Ladies and gentlemen, thank you for standing by, and welcome to the Precision Drilling Corporation 2020 fourth quarter end of year results conference call and webcast. At this time, all participants are in listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star then one on your telephone. Please be advised that today's conference is being recorded. If you require additional assistance, please press star then zero to reach an operator. I'll now hand the call over to Dustin Honing, Manager, Investor Relations and Corporate Development. Please go ahead. Thank you, Michelle, and good afternoon, everyone. Welcome to Precision Drilling's fourth quarter and year-end 2020 earnings conference call and webcast. Participating today on the call with me are Kevin Neveu, President and Chief Executive Officer, and Carey Ford, Senior Vice President and Chief Financial Officer. Through our news release earlier today, Precision reported its fourth quarter and year-end 2020 results. Please note that these financial figures are in Canadian dollars unless otherwise indicated. Some of our comments today will refer to non-IFRS financial measures such as EBITDA and operating earnings. Please see our news release for additional disclosure on these financial measures. Our comments today will include forward-looking statements regarding Precision's future results and prospects. We caution you that these forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from our expectations. Please see our news release and other regulatory filings for more information on forward-looking statements and these risk factors. Carey will begin today's call by discussing our fourth quarter and year-end financial results. Kevin will then follow by providing an operational update and outlook. With that, I'll turn it over to you, Carey. Thank you, Dustin. Precision Drilling exceeded the financial targets set out at the beginning of 2020, leveraging our scale to generate CAD 263 million in adjusted EBITDA, growing our cash balance by CAD 34 million and reducing debt by CAD 171 million, despite experiencing year-over-year North American activity declines of over 44%. Precision Drilling's ability to achieve these results was a function of strict cost control and cash management as well as excellent field performance. Our cost reduction initiatives activated in the second quarter were necessary given the anticipated steep activity drop in 2020. We successfully reduced fixed costs by over 35% and SG&A by over CAD 30 million, which positioned the company to generate strong financial results through the fourth quarter of this year and established a cost structure we believe is sustainable in an increasing activity environment. Cost control, cash management, and debt reduction will continue to be focus areas for the company in 2021. Moving on to our fourth quarter results. Our fourth quarter adjusted EBITDA was CAD 55 million, a decrease of 47% from the fourth quarter in 2019. The decrease in adjusted EBITDA primarily results from a sharp decrease in drilling activity in North America and a slight activity decrease in our international operations. Also included in adjusted EBITDA during the quarter is CAD 10 million of CEWS assistance payments and CAD 11 million of share-based compensation expense. Absent these items, EBITDA would have been CAD 56 million for the quarter. As a reminder, the CEWS program supports employment in Canada, and Precision has utilized this program to preserve jobs within our organization. We applaud the Canadian government for this program and its impact on supporting employment during the pandemic. Although the program is extended well into 2021, it is likely participation levels will decrease for Precision in 2021, with the expected financial impact to be approximately half that in 2020. In the U.S., drilling activity for Precision averaged 26 rigs in Q4, an increase of five rigs from Q3. Daily operating margins in the quarter were $11,158, a decrease of $1,139 from Q3. The decrease in margins is due to lower IBC revenue earned in Q4, slightly offset by higher turnkey margins earned in Q4. Absent impacts from IBC and turnkey, daily operating margins would have been $716 higher than Q3, which reflects the impact of exceptional operational cost control during the quarter. For Q1, we expect normalized margins absent IBC and turnkey to be down slightly from Q4 levels. We expect to average one rig on IBC during the first quarter. In Canada, drilling activity for Precision averaged 28 rigs, a decrease of 15 rigs from Q4 2019. Daily operating margins in the quarter were CAD 9,379, an increase of CAD 1,988 from Q4 2019. Margins were supported by a strict focus on operating cost, CEWS assistance, and shortfall payments. Absent the CEWS and shortfall impact, margins would have been CAD 6,895 or CAD 496 lower than Q4 last year, with cost control efforts nearly offsetting the overhead burden from lower activity. For Q1, we expect margins absent of CEWS to be relatively in line with last year. Internationally, drilling activity for Precision in the current quarter averaged six rigs. International average day rates were $55,453, up approximately $3,170 from the prior year, benefiting from active rig mix. In our C&P segment, adjusted EBITDA this quarter was CAD 5.3 million, down 15.4% compared to the prior year quarter. Adjusted EBITDA was negatively impacted by a 32% decline in well service hours, reflecting lower industry activity