service rigs? Three service rigs and five drilling rigs, I believe. I'd have to go back and check. Plus, we had some minor recertification, not major upgrades, but recertifications. It's been a busy, busy year there. Okay. How's weather in Australia playing out in Q1? Have you seen that noise, or is it still pretty wet? Q1 is kind of their breakup quarter. It's been up and down a bit. Currently, we have a few rigs shut down due to there's a typhoon or a cyclone or something off the West Coast. That's kind of par for the course in Q1. Definitely, Q4 was wetter than kind of normal. Hence, that threw a bit of a wrench into our rig reactivations, particularly in December, but slowed things down a bit. Q1 is kind of their breakup quarter. Again, we're having a hard look at how we're managing these reactivations and helping spread the risk out on costs. Most of those deployments did not happen in Q4, and it is just kind of concentrated there. By no means are you saying it is an excuse, but it is definitely going to be managed quite a bit more precisely. Okay. That's helpful. How many did you expect activity in Australia generally to be higher or lower in Q1 versus Q4, just given typhoon and other weather impacts? We're into March. Generally, with the rigs that are being reactivated, barring weather shutdowns, it's going to be higher. Again, check the forecast out. Like I said, we've got, I believe, two drilling rigs right now shut down because of weather. They have no travel restrictions. Got it. I guess in a more normalized scenario, once we get into Q2 and weather's better and you've got all the rigs that you're planning to reactivate in the field, how many drilling and service rigs do you think you'll have running? We've got the two drilling rigs coming on. That would take us to 12. Another service rig would take us to 8. Pretty significant increase year over year. Like I said, we need to do a better job with these startups. We need to do a better job working with our customers to, how would you say, bear the cost of labor. Again, part of this is the labor laws in Australia are not the same as North America. It is much more of a fixed cost. Like I said, we're digging into this pretty deep to make sure that going forward, we have more efficient startups on some of these rigs. Got it. I've got some more questions, but maybe I should get back in the queue unless there's other people waiting. I would suggest you go ahead. Okay. The capital program in Canada, a lot of capital allocated to upgrading rigs. How should we think about that from a market share or activity perspective? Can you talk a little bit about that, your expectations there and what those upgrades might look like? We're doing some work in our service rig division. We've had a very good experience upgrading service rigs to really expand their capability, both for thermal operations and, I would call it, deep basin operations. We've taken a pretty steady approach to continuing to expand our fleet there. That's part of it. On the drilling rig side, the primary project this year, and we're somewhat tight-holed on it, but we're doing a pretty significant upgrade to an existing mechanical double that will come out as an AC triple. There's some intellectual property involved with that. I think our sales groups will begin marketing. Normally, I wouldn't say much, but we've given them the go-ahead to start marketing that rig, which will not be done until Q4. It's going to be a pretty special rig. Like I said, we've got some intellectual property protection in place for the design. Yeah, that's interesting. That's, I guess, on spec at this point? It is, but I expect I probably unleashed the hounds right now. There is a lot of demand for this style of rig. In particular, we believe this rig will be very sought after. I am not too worried about that. Yeah, we did it on spec. Interesting. The economics in the market are high enough to do a mechanical double to AC triple conversion. That would be one of the most expensive conversions, I think, in the market. It's not cheap, but I can tell you the cost relative to new build is substantially lower. You can't justify new build right now. Part of the beauty of this is the patented design that we've got. Like I said, it allows us to undertake this conversion at a substantial discount to new build price. I would imagine you have other rigs that could follow suit if this one is picked up. Correct. How long does it convert like that to? Those are all idle mechanical doubles, too. We also, like I said, got patent protection on this. We will be watching closely to ensure no one tries to copy our concept. Sorry. How long do you think the conversion takes? Like I said, we expect the rig to be completed by Q4. Okay. Interesting. Can you talk a little bit about CPS activity and your outlook there for the year? They're doing very well. This tariff uncertainty is definitely, thankfully, I have no hair left to lose. What we've seen is very strong bid activity. Like I said, we'll give an update after Q1 in terms of backlog. There's very strong demand for compression process equipment. It's part of this infrastructure build. The reality of the supply chains in that business is there's so much cross-border activity that it's just, I think the temporary relief here announced yesterday makes a lot of sense. We've got somewhat of a natural hedge insofar as we've got manufacturing capability on both sides of the border. The reality is a lot of the choice of where you fabricate is based on where the end use is, and also shop utilization and windows and that sort of thing. What I can say is that business is performing well, and we expect that to continue. Okay. Great. You mentioned tariffs. Can you talk a little bit about your exposure, what you might be seeing from customers, if there's any hesitancy in your customer base for