Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome you to the Total Energy Services Fourth Quarter and Full Year 2025 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star then the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. Thank you. I would now like to turn the conference over to Mr. Daniel Halyk, President and Chief Executive Officer. Please go ahead. Thank you, Krista. Good morning and welcome to Total Energy Services Fourth Quarter 2025 Conference Call. Present with me 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 December 31, 2025, and then provide an outlook for our business and open up the phone lines for 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 most recently filed annual information forms 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 Canadian dollar. Total Energy's results for the three and 12 months ended December 31, 2025 represent record quarterly and annual financial results. Strong North American demand for natural gas compression and process equipment and the deployment of upgraded equipment in Australia more than offset lower North American drilling and completion activity. On a year-over-year basis, consolidated fourth quarter revenue increased by 22%. Contributing to this increase was CAD 45.3 million of increased CDS segment revenue, CAD 4.9 million from Well Servicing and CAD 4.1 million from CDS segment. Fourth quarter EBITDA increased CAD 15.7 million compared to 2024, driven by increased activity and improved fabrication margins in CDS segment and the deployment of upgraded rigs at higher day rates in Australia. Geographically, 41% of fourth quarter revenue was generated in Canada, 36% in the United States and 23% in Australia as compared to the fourth quarter of 2024 when 48% of consolidated revenue was generated in Canada, 33% in the United States and 19% in Australia. By business segment, the compression and process services segment contributed 54% of fourth quarter consolidated revenue, followed by the CDS segment at 29%, Well Servicing 11% and the RTS segment at 6%. In comparison with the fourth quarter of 2024, the compression and process services segment generated 47% of fourth quarter consolidated revenue, followed by the CDS at 34%, Well Servicing at 11% and RTS segment at 8%. Fourth quarter consolidated gross margin was 22% in 2025, which was 130 basis points lower than 2024. Contributing to this decline was an 800 basis points year-over-year increase in fourth quarter revenue contribution from CPS and Well Servicing segments as these business segments historically generate lower margins than the CDS and RTS segments. A year-over-year increase in CPS segment and Australian margins partially offset a decline in RTS and North American CDS and Well Servicing segment financial results. Fourth quarter CDS segment revenue increased 5% compared to 2024. A 22% year-over-year decline in fourth quarter North American operating days was partially offset by a 24% increase in Australian operating days. Segment revenue per operating day increased 15% during the fourth quarter of 2025. Due primarily to increased pricing on upgraded rigs in Australia that was partially offset by a change in the mix of equipment operating and competitive pricing in certain areas in North American markets. Fourth quarter CDS segment EBITDA increased by 3% compared to 2024 due to improved Australian results that was partially offset by a weaker North American result. CDS segment EBITDA margin during Q4 2025 was consistent with 2024 as the decrease in consolidated segment fourth quarter operating days was offset by higher pricing for upgraded rigs and cost management. RTS segment revenue for the fourth quarter increased 3% compared to 2024. This was a result of stable utilization and an increased U.S. rental fleet following a June 2025 acquisition, combined with higher per-utilized rental fees revenue due to a change in the mix of equipment operating. Higher costs associated with a change in the mix of equipment operating, competitive market conditions in this segment, relatively high fixed cost structure resulted in a 27% year-over-year decrease in the fourth quarter RTS segment EBITDA and a 12 percentage point decrease in segment EBITDA margin. Fourth quarter CPS segment revenue increased 39% compared to 2024, driven by an increased fabrication sales, higher parts and sales service activity, and a stable rental fleet utilization. Year-over-year fourth quarter CPS segment EBITDA increased by CAD 10.6 million or 61%. With a substantial completion of certain legacy low-margin fabrication projects, fourth quarter CPS segment EBITDA margins sequentially increased by 526 basis points compared to the third quarter of 2025. The fabrication sales backlog at December 31, 2025 was CAD 446.7 million, which is CAD 257.7 million or 136% higher compared to CAD 189 million backlog at December 31, 2024, and CAD 65.9 million or 17% higher compared to CAD 380.8 million backlog at September 30, 2025. In Well Servicing, a 2% increase in revenue per service hour, combined with a 15% increase in operating