in the quarter. We expect results will improve in Q1 due to increased industry activity and additional work supported by the Canadian government's CAD 1.7 billion wellsite abandonment and rehabilitation program. Capital expenditures for the quarter were CAD 23 million and CAD 62 million for the year. Our capital expenditures were higher than forecast due to higher than expected activity in the fourth quarter, anticipated higher activity to start 2021, four contracted upgrades completed in the fourth quarter, and discounted year-end purchasing of upgrade components ahead of increase in activity in 2021. Regarding the upgraded rigs completed in the fourth quarter, two related to U.S. operations and two were for the Canadian market. All four of the upgrades were heavily supported by Precision teams at our Nisku Tech Center and Rosedale operations. Our 2021 capital plan is CAD 54 million and is comprised of CAD 38 million for sustaining and infrastructure and CAD 16 million for upgrade and expansion, which relates to anticipated investments supporting Alpha Technologies and contracted customer upgrades. As of February 10th, we had an average of 33 contracts in hand for the first quarter and an average of 28 contracts for the full year 2021. Moving to the balance sheet, we continue to reduce both absolute and net debt levels, primarily through free cash flow generation. As of December 31st, our long-term debt position net of cash was approximately CAD 1.14 billion, and our total liquidity position was over CAD 700 million when excluding letters of credit. Our net debt to trailing 12-month EBITDA ratio is approximately 4.3x, and the average cost of debt for Precision is 6.5%. We remain in compliance with all our credit facility covenants in the fourth quarter, with an EBITDA interest coverage ratio of 2.7x. During the quarter, we utilized CAD 6 million to repurchase shares. Our capital allocation program remains substantially weighted to debt reduction. For 2021, we expect to continue generating free cash flow through operations and do not expect incremental benefit from working capital release as activity is increasing in both the U.S. and Canada. Concurrent with the activity increase in the fourth quarter, we reported a CAD 24 million increase in working capital from the end of Q3. Liquidity remains a top priority, and we will continue to look for opportunities to reduce leverage and have set our debt reduction targets for 2021 to CAD 100 million-CAD 125 million. We remain on track to meet our recently increased longer-term debt reduction goal of CAD 800 million between 2018 and 2022. For 2021, we expect depreciation to be approximately CAD 290 million. We expect SG&A to be CAD 55 million before share-based compensation expense. We expect cash interest expense to be approximately CAD 85 million for the year, and we expect cash taxes to remain low and our effective tax rate to be in the 5%-10% range. That concludes my remarks, and I will now turn the call over to Kevin. Good afternoon, and thank you, Carey. All right. 2020 was a deeply challenging year, but it was one where Precision demonstrated the resilience and agility of our business model and the resourcefulness of our highly skilled people. Now, you may recall that on our conference call last February, we foreshadowed the potential risks from the emerging pandemic. Within a few weeks, the Precision team pivoted to a full risk mitigation mode, immediately executing our pandemic safety response plan and then addressing spending. Despite the resulting downturn, we successfully achieved or exceeded all of our pre-pandemic strategic priorities. We improved our capital structure, exceeded our debt reduction targets, we restructured our fixed cost and expense base, and we firmly positioned the company for the industry recovery, which is now underway, all while managing the health and operational risks caused by the COVID-19 virus. I think Precision's fourth quarter financial and operational results, they are the fruits of that hard work. During the fourth quarter, we increased our U.S. activity 60% over the third quarter bottom, and our U.S. activity currently sits at 33 rigs. Canadian activity today sits at 54 rigs, up from Q2 lows of just eight rigs and doubling our Q4 average of 28 rigs. The drastic steps our team implemented during the second quarter of 2020 to reduce costs and expenses are sustainable and will ensure strong cash flow torque as the business continues to recover. Our resilient margins during the fourth quarter are a good indication of Precision's earning torque capability. As we reported in our press release, we continue to make strong progress on our Alpha digital strategy. Market penetration of AlphaAutomation almost doubled in 2020 to 41% of wells drilled, up from 23% the prior year. Customer utilization time now exceeds 95% for AlphaAutomation, the system uptime while in use is the 99.6%-100% range, exceeding even our highest mechanical uptime expectations for this product. Precision's Alpha App Store now has 18 active apps, we recorded 2,300 app days in 2020. During the fourth quarter, we initiated field hardening trials for our sliding app, successfully executing some 30 slides. Sliding is a very important app as it will significantly reduce rig manning by eliminating the directional driller. We expect this app will become commercial by mid-year. AlphaAnalytics was also introduced to our customers in early 2020 in trial