Good morning, all, and thank you for joining us on today's Archer third quarter 2025 trading update call. My name is Drew, and I'll be the operator on the call today. After the prepared remarks, we will have a Q&A session. If you would like to ask a question on the call, please press star, followed by one on your telephone keypad, and to withdraw your question, it's star, followed by two. With that, it's my pleasure to hand over to Dag Skindlo, CEO of Archer, to begin. Please go ahead when you're ready.
Thank you, Drew. Good morning, ladies and gentlemen, and thank you for joining our third quarter trading update presentation. Archer's Chief Financial Officer, Espen Joranger, is joining me on the call today. In today's call, I will cover the key highlights and comment on the acquisition of Premium Oilfield Services, while Espen will thereafter summarize Archer's operations in the third quarter. As we will release our full quarterly financials on November 28, the detailed financials will not be covered in today's call. Toward the end of the call, we will open the line for questions. Moving to slide two. As always, I would like you to know that the information provided in today's presentation includes forward-looking statements as well as non-GAAP financial measures. Forward-looking statements do not guarantee future performance and involve risk and uncertainties. Next slide, please.
Archer is a global company with $1.3 billion of revenue and about 4,500 employees. We are split in four business areas: oil services, platform operation, land drilling, and renewables. First, I want to comment on our growth in reported EBITDA since 2022. Midpoint guidance for 2025 implies an annual growth of 21%. Realized through organic growth as well as accretive M&As. Importantly, we see the growth in cash contribution following our growth in EBITDA and discount cap expand, and we are pleased to see almost a doubling in cash contribution over the same period. This growth is what has enabled us to refinance our debt at a lower interest cost earlier this year. I will not spend much time on the business areas in this call, but I want to highlight that oil services and platform operation represent about three-quarters of our activity.
While most of the activity is in the North Sea, we continue to expand and grow internationally into new areas and service lines. Moving to the next slide. In Q3, we again delivered EBITDA growth. Revenue came in at $339.3 million, up 1% year-over-year, while EBITDA reached $38.4 million, an increase of 10% year-over-year, while adjusted EBITDA grew 11% to $40.2 million. Operationally, we continue to execute well and navigate a somewhat weaker oil service market. In September, as announced, we acquired Premium Oilfield Services, a U.S. oil service provider valued at $20 million in the transaction. This transaction adds complementary client base, additional equipment, as well as clear cost and CapEx synergies. I will come back to this acquisition later in the presentation.
During the second quarter, we distributed a total of $5.5 million to our shareholders, and we are pleased to announce cash distribution totaling $6.1 million in the quarter, maintaining the same NOK-per-share amount as in Q2. Next slide, please. This slide highlights a key strength of our business: our resilient EBITDA performance over time. You can see here our historic EBITDA from 2017 to our guided 2025 estimate. It shows a steady upward trend with moderate dips following major disruptions like COVID in 2020 and 2021. The picture is clear. Our EBITDA is resilient even under volatile market conditions. Why is that? It comes down to our business model and business exposure. It's focused on more stable and resilient business segments. We are largely exposed to platform operations, which are less sensitive to swings in commodity prices.
This large exposure to platform and well-P&A makes Archer somewhat unique in the industry. Platform operations are in mature fields that have been developed, where the infrastructure is in place and the fields are producing. These OpEx-driven services form the backbone of our client activity, securing their cash flow through low-cost barrel production and providing us with a more stable and predictable demand for our services. Obviously, low oil prices and volatility reduce our client spend, also in this segment, but seldom with major impact. Overall, this makes our performance more predictable and less cyclical than many of our peers. The comparison on the right-hand side backs this up. In Q3, our EBITDA grew 10% year-over-year, while the major five oil service companies declined in average by 16%. For the first three quarters, we see the same.
Archer's EBITDA grew by 11% year-over-year, while the oil service majors saw a corresponding decline of 14%. The major oil service companies are to a large extent exposed to exploration and well constructions, segments which more often see a reduction in spend during lower oil price or higher uncertainty. Next slide, please. Slide six confirms our cash contribution or distribution to our shareholders in Q4. We initiated our shareholder return program in Q2, and we are pleased to confirm that during Q4, we distribute the same NOK amount per share as we did in Q3, corresponding to NOK 0.62 per share. The payment date for the distribution is on or around 14th of November.
At the current share price, this level of direct distribution represents a yield of up to 11%, which you can see here on the right, compared with industry peers such as SLB, Weatherford, Halliburton, etc. As this chart shows, our return is well above industry peers, giving us assurance that we will remain an attractive share to hold for our shareholders. Slide seven, please. Let me say a few words about our acquisition of Premium Oilfield Services, which is a strategic move for us and a great addition to Archer's well service business. With this transaction, we are becoming a clear market leader in fishing services in the Gulf of Mexico. Premium is a well-established company focused on fishing and related plug and abandonment services, with operations centered in the Gulf.
They have a solid reputation, a skilled team of around 80 employees, and a long-standing relationship with major operators, many of whom are already Archer clients. The deal also brings significant cost and CapEx synergies, both from operational efficiencies and better utilization of our combined assets. We are targeting about $4 million of annual synergies, of which 75% is already in implementation. Importantly, we required a large, well-maintained portfolio of fishing tools and equipment at a very attractive valuation, well below what I would call the cost replaced today. This gives us immediate operational capacity or leverage without additional capital investments. As you can see from the graph, the deep-water P&A market in the Gulf of Mexico is set to triple in size over the next 15 years. Archer and Premium clients together account for more than 80% of the $15 billion decom and P&A commitments.