hours, resulted in an 18% year-over-year increase in fourth quarter segment revenue. Increased Australian and stable Canadian activity was partially offset by a substantial decline in U.S. activity. Higher pricing and increased fleet utilization following the upgrade of several rigs over the past year contributed to 722% increase in fourth quarter Australian operating income. Offsetting this increase was a decline in North American operating income due to competitive pricing and substantially lower U.S. activity levels. Segment EBITDA for the fourth quarter of 2025 was 123% higher compared to 2024 due to improved Australian results that were partially offset by weaker North American results. From a consolidated perspective, Total Energy's financial position remains very strong. At December 31, 2025, Total Energy had CAD 108 million of positive working capital, including CAD 59.6 million of cash. Cash on hand exceeded bank debt by CAD 4.6 million at December 31, 2025, the first time this has occurred since the acquisition of Savanna in June 2017. Total Energy bank covenants consist of maximum senior debt to trailing 12-month bank-defined EBITDA of 3x and a minimum bank-defined EBITDA to interest expense of 3x. At December 31, 2025, the company's senior bank debt to bank EBITDA ratio was 0.03, and the bank interest coverage ratio was 44.4x. Thank you, Yuliya. The strength and resiliency of Total's business strategy was demonstrated by our ability to generate record quarter and annual results despite persistent global political and economic uncertainty and resulting commodity price volatility. Our substantial investment in Australia over the past two years is beginning to pay dividends. Our record fabrication sales backlog at year-end reflects our growing position in the vibrant North American natural gas compression market. Our ability to generate substantial free cash flow is evidenced by the fact that we were effectively debt-free at the end of 2025 after funding CAD 93.7 million of capital expenditures and returning CAD 38.8 million to shareholders through dividends and share buybacks during the year. Total's exposure to the world's insatiable and growing demand for energy is broad in scope, and the current situation in the Middle East illustrates the sensitivity of the market to any threat of reduced supply. While industry overcapacity continues to weigh on several markets in which we compete, Total continues to pursue targeted investment opportunities that are driven by customer demand. This includes a CAD 31.6 million dollar increase to our 2026 capital budget that we announced yesterday. This capital is being directed towards a substantial upgrade of two drilling rigs, one being an active Australian rig and the other an idle Canadian rig. Total entered 2026 in arguably the strongest position it has ever been in since it was founded in November 1996. The board of directors and leadership teams at both the corporate and divisional level are experienced, committed, energized, and aligned with shareholders. Our balance sheet has never been stronger. Our substantial free cash flow allows for continued growth without unnecessary shareholder dilution, as well as industry-leading shareholder returns through dividends and share buybacks. That said, having experienced several industry cycles over the past three decades, Total remains committed to our founding principles of focus, discipline and growth. As we enter our 30th year in business, on behalf of the board of directors of Total, I would like to acknowledge our many customers, employees, shareholders, suppliers, and other stakeholders that have been essential to our success over the years, and we thank you for your continued trust and support. I would now like to open up the phone lines for any questions. Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw that question, again, press star one. Your first question comes from Josef Schachter with Schachter Energy Research. Please go ahead. Thank you very much. Good morning, Daniel and Yuliya. Good morning, Mr. Schachter. Good morning, Mr. Schachter. Good morning. Congratulations on 30 years. Two questions. This morning, there's a report I read that LNG Canada was getting close to the two BCF. Are you seeing any change in order patterns for drilling activity in Northwest Alberta, Northeast BC, as volumes start moving quicker and shipments quicker? You know, it's an interesting time. We're going into breakup. What I would say generally, Josef, is the tone has shifted in a positive way in the past few weeks. I think where we're seeing immediate opportunity is more on the Well Servicing side, where we're seeing opportunities to put equipment to work to capitalize on current strong spot prices. But definitely, you know, having LNG Canada finally reach close to capacity is definitely going to help. You know, I think the prospect of that, quite frankly, kept Canadian drilling higher than I believe it would have been. Certainly, moving forward, it's important that that operation operate at full capacity. I think it's tough to gauge drilling rig activity