capital allocation, or if you see people perhaps front-loading ahead of tariffs? What I would say is our order experience suggests not. I think there's a lot of uncertainty that probably has slowed order commitments down. They remain very strong. From our perspective, orders are Ex-works the factory in which they're built as well. Tariffs, whether U.S. or Canadian, that drive up input costs are going to apply to everyone. I would hope that we can get this sorted out. All it's going to do is drive up costs. I would say our experience thus far is it certainly hasn't caused us to be concerned about shop loading over the next several months. I'll put it that way. I got it. Who knows, Tim? Your answer, I'd ask you if you know what's going to happen there. Certainly, the uncertainty is not helpful for anyone. Like I said, I think the industry as a whole is in the same boat. One benefit we have is having production on both sides of the border. Again, the supply chains are so integrated. It's a North American market. It adds complexity and confusion if tariffs are put in place. Yeah. Understood. It's a very dynamic situation. Nobody really seems to know where that's going. In terms of capital allocation, given the dividend bump, can you talk a little bit about your expectations for NCIB activity? The stocks, like most stocks in the service space, are down. Also, how does M&A fit into your strategy for 2025? Our views haven't changed. We look at share buybacks the same as we would any capital investment, including M&A. Right now, our cost of equity is extremely high. Share buybacks are right at the top of the list for capital allocation. M&A has to compete with that. All right. That's all for me. Thanks so much for taking my laundry list of questions, and I'll turn it back. Thanks, Tim. Thanks, Tim. Thank you. The next question comes from Akshay, a retail investor. Please go ahead. Hi, Dan. Thanks for taking my question. Good morning. Good morning. I have two questions, and I apologize. I joined the meeting a little late, so if you've already answered this. First question is on capital allocation, just like the gentleman who asked before on the buyback. I understand what you mentioned, but can we expect the cadence to be similar to, let's say, last year, knowing that the cost of equity is high, the buybacks to be kind of similar to what it was last year? I'm not one to try and predict the future, nor do we give forecasts. Current market conditions make our buybacks extremely compelling. What that looks like in three, six months' time will tell. The other thing is relative to other opportunities. Right now, we've been in blackout for a bit. Obviously, we don't buy during blackout, but NCIB share buybacks right now would be at the top of the list. Got it. Thank you. My other question is just to share the day. You mean by evening, night, somewhere between 2:00 and 3:00. Would you be able to? Sorry, you broke up there. Oh, sorry. Could you start over? You broke up there. Give me a second. One second. Apologies. Is it better now? Yeah, that seems better. Okay. Thank you. I was just mentioning in terms of where the shares trade now on an EBITDA basis, EBITDA last year was about $4.3 million. We are trading somewhere around two to three times. Can you please comment on the long term of the business, viability of the business, and how you look at it three, five, to ten years, and what opportunities may be to look at in the future? Again, I'm not one to kind of get into five-year plans, or that seems quite Soviet to me. I think what we do is we have core principles. We're also flexible, dynamic. Obviously, when we make investments, we're doing that in the context of a macro view. I would say our macro view of our industry is, first of all, demand for oil and natural gas will continue to go up. I think you're seeing the pendulum swing back in terms of energy security and energy reality and affordable energy. The macro background, I think, has and will continue to improve relative to the previous five years. Now, you're going to have cycles. It's a commodity business. From a demand perspective and a public policy perspective, I think the next five years will be better than the previous five. As well, the underinvestment within not just the producer side, but the service side has been massive. The flip side is there's definitely been technological improvements that allow us to do more with less. All in all, you see various numbers that we're replacing a fraction of the reserves that we produce each year. Fundamentally, that catches up with you at some point. Probably more relevant to Total is the significant consolidation and contraction in energy service capacity. Comments earlier, there's no new build economics for drilling rigs today. We are being creative and looking at opportunities to take existing assets, which we put as there's some cost. We look at the incremental capital to put those assets back to work. In certain cases, we believe that provides reasonable and required returns. We are going to continue to be nimble. We'll continue to be opportunistic. What I would say five years from now will be larger and more international would be my guess. Do I think we're going to run out of opportunities to achieve that? No. What those opportunities will be, time will tell. Got it. Thank you. Appreciate it. Does that help? Thank you for taking the time. Thank you. Yeah, it does. Thank you so much. Thank you. Thank you. This concludes the question and answer session. I'd like to turn the conference back over to Mr. Halyk for closing remarks. Thank you, everyone, for joining us. I look forward to speaking with you after we release our Q1 results. Have a pleasant weekend. Thank you. This brings us to a close of today's conference call. You may now disconnect your lines. Thank you for participating, and have a pleasant day.