Fishing and related steel removal services is a core capability in P&A. This puts us up as a main contributor to this large program, upcoming programs. All in all, this is a disciplined and strategic acquisition, one that enhances profitability, broadens our capabilities, and reinforces our position as a trusted service provider in the region. Moving to slide eight. The Premium acquisition checks all the boxes. It's accretive, strategic, and strengthens Archer's earning and cash flow. It reinforces our ability to return more value to shareholders while continuing to build a stronger, more resilient company. On a pro forma basis for next year, that decision will lift our EBITDA by around 5% and cost cash contribution by 8%-10%, a meaningful contribution to our financial performance. We are acquiring a quality company at attractive valuation, about two and a half times estimated EBITDA.
In fact, the equipment we are buying would cost roughly $35 million-$40 million to replace, so we are adding significant discount capacity at the discount. The transaction also comes with a short payback period of about two years, which speaks to both the strength of the underlying business and our disciplined approach to capital allocation. Longer term, this acquisition supports higher shareholder return and continued deleveraging, which remain key priorities for us. Moving to slide nine. Let me also touch on the equity transaction we just recently completed, which was met by strong demand from investors. The transaction combined a $20 million private placement with a $49 million secondary sale, representing about one-third of Archer's market capitalization in one day. We saw strong participation from our main shareholder, including Hemen Holding, which increased its investments.
At the same time, we were able to broaden the investor base with new institutional investors coming on board. This gives us a more diversified ownership structure and, importantly, enhances liquidity and free float in the markets. Turning to the chart on the right, you can see the impact on our ownership structure. Paratus, our legacy shareholder, fully exited through the secondary sale. At the same time, Hemen Holding and Lodbrok Capital, the two largest shareholders in Paratus, subscribed directly for additional shares in Archer. That means we retained the long-term support of these key investors, no other direct shareholders. In particular, Hemen Holding increased its ownership from 21.5% - 0.6%, reinforcing Hemen's strong commitment to Archer's future. Finally, our free float increased from 55% - 69%, which further improves trading liquidity and makes the shares more accessible to new investors going forward.
Overall, this was a very successful and well-received transaction, one that strengthens our shareholder base, supports our strategic growth, and positions Archer well for the next phase of value creation. With that, I hand over the call to Espen.
Thank you, Dag. Operational revenue in platform operations increased by 14% in the quarter, ending at $136 million, while total revenue of $158 million was flat in comparison. EBITDA came in at $17.6 million, a 5% reduction compared to the previous quarter and 8% above the result in the third quarter 2024. The strong EBITDA in Q2 and Q3 is fueled by modular drilling rig activity. Overall, platform operations had a quarter of high activity and strong performance, and we had a successful startup of our P&A operation for our compact workover rig in Norway for Equinor. Moving to slide 11.
For the quarter, our well services division delivered revenue of $89.1 million. That is 11% higher than the same quarter last year, showing solid year-on-year growth. Compared to the previous quarter, revenue is 7% higher, driven by an increase in reimbursable revenue as underlying activity levels remained stable. EBITDA came in at $14 million, which is a 19% increase compared to the same period last year, while it is 7% lower than the previous quarter. The activity in Norway across all service lines is reinforcing our strong position in this market. In the U.S. and U.K., we continue to see softer activity in line with the general market and our competitors. In the U.K., drilling and intervention is at a record low, and the only activity is P&A related, and we are suffering this year on delayed startup on Fulmar for well services. Slide 12, please.
In the quarter, our land drilling revenue was $62.7 million, reflecting reduced activity in the south of Argentina. EBITDA came in at $4.9 million and reflects an improvement compared to Q2 after the right-sizing of the organization following the reduction in operation for the south of Argentina during the second quarter. Adjusted EBITDA was $5.7 million, down from $9.9 million last year, driven by lower drilling activity. Overall, service activity in Argentina is down about 27% compared to January 2025, as indicated by Baker Hughes' rig count. We expect drilling activity to remain flat throughout the remainder of 2025, while we foresee an increase in 2026. During the quarter, Pan American Energy renewed two drilling contracts in Vaca Muerta for a period of two years. Next slide, please. The renewable segment delivered revenue of $33.4 million this quarter, a modest reduction compared to the previous quarter.
EBITDA was $4.5 million, up from $3 million last quarter, a strong sequential improvement. The improvement is reflecting strong results from our geothermal drilling, partly offset by losses incurred in our floating offshore wind segment. We saw high activity and strong utilization of rigs in the geothermal segment, supporting the positive financial performance. Vertical services experienced high seasonal activity in wind, with operation running at full capacity. In offshore wind, the assembly and fabrication of the floating substructure for Total is experiencing delays, and the plan is to tow it to the field in the first half of 2026. Let me wrap up today's call with the key takeaways for the quarter. Each of these points reflects the solid progress we have made and the strong position we're building for the future. One, we are continuing our strong growth in EBITDA, also in a softer market.
We continue with bolt-on acquisitions, and we acquired Premium Oilfield Services in the U.S., an accretive transaction yielding meaningful synergies. We raised $20 million in a private placement to fund the acquisition, with continued strong support from our main shareholders. We maintain our shareholder return program, which currently yields around 11%. To sum it up, we are executing well, delivering on our commitments, and positioning Archer for continued profitable growth. With that, I will hand the call over to the operator for any questions. Thank you, Drew. Will you please open the line for questions?
Of course. Thank you. If you would like to register for a question on today's call, please press star followed by one on your telephone keypad. If you wish to withdraw your question, it's star followed by two. As a reminder, that is star followed by one on your telephone keypad.
To withdraw your question, star followed by two. It looks like we have no questions registered at this time, so I'll hand back over to Espen Joranger for some closing comments.
We appreciate everyone joining us for this quarter's call, and we look forward to speaking to you next quarter. Thank you and have a good day.
Thank you for joining today's call. That concludes the call. You may now disconnect your line.