going into breakup 'cause it's your normal downturn. I would say definitely the tone of conversations that we're having is more positive than it would have been two, three months ago. How tight are the, you know, the Super Triples or the singles, you know, the high capacity with, you know, all the extras on them, in terms of applications? Are you seeing pricing improvement there, because of the shortage of equipment? Let me put it this way. Our board approved yesterday the upgrade of an existing idle mechanical double to an AC triple. This is similar to the project we completed last year, Josef, which upgraded. Well, it was basically a new rig. That triple went to work last November, and it exceeded our expectations. Our board has approved substantial capital to do another one, and we're doing it on spec. That tells you what we think of that market. Yeah. Last one for me. How does the M&A activity look? Are you looking at more deals? Are the bid-ask between, you know, what you're willing to pay and what others are willing to sell for? Are they wanting cash or are they wanting stock? Are you willing to do deals with using your Total paper? I would say the M&A pipeline is vibrant. There's lots there. Quite honestly, our biggest challenge on that front is we've always remained disciplined in the sense of, you know, acquisitions have to be accretive to our existing shareholders, you know, whether we're paying cash or stock, because we can use our cash to buy our shares back. You know, we did a lot of that last year, and we continue to evaluate any acquisitions relative to all of our investment opportunities, which includes share buybacks. You know, one of the interesting aspects as we enter this year is the effective elimination of our bank debt. Certainly our capacity to fund acquisitions with cash is substantial. But we're willing to use our shares if it makes sense to existing shareholders. I think there's definitely a large portion of the M&A crowd that would love to have shares in our company. Again, it's gotta work for our existing shareholders. If that does, our new shareholders will benefit down the road as they have in the past deals. We're flexible, but we're not gonna do anything that doesn't benefit our current shareholders. Super. Well, thanks for taking my questions. Again, congratulations on 30 years in the best position now. Thank you. Thanks, Josef. Your next question comes from the line of Tim Monachello with ATB Cormark Capital Markets. Please go ahead. Hey, good morning. Good morning, Tim. Nice quarter, congrats on that, and congrats on 30 years. Thank you. Just wanted to start out and just talk a little bit about the decision to exit the U.S. Well Servicing businesses. You know, typically from what I've seen over covering your company, these sort of market downturns and periods of perhaps inefficiency in returns, you sort of use as opportunities to acquire businesses and grow and typically just been very disciplined in terms of pricing and waded through it. This looks like to be a different situation in U.S. Well Servicing business. I thought you were looking to get bigger in the U.S., not smaller. I'm just curious if you can just sort of address those strategic points for me. Sure. No, I would say what we did was completely consistent with our philosophy. You know, we look at any investment, and evaluate on a go-forward basis. Can we get a return on the capital that's being invested that exceeds our WACC over time? When we acquired Savanna in 2017, Well Servicing was new to us. You know, we were pretty open saying we wanted to see what the business looked like, evaluate over the full business cycle, and you know, we would proceed accordingly, either keep it or sell it. If we kept it, we'd like to get bigger. I think we came to the conclusion that there were probably better uses of our time and capital than U.S. Well Servicing. I would say we're not afraid of competition, far from it. The flip side is, you know, we take a full cycle view, and certainly the market that we were in was in a tough spot. Quite honestly, it came down to looking forward, is it better to have our capital and time tied up in that business, or do we deploy it elsewhere? If we were gonna tie it up, we needed to get bigger. Our view is, there were other opportunities to grow in the U.S. that were probably more compelling. We made the call to exit. We did sell the equipment in February. We have a deal to sell the real estate that'll close before the end of Q2. Like I said, our book values there were solid and you'll get the results of that in part of it with the equipment and with our Q1 numbers. We'll book again. Like I said, it's as much where do you spend your time as your money. Completely consistent with our philosophies. We put our time and money where we see the best returns. Okay, I appreciate that. Thanks. I have a follow on. First, can you just give me an overview or high-level overview of what your asset portfolio in that business was? Like, how many rigs you had and what was the real estate portfolio? There was 12 service rigs involved. We