mode. We transitioned to a commercial model mid-year. In the second half, we built 800 revenue days with AlphaAnalytics. There's no doubt that we'll increase market penetration for all Alpha digital services, and we believe these digital capabilities significantly strengthen our competitive positioning. Looking forward, we see an improving macro environment with strengthening industry fundamentals, and we can also report that customer sentiment has also substantially improved. Hydrocarbon extraction is a capital-intensive industry, and constructive access to the capital markets is essential. The recent successful debt and equity offerings by our customer base are indicative of the capital markets beginning to recognize the capital discipline the industry is demonstrating. We believe this is a very important leading indicator of the industry's recovery. We also expect global oil demand will continue its recovery as the COVID-19 vaccines are distributed and the pandemic restrictions begin to ease later this year. In the U.S., the improved natural gas prices are driving increased &P gas-directed interest. Precision's rig mix has shifted to 50% gas, 50% oil, as several of our recent rig activations have been for gas-directed drilling. I am pleased with our market position in U.S. gas basins, with a strong presence in both the Marcellus and Haynesville gas plays. I also note that these customers have been technology first movers, adopting Alpha technologies and experiencing the efficiencies we promise. Oil-directed Permian activity has also rebounded from 2020 lows. However, the regional excess supply of idle high-spec rigs has led to some creative pricing strategies. At Precision, we remain highly disciplined and will continue to look for the best return opportunities to reactivate our idle rigs. We believe our Alpha technologies are an important catalyst for our marketing strategy at the Permian. Now, Carey mentioned several rigs we upgraded during the fourth quarter. I'll elaborate on the two U.S. upgrades. The two U.S. rigs are Precision ST-1200 pad walking Super Triple rigs. The DJ Basin operator wanted to reduce their environmental footprint and reduce the time on location with the drilling operations to minimize the community impact. We proposed a solution to reduce the rig footprint and squeeze two rigs on one pad to drill simultaneously. Now, this was a major rig configuration upgrade. We vertically stacked the rig utility modules to reduce the rig footprint by about 20%. Both upgraded rigs were spotted on location earlier this month, and we are delivering on all the customers' expectations. This is a big win for our customer and a very good outcome for Precision, but we think this is an excellent example of how Precision can be an integral part of our customer's ESG strategy. I'll have more on this when I discuss our 2021 priorities. Currently, we have line of sight for additional U.S. rig activations later this quarter and into the second quarter. We expect our activity to increase by 15%-20% by mid-year. Of course, presuming we don't expect another external macro disruption. Now, there's been much talk of performance-based contracts displacing the day rate model. While some of our contracts are performance-based, we remain very cautious on this contracting arrangement. We continue to have very good success pricing our Alpha digital technology offerings as a la carte additions to the base day rate. While the rig day rate may be exposed to market competition, the Alpha services are not. We are seeing new customers and market share gains due to the efficiency and data analytics that Alpha enables. We'll continue to pursue both contracting alternatives, but in any event, we believe that demonstrated drilling efficiency, well bore placement accuracy, and rig safety will win the day with our customers. In Canada, the market has largely stabilized and is beginning to improve. Q2 customer demand looks to be almost double what we experienced in 2020. While visibility in the second half of the year remains less clear, we expect that firm natural gas pricing and stronger WCS prices will drive activity meaningfully higher on a year-over-year basis. Our market position in the Montney with our Super Triple rigs and AlphaAutomation remains strong. We expect firm Montney activity through spring into the second half of the year. Heavy oil is also rebounding from recent lows, reflected in our improved heavy oil activity this winter drilling season. With firm WCS pricing, we expect this trend will continue through the year. We are well-positioned with our Super Single rigs as the rig of choice for heavy oil drilling. While price competition remains intense in the shallower conventional oil plays, such as the Cardium, Viking, and southeast Saskatchewan, firming customer demand should help stabilize those prices later in the year. In our international segment, we continue to manage the complicated logistics caused by the pandemic travel restrictions and quarantine requirements for our rotating crews. Our financial performance remains strong and consistent. We are getting some indications that rig renewals and activations we're waiting for in Kuwait may start to get some attention. As yet, we have no clear indication of timing. Currently, we have three rigs running another contract for the full year in Kuwait. In Saudi Arabia, Aramco is now beginning to reactivate some of the rigs they put on standby last year. We