owned real estate, which the total assets, I think, we don't break that out per se, but you'll get some, an update with Q1. I would say on a billion-dollar balance sheet, it's not material, but I would also say that similar to the decommissioning of our 10 drilling rigs in Canada, six service rigs in Canada, which effectively we cut up for scrap metal, we will record a meaningful gain on sale on that equipment just given our carrying values were pretty low. We sold it in the context of the market, and we were you know, I think it was a fair deal for both sides. Like I said, going forward, we'll look to deploy that capital elsewhere. Honestly, in the big picture, on a billion-dollar balance sheet, not particularly relevant. I think the bigger issue was freeing up our time to focus on things where we believe we can get better returns. Yuliya, do you wanna add anything there? Hey, Tim, if you want a little bit more information, if you look at financial statements, it's there. In the notes? Yes. I saw the stuff on the net book value and the net income. Is that what you're relating to or referring to? Yeah. Subsequent events note in financial statements. Yeah. There you go. Thanks, Yuliya. Yuliya wrote that note. It was poetry. Yes. Beautiful. Good to see that you guys are able to keep that track record of no write-downs in tax. That's positive. Is there any other businesses that you're looking at today in the context of where the market stands and the basins that you're in that, you know, maybe aren't or are similar to what you're seeing in the Well Servicing business, where you're just like, you know, the returns on this investment aren't keeping pace with what we see in the opportunity pipeline? No, I would say we're pretty comfortable with our existing businesses. What I would say is we're constantly culling old equipment. You saw it with our Canadian drilling and Canadian Well Servicing with the decommissionings. Again, we took no impairments or write-downs in respect to that as the carrying values are approximate the salvage value, which is literally scrap metal. We will cull the herd as we go through things. No, I would say we're interested in continuing to grow the rest of our business lines. Okay. In the country we're in. Perfect. Can you tell me a little bit about the first rig that you have deployed? I think it was a CNQ, it's like from public disclosures, the AC triple conversion. Can you just say, you know, how is that comparing in the market to, I guess incumbent AC triples in terms of day rates and what's the customer experience been like? What's the contract status on that rig? I'm not gonna comment on rates simply because I don't know what our competitors charge. They won't tell me. If you find out, I'm not sure I'll tell you. You know, that's between us and our customer. What I would say, the rig operationally has been exceptional. It moved in November, drilled a Montney well or two, I'm not sure if it's one or two. At the customer's request, it moved into the oil sands drilling, I would say a very high profile wells there. It has shown remarkable range of capability. And literally the thing, you know, moved up to Grande Prairie from Nisku Edmonton area, you know, moved and rigged up, and it was incredible. I forget the exact amount of time, but operationally it's performed exceptionally well. Is the customer happy? I haven't had any bad phone calls or anyone screaming at me, so that's a good sign. My sense after talking to our people is there would be strong demand for more of that style of rig. Our board agreed and we approved a second one. Did you get any learnings from the first one in terms of, I guess, construction and get any efficiencies on the cost of the second one? I would say our people did a remarkable job. Honestly, there's always things you learn, but what it did do was confirm the design and you know, I kind of look at it and I've called it the Nomad of the triple rig market. You know, our compression group years ago developed a Nomad, which basically was revolutionary insofar as it put relatively high horsepower on a trailer, and that had not been able to be done before. You know, the way I look at this style of rig is it gives us the capacity, hook load, racking capacity of you know, all but the, I'd call it super ultra heavy triples, but it moves like a double. I call it the Nomad of the triple drilling fleet. It really, what the last four months has done is firm that up, that the design works. There's no fundamental flaws with the design. You know, again, you wanna do one first to make sure that's the case because you never know. I would say real life has confirmed what we thought it could do theoretically. That's great. I guess in Canada, how many rigs do you think you might be able to upgrade to that capacity? Is there any opportunity, I mean, some underutilized fleet in Canada and probably underscaled in the U.S.? Like, could you upgrade some doubles to these rigs to AC triples in this format and have a market in the U.S. as well? You know, I think our focus right now is Canada. Largely we have