think they'll work through those IBC rigs before any new rig activations are possible. This is certainly a positive trend, but again, the timing on additional opportunities is uncertain at this point. Currently, we have three rigs operating in Saudi Arabia under contract for the full year. Our Canadian well service segment is experiencing an increase in demand, driven in part by the Canadian well abandonment program, but also a broad-based increase in customer demand. We believe there's been a multi-year lag in well service work, and now with improved commodity prices, this is an area that's getting operator attention. Again, barring a macro dislocation, our 2021 well service activity for Precision will be substantially improved over 2020. We believe this business has good earnings or good cash flow torque following the restructuring efforts we've undertaken over the past couple of years. Turning to our 2021 priorities, I think our continued management focus on free cash flow debt reduction and the market penetration for Alpha Technology will be no surprise to those who follow Precision. Our newest priority to strengthen our customer and stakeholder positioning through ESG performance is a critical priority as the world recovers from the pandemic and we all look into the future. As you may have read in our 2020 sustainability report, Precision has a mature and well-developed ESG culture supported by internal processes, controls, and systems. We believe we can help our customers, our investors, and other stakeholders better recognize the performance we deliver and how we'll continue to evolve our ESG strategy going forward. My example earlier regarding the reduced footprint compact rig to supplement our customers' environmental strategy is one way we can help our customers as they strive to lower their emissions, reduce their environmental footprint, and improve their ESG scores. Precision's high-performance service offerings, which deliver better drilling efficiency, also deliver reduced GHG emissions, such as our Alpha digital technologies, our pad walking systems, our natural gas fuel systems, and our hybrid battery power systems. In 2021, we will put these GHG initiatives and others still in the planning stage to the forefront of our strategy. We'll also quantify our full range of ESG initiatives and performance for all of our stakeholders. I'll conclude my comments by thanking all the employees of Precision for their very hard work in contributing to Precision's strong results in a deeply challenging environment. I certainly appreciated the added workload and the pandemic stress every employee feels. I especially want to commend our rig crews who have managed the pandemic risk excellently and delivered our all-time best field safety performance. Thank you very much, and I'll now turn the call back to the operator for questions. As a reminder, to ask a question, please press star then one. If your question has been answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Taylor Zurcher with Tudor, Pickering, Holt. Your line is open. Hey, good afternoon, and thank you. Kevin, you talked about 15%-20% improvement in the U.S. rig count by hopefully sometime around mid-year. Off the top of my head, it looks like 5-7 additional rigs. Can you talk about what sort of operator groups, whether it be private or public, if there's any trend behind the operators for those potential incremental rigs and industry-wide as we look at the next leg of growth from here? Do you expect it to be driven mostly from the private side of the equation or fairly balanced between private and public? Taylor, great question. Certainly what we've seen so far has been weighted towards the private equity E&P companies adding rigs with a blend of some publics. I think looking forward into how things sort of play out over 2021, I'm really encouraged by the strong discipline our public customers are showing around capital discipline. I'm encouraged that the markets seem to be recognizing that. I do think that the commodity price range we're in right now, both for gas and oil, is higher than anyone anticipated, either in their budgeting process or even in their bank redeterminations. I think the outlook's improving, and I do think looking forward, the mix of new rigs will be more of a blend of publics and privates, less weighted to the privates. Understood. Okay, my follow-up's also in the U.S. As of the last quarterly earnings release, you had about seven term contracts for 2021. Now you've got 16. It's a nice improvement there. I suspect on a leading-edge basis, the spot market pricing is much lower than certainly what it was a year ago. Just curious if you could help us understand how you're thinking about your contract book and pricing in this sort of environment and the willingness to add some longer-term contracts at whatever lower pricing you're able to get today. Hey, Taylor. First of all, a component of our contracts that we've announced are renewals of rigs that are already running and in play. Those are customers that have the rigs, they're on location. There's no mob or demob cost. In fact, those rates tend to be closer to prior years' rates. Okay. New activations will certainly be a little bit more affected by spot market rates and a bit lower. I'd say that we think rates have bottomed. We think that there is sort of a concerted effort to start to move rates upwards. We expect that'll play itself out nicely in Q1 and Q2. I'll squeeze one more in. I found the comments about the four upgraded rigs pretty interesting, particularly the two in the U.S. reducing the environmental footprint a bit. Can you talk to whether or not you're able to get paid for those upgrades? I mean, are you getting term and some sort of decent pricing for those rigs above and beyond what you can get on a leading-edge basis in the market to go ahead and do those upgrades? Absolutely. We are being paid for the upgrades. The return on the investment is very good and fits our long-term return expectations. Great. That's it for me. Thanks, guys. Yeah. In fact, Taylor, I'll just elaborate. We didn't expect those upgrades. I wouldn't say a surprise, but we were surprised that our customers were willing to pay for upgrades. I think it helps you understand that the market's evolving. Our next question comes from Connor Lynagh with Morgan Stanley. Your line is open. Yeah, thanks. Just wanted to build on the conversations around contracting and pricing dynamics. I appreciate you don't want to go too into detail on rates for competitive reasons. I guess what I'm wondering is, are you guys seeking to push rate more so or term more so in your negotiations? To what extent are customers willing to sign long-term contracts or willing to give incremental rate versus quote unquote spot that was sort of obviously pretty hampered by weak demand? Just your thoughts around that would be great. Yeah. Connor, again, I think these are really key questions and ones everybody would like to get some really good clarity on. There's always a balance. Certainly when the market's beginning to recover, early in the recovery, customers that have long-term plans will look to try and lock in the best rigs at the lowest rates they can for the longest period they can. We've had customers asking for contracts in the range of anywhere from six months to 18 months, trying to lock in the lowest rate. Certainly, we don't want to have a large volume of super spec rigs locked up for the next 18 months at leading edge rates, we'll balance that out. We might take a couple, we'd look to leave optionality as rates are to improve, we can continue to capture those rates as they rise. I can tell you our marketing team has a very sophisticated spreadsheet they use to manage this, which you can't have a copy of. We'll see. Maybe if I ask nicely. I guess the other dynamic is cost. Cost was something that, obviously as you're reactivating rigs and getting things back into the field, I imagine that weighs on margin somewhat. I guess the offset is contracted rigs. Can you help us think through the next couple of quarters here, how we should think about the, and I'm particularly thinking in the U.S., obviously Canada's a bit more complex with breakup, but how should we think about your cost per day or that impact on margin? Connor, broadly, I think the rigs that we've stacked so far have been stacked in pretty good shape, and we have de minimis reactivation costs, so nothing we're guiding towards. I'll just let Carey kind of reiterate his views on our cost guidance. Yeah. Hey, Connor. I'll point out my comments in the introduction that our efforts to reduce operating costs have largely offset the increased overhead burden by lower activity levels. That's been a really good development from a cost standpoint. As we add the next handful of rigs, we don't expect to have a whole lot of reactivation costs. It wasn't too long ago we had 80 rigs running in the U.S. I say not too long ago, about a year and a half ago. A lot of those rigs are in really good condition to go back to work. It's not going to be an overly burdensome reactivation cost. As we get deeper into the pool, you may see a bit more cost to reactivate the rigs. Okay, just to square it here, the trend in cost per day would probably be flattish from here, or do you think fixed cost absorption helps? How should we think about that for the duration of the year? I think for the next couple of quarters with the activity forecast that Kevin provided, we should have relatively flat cost per day absent variations in turnkey, if we're talking about the U.S. market. Right. All right. Thank you. Our next question comes from Keith Mackey with RBC. Your line is open. Hi, thanks for taking my question. Just a question on the CapEx number, the CAD 54 million. Should we assume that that is a gross number, or is that going to be net of some kind of dispositions as well? That is a gross number, Keith. Got it. Okay. Just on the recontracting, and in particular any rigs you've had to add back to the field, just maybe if you can comment on staffing those rigs. Have you been able to recontract the same crews, or is there new people that you're going to be dealing with in the mix? Keith, good question. Typically, we're always trying to bring in some new people. We've been quite successful restaffing in Canada and the U.S., pulling back prior Precision hands we let go during the downturn. We still like to seed in some new green hands so we continue to build our base of staff. We've been doing some of that, but we've had no trouble staffing up rigs in Canada or the U.S. in this early stage of the rebound. Now, let me just turn to well servicing for a moment, which is a little different story. In well servicing, we find we're competing with some of the unemployment subsidy programs that are underway in Canada right now as part of the pandemic relief. The challenge