a special rig in the U.S., 802, which again is patented. It was developed by Savanna. It's truly a craneless rig. Its hook load is not quite the same as the one up here. It's a bit lighter. What we find in the U.S., there's a reluctance to take advantage of the true mobility of these triples. In other words, they bring cranes out no matter what. I think until we get a more, how would you say, adventurous customer utilizing those, you don't see the same value, proposition in the U.S. as you do Canada, where for whatever reason, we find our Canadian customers more interested in the novelty of being able to move a triple without cranes. I think part of that could be there's just such a concentration of triple rigs in West Texas that you got trucks all over. It's not a big deal versus when you're in the middle of the bush in Canada. It's much more of a compelling proposition to be able to really move these things without cranes. I think our focus right now is to continue to prove up and build the market in Canada. We've got several of the style of mechanical double idle rigs that will suit the purpose here. We're not gonna disclose exactly how many, but we have filed for patent protection on this as well. We're closely watching to make sure no one's violating our rights there. Okay. Appreciate that. Switching gears, I mean, what, four quarters in a row of record backlog in CPS. Can you talk about what you're seeing on the leading edge for demand, and the kind of bookings as we look into 2026? How are you thinking about adding shifts in the Calgary facility in 2026 ahead of the Weirton expansion? I would say demand remains very strong. As our backlog grows, our deliverability goes out. We're less competitive on delivery times, and I think you will start to see that impact our ability to win orders later on. This, that's a company-specific thing. Again, you know, it's easier on paper to say add 50 people. You know, in Canada, if you're trying to ramp up materially, you start running into huge quality control issues, things like that. We've always been pretty measured in what we'll do. The other elephant in the room is delivery times on major components, notably Caterpillar engines. You know, we're out now on 3600 series engines to 115 weeks delivery. You know, what we've done over the last year is really methodically managed that quite well, and I give our group a lot of credit there. You're effectively, you know, having to make a call on what business looks like two years from now. I can tell you, A, you need a balance sheet to play in this game, and two, you know, for a startup to start today, you couldn't. You know, what are you gonna build? You got no inventory. Part of our production capacity will be limited by inputs. You know, that said, we've made sizable investments and continue to do that to ensure a pipeline of major components, including Caterpillar engines. Got it. Your backlog today, what's the duration of that backlog? Is it extending well into 2027 and perhaps even 2028 at this point? You know, what we had commented is provides us visibility going into 2027. Again, I would say our group there is pretty sophisticated. The sales group is very sophisticated. You know, you look to keep level production levels. That's when your efficiencies are greatest, when you've got experienced, you know, production employees working at steady pace. Part of what we do is pivot based on floor availability to other whether it's other drivers, walk a shop, electric. The good thing is we play in all those business lines. You know, we're seeing our backlog at year-end gives us visibility into 2027. I would say it's a pretty dynamic perspective in the sense that there's a lot of things moving below the surface. Again, you know, how do you allocate a scarce resource, i.e., floor space, price? You know, you always maintain some flexibility to accelerate projects, you know, based on willingness to pay. Conversely, you know, if people or customers are flexible, they can probably get a bit more of a deal by giving us that flexibility where we can, you know, manage their projects around our needs on the floor. I would say it's dynamic, but being well managed by our group there. Okay. A lot of moving parts. Yeah, I know the market is crazy in terms of what you have to do to keep pace with it in terms of those lead times. I guess for Total specifically with the Weirton facility expansion in early 2027, do you have inventory or I guess orders in place to facilitate the growth and expansion of that facility when it comes online? Yes. Obviously, you know, when we made the decision to expand last year, part of your expansion is planning your inputs. You know, you don't wanna open a shop, and you got no components. You know, both in terms of majors and employees, and there'll be a gradual ramp up, but certainly we factored that additional capacity into our inventory purchase decisions beginning last year. Like I said, thank God we did because it's gone, we're up to 115 weeks now. Mm-hmm. Okay. That's helpful. It requires a lot of capital. Yeah. Well, good thing you have a good balance sheet. Are you seeing anything on the power generation side around data centers? I know that's not a major thing that you've highlighted, but I believe you guys do some packaging and power generation through Vital. Is Is that correct or wrong? Yep. No, we're in that market. We see good demand. Honestly, power generation is easier to build than gas compression, to be blunt. Our niche has been on, I'd call it the industrial power generation. We're not per se chasing big data centers. Really power generation. Where we seem to be having good traction is more on industrial, particularly oil and gas locations where, you know, for example, a customer wants to power a gas plant, you know, electrically, but with natural gas sourced electricity. That's where we're building into. Could that be a data center? For sure. No reason why it couldn't be. We're not in lines, and we have no intention of getting into turbines. That I would call the ultra-large projects. You know, we can build as large a reciprocating engine power generators, anyone. Really it's just one more item on our menu. From a technical perspective, it's easy for us to build. We build way more complex things and so far the quality of what we produce is very good from what I understand. You know, we're selling that and we're in that market. It's part of the backlog. It's just one more thing that keeps our welders busy. Got it. Are you in any major RFPs for like data centers? I wouldn't comment on that. I wouldn't comment on what we're tendering on. It's just, it's competitive. Okay. We're not in turbine stuff though, so anything that's turbine, we have no interest in that. Yeah, fair enough. In Australia, things are going pretty well for you. Interesting to see you're upgrading a rig that's already working. Do you have any rigs that aren't working that are, you know, being contemplated upgrading? Why go for a rig that's already working to upgrade? Yeah. This rig is a major upgrade. A lot of the work is being done now. Basically we'll be swapping out the centerpiece. It's a major hook load upgrade, some other upgrades, which is why, you know, it's roughly two months to swap it out, but we're just gonna be swapping in the field. It'll be recontracted with the same customer, but, you know, the existing contract was coming up. You know, on the drilling rig side, we're getting down to, you know, maybe one or two more. The service rig side, we're chewing through that. Yeah, you know, let me put it this way, we have existing inventory and we're open to new builds to the extent necessary to support our customers where, you know, it works for us as well. You know, we do have, for example, a new build service rig coming in service Q1 next year. You know, that's being built in Canada. You know, for the right circumstances, the right customer, we will build new. Yeah, no, we've invested a lot of capital there, Tim, in the last two years and we're starting to, you know, get the benefit of that. If we weren't, I'd have been disappointed because we've invested a lot. Yes. That should continue. You know, it should continue to proceed in the positive direction there. again, that's reflective of, you know, the capital commitment we've made to grow the business there. Okay. Can you just tell me how many drilling rigs you have running in Australia right now? That rig, I guess, is being upgraded currently. When do you expect it to come back into the fleet? The one that's being upgraded is actually operating. We're swapping out the centerpiece, so you don't have to take the rig down. Right now, a lot of the rigs, quite honestly, are down for rain. We're in the middle of the rainy season. The last week has been extremely wet. Thankfully, it looks like it's starting to dry up a bit and we'll get a few rigs moving again. Most of our fleet is on standby with crews as we speak. Just heavy rains. That's Q1 is their breakup. That's pretty normal. Just to be clear, the Australian drilling rig upgrade, we're doing the centerpiece as we speak, which is not the centerpiece that's on the rig that's being upgraded. That rig can continue to operate. It will be taken out of service for about two months when we take the existing centerpiece out, put the new one in. Got it. Will that happen in- That'll be midyear this year. A lot of it depends on when they kinda wrap up their drilling program. Yeah, it'll be roughly two months midyear. I guess, can you talk a little bit about the extent of activity impact or I guess, revenue impact or anything like that, just given the weather in Australia in Q1? No, there's nothing abnormal. It's a normal Q1 in Australia. Got it. All right. Well, appreciate all the detailed answers. Appreciate that. No problem. Thanks. That concludes our question and answer session. I would now like to turn the conference back over to Daniel Halyk for closing comments. Well, thank you everyone for joining us, and have a good rest of your week and look forward to speaking with you after the release of our Q1 results. Have a good day. Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.