in well servicing is if the workers call out work, it might be three, four, or five days work, and then they're home for two days and then back at work for three or four days. Whereas in drilling, we can guarantee months and months of work, typically six months or a year's worth of work. We don't have that personal problem, but in well servicing, labor has gotten very tight, and I think the well servicing sector, I know ourselves included, are kind of reaching limits of what we can do for recruiting. We're having to become very creative on recruiting and looking at referral programs and things like that to start getting the base of employees up in well servicing. Got it. Okay. Thanks for that. Primarily a Canadian problem for us. Got it. Okay. Thanks for the color. I'll turn it back. Again, to ask a question, please press star then one. Our next question comes from Cole Pereira of Stifel. Your line is open. Afternoon, everyone. As we think about the U.S. opportunity set, should we be thinking of it as continuing to be split between oil and gas basins, or how do you expect that evolves? It depends on what we get next. I'm not sure what the next award will be. We have a pretty good line of sight to several. Cole, my expectation is to see a little more weighting towards oil going forward. Okay. That's helpful. Thanks. Over the past few quarters, you guys have been able to divest some non-core assets for call it proceeds of a couple of million, et cetera. Is there any line of sight that should continue into 2021 to help offset some of that CapEx program? Hi, Cole. We typically will sell drill pipe when we use it beyond the time standards that we've established, and we're able to sell that into a secondary market. That's typically anywhere between CAD 5 million and CAD 15 million a year. Then we'll look to sell other kind of older assets that don't have much of a use within the Precision organization anymore. I think absent larger idle rig sales or non-core divisions, think about divestitures in the kind of CAD 10 million-CAD 20 million range. Okay. Got it. That's helpful. Talking about some of the ESG strategy. Your ESG report had some pretty good disclosures on your bi-fuel and gas-powered rig fleets. Can you just comment on the level of utilization you're seeing for this equipment specifically, and if you've seen a notable change in the volume of E&Ps requesting this equipment? Cole, I think right now the rigs we have that are not being utilized, that either have bi-fuel or natural gas engines, are probably just in the wrong physical location. We may have demand for bi-fuel in the Montney, but the rig might be sitting in North Dakota, say. I would tell you, almost every E&P conversation now includes a short discussion on the potential to lower GHG emissions. Okay, got it. As we think about those conversations, has it gotten to the point, I guess, very commonly where E&Ps are willing to actually pay for, call it, bi-fuel or other opportunities, or is it kind of just here and there at this point? I would say that our E&Ps have been paying for bi-fuel, and paying for upgrades to bi-fuel. We'll continue that discipline. I don't see a capital upgrade to a rig being a non-revenue opportunity for us. Okay, got it. That's helpful. I'll turn it back. Thanks. Great. Thanks, Cole. Our next question comes from Aaron MacNeil with TD Securities. Your line is open. Hey, everyone. In the context of the three strategic priorities on technology, debt reduction, and ESG, are there any specific targets that you're looking to hit this year, and how should we benchmark you against those priorities as the year progresses? I think the one clear target that Carey outlined in his comments was the debt reduction target of a range of CAD 100 million-CAD 125 million for 2021. You can benchmark us against that all year. As the year evolves, we'll disclose the steps we're taking in each of the other priorities and continue to update on those. Obviously, on technology market penetration, that's clearly what we're looking for there. I'll be disclosing on market penetration. ESG initiatives that we believe either are important to our investors or important to our customers, we'll disclose successes on those. Got it. Could you maybe give us a sense, aside from bi-fuel and some of the other examples you've given, on what kind of initiatives on the ESG front you might be looking at to help your customers? I didn't mention in my narrative high line power on the rigs. We've got right now several projects that are high line powered, and our customers are looking at also then securing their power contracts on renewable power contracts. That would be, for a customer, a possibility to have almost a zero-emissions rig. Okay. Makes sense. Switching gears, you obviously mentioned the U.S. activity should increase 15%-20% by mid-year in the U.S. Do you think that in order to facilitate that, we're going to have to start to see announcements from E&Ps increasing their capital budgets in the first half of the year? Well, I don't think so, because I think if you think about it, in our case, that would be a handful of rigs, five or six rigs. I don't think that necessarily warrants a capital announcement for an increase. Aaron, I don't expect any E&P to lead with their chin on increasing capital spending. That's kind of what I was getting at. Yeah, I think what will happen, though, is I think that receipts at CAD 58 are a lot better than receipts were going to be at CAD 48. As they demonstrate strong free cash flow, as they demonstrate sustained or improved dividends or share buybacks or debt reduction, I think they'll start to earmark additional capital to replace their inventory of wells as they start to work through their DUCs, which is happening right now. Okay, great. That's all for me. Thanks, everyone. No question, I expect it to be an all of the above answer for our customers. They're not going to sacrifice investor returns to add rigs, but if they can continue to show strong investor returns and add rigs to the margin, they'll do both. Perfect. Thanks. That's helpful. I'll leave it there. Thank you. Our next question comes from Blake Gendron with Wolfe Research. Your line is open. Yeah. Thanks. Good afternoon. Your peer this morning talked through some of the math in the U.S. in terms of Super Spec utilization and maybe some of the mechanisms to start getting pricing. Part of that was the stacking of older rigs and potentially the retirement of those older rigs, theoretically tier 2, maybe SCR rigs. I'm just wondering what the mechanism for that would be. Would contractors basically just sell them for scrap? The reason why I ask is, I'm just wondering the extent to which you think pricing could maybe materialize middle of this year to back half this year, considering that rigs never really have gone away in the past and the spread between tier 1 and tier 2 hasn't really expanded all too much outside of maybe rapidly increasing activity levels. Just wondering how you think about scrapping versus super spec utilization and maybe the outlook for pricing. Thanks. Yeah. I didn't hear the comments. I don't know exactly what might've been said, we really haven't seen DC SCR rigs dragging on the price that we've been able to achieve in the marketplace with our super spec horizontal drilling pad walking rigs. I'm not too worried about watching rigs being retired. I'm really looking closely, though, at contractor by contractor utilization of their super spec pad walking rigs. I think the market is really tight. We've added back 100 rigs off bottom. I think utilization of those super spec rigs is getting into the territory of pricing power. There are some regional dislocations right now. For example, we're doing quite well with our rigs in the DJ Basin because we've got the right size rigs in the right place, and it wouldn't make sense to move a rig from the Permian to the DJ Basin. That mobility friction is helping us out there. I'm not sure if it's a handful of more rigs or maybe 20 more rigs in the Permian get used up, I think that we're going to be at a much tighter market in the Permian. That's helpful. In addition, performance-based contracts, you've been, if I remember correctly, pretty staunchly opposed to some of that commerciality. The peer this morning, I don't know if you've caught the comments, noted some traction on the performance-based contract side. Just wondering if you've come up against it in any tendering activity and, quite frankly, how you think it plays out, either receptivity of the customer base or otherwise. How do you see this commerciality evolving? We do have performance contracts in Precision Drilling right now. We have them in more than one basin, more than one customer in the U.S. We're watching this closely, continuing to bid other performance-based contracts. I'm still remaining a little skeptical on this. I just don't know where it ends up. What I have seen in the past is that once you achieve a new performance shelf or barrier for a sustained period of time, it ends up being a bit of a reset. You could also say the same thing about day rates get reset when supply gets extreme. It's a little hard to say how it's going to play out. We're keeping our avenues open here, and we're certainly not going to miss out on a performance-based contract trend if that continues. I remain a little skeptical on this. I can tell you that we are sustaining our pricing and our technology initiatives with really no competition and certainly no competitive pressures downwards on our technology initiatives. We're quite happy with the à la carte model, day rate for the base rig, à la carte for the add-ons, working quite well for us. That's definitely encouraging. Yeah, I think, Blake, it could go either way here. I think we'll be ready to go either direction. Certainly we have the tools in our analytics and our Alpha technology to deliver strong performance. As I said in my prepared comments, ultimately, those rigs that deliver the best efficiency drilling, the best well bore placement, the best safety, will get the best rates, whatever the pricing model is. Understood. That's encouraging. When you do a bid for a performance-based contract, do the other contractors see the KPIs that you're submitting, and is there any back and forth in that regard? There's a lot of game theory by the operators with KPIs and rates and all aspects. Every negotiable term, you can rest assured the procurement teams apply game theory on. Got it. Thanks for the time. There are no further questions. I'd like to turn the call back over to Dustin Honing for any closing remarks. Great. Thank you everyone for joining today's call, and look forward to speaking to you when we report 2021 first quarter results in April. Operator, you may disconnect. Ladies and gentlemen, this does conclude the conference. You may now disconnect. Everyone, have a great day.