Hello, everyone, and welcome to the Archer Third Quarter 2023 Earnings Release Call. My name is Charlie, and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you'd like to register your question, please press star, followed by one on your telephone keypad. I will now hand over to our host, Dag Skindlo, Chief Executive Officer, to begin. Dag, please go ahead.
Thank you, Charlie. Good morning, ladies, and gentlemen, and thank you for joining the Conference Call for the Third Quarter of 2023. Archer's Chief Financial Officer, Espen Joranger, is joining me on the call today. In today's call, I will touch upon the key highlights and summarize Archer's operation for the third quarter. Espen will thereafter walk us through the financial section and the outlook. Towards the end of the call, we will open the line for questions. Moving to slide two, I would like to note that information provided in today's call include forward-looking statements as well as non-GAAP financial measures. Forward-looking statements do not guarantee future performance and involve risk and uncertainties. Actual results may differ materially from projections. Further information about these risks and uncertainties are set forth in our most recent annual report for the year ending December 31st, 2022. Next slide, please.
First of all, very pleased to report that we keep growing and taking market share. Revenue in the quarter of $303 million represents an increase of 26% year-over-year, despite unfavorable movement in exchange rates. Archer delivered record level EBITDA for the quarter, with Adjusted EBITDA of $32.3 million, while reported EBITDA came in at $30.7 million. The growth in Adjusted EBITDA compared to previous year was 37%, while the EBITDA margin exceeded 10%. The growth in EBITDA was accomplished through the combination of solid revenue growth and margin expansion, especially Well Services delivered strong results in Q3 and reported the highest EBITDA ever, contributing to about 45% of Archer's EBITDA in the quarter. EBIT for the quarter amounted to $16.6 million, or 5.5% of revenue.
We continue to be on track to reach our 2023 guidance, and we expect EBITDA to grow by close to 35% compared to previous year. The adjusted net income is positive, coming in at $3.7 million. The adjusted net income reported excludes income and costs, such as mark-to-market changes in financial instruments, debt, fee amortization, sale of assets, and effect of currency fluctuations in order to highlight the underlying profitability of Archer's operations. Slide four, please. In the third quarter, revenue within the Well Services segment continued to increase and ended at $82.9 million, an 8% increase from previous quarter. EBITDA for the quarter ended at $13.9 million, which is, as mentioned, the best quarterly EBITDA for, from Well Services ever.
This segment has delivered just under 20% annual organic growth over the last five years, with EBITDA growth of more than 50% this year. Preliminary estimates for 2024 indicate that we are back on historic organic growth rates around 20%. The increase in our activity is a result of increased demand for our products and services, as well as contribution from our acquired businesses. With such strong quarter, many operations and sales take place, but I want to highlight positive contribution from the contract operation at Basin in the quarter. Following establishment and growth of our Well Services division in the Brazilian offshore market in recent years, we were awarded a strategic contract with Petrobras to develop new proprietary technology for P&A of deepwater wells in Brazil.
It is an important award for us as we have strengthened our relationship with Petrobras, as well as being given an opportunity to prove our ability and capability in developing purpose-fit technology for their requirements in the deep water offshore wells. Successful development and commercialization of the method and tools will open up a large market for Archer. Next slide, please. Revenue in platform operations increased by 7% from last quarter, ending at $139 million. Following a soft Q2, EBITDA increased by 46% from previous quarter, ending at $14 million. The increase in EBITDA and revenue was impacted by the successful completion of the quick P&A campaign in New Zealand for OMV, improved uptime for Topaz on a P&A project in the U.K., and overall improved performance in platform drilling and engineering.
Following solid deliveries in both our engineering and platform drilling segments, we have received several performance incentives across clients for both platform drilling and engineering in the quarter. Our drive to support our customers' objective, objectives are increasingly giving us, giving us a better position to integrate with our customer and to win more, more work. Our model rig, Emerald, arrived in the U.K. at the end of September and is currently undergoing recertification and being prepared for the Fulmar contract for Repsol. Our platform drilling operations was impacted by a Apache U.K. decision to reduce their drilling activity in the quarter, but this had limited impact on Archer's overall results. Next slide, please. Decommissioning of platforms and wells is significant and will offer companies like Archer substantial growth opportunities. The growth in this market comes in addition to the current strong overall activity increase in the industry.
We see a high demand for P&A and decommissioning services going forward. The strongest activity and near-term increase in the decom market is in the U.K., where operators will spend an estimated $26 billion within 2040. As evidenced by the integrated P&A Fulmar contract awarded to Archer in the third quarter, we are well positioned to service our customers to permanently P&A their wells. The global offshore decom market is expected to grow more than 100% over the next ten years. This market, which only to a lesser degree, is impacted by fluctuations in the oil price, will underpin profitable growth for Archer for decades to come. The permanent P&A of oil and gas wells is an essential activity to curb global emissions and protect the environment. Our goal is to industrialize the P&A process and spearhead innovation to cut operators' decom costs globally.
Archer is uniquely positioned with a combination of drilling and a broad well services offering for both production enhancements and decommissioning wells. We have extensive experience and holds the most advanced portfolio of P&A tools in the industry. These are technologies we have developed organically and also acquired in some small acquisitions. Some interesting facts on decom and P&A. About 50% of offshore decom spend is well P&A. About 40% of the global offshore decom activity will take place in the North Sea. U.K. is first and have the largest decom liability in the North Sea and internationally. Global offshore decom market to increase more than 100% in the next 10 years. Globally, the six largest IOCs or international or majors have between $12 billion-$22 billion each in decom liabilities.
Again, as mentioned already, the permanent plugging and abandonment of oil and gas wells is an essential activity as the world decarbonizes on the road to net zero and is a growing market going forward. Next slide, please. In the graph to the left, we illustrate the decommissioning commitment by operator in Denmark, Norway, and U.K. In the North Sea, more than 25,000- more than 20,500 offshore wells have been drilled, of which some 11,600 are in the U.K., 6,200 in Norway, 270 in Denmark, and 2,100 in the Netherlands. All of these wells have to be permanently plugged and abandoned, and all the fixed installations and service installations need to be decommissioned and removed. It is a massive task, where Archer is preparing to be the market leader for well P&A.
Rystad estimates $32 billion to be spent between now and the end of 2039, of which between $13 billion-$16 billion, or 50%, will be spent on drilling and well services, which is the key market for Archer services. Fulmar project represents less than 10% of Repsol's well spend in the next 17 years, and this shows the importance of aligning with larger players. Equinor has the largest decom liability in Norway, but the majority of the cost will come after 2040. Archer is currently planning the P&A campaign for Statfjord A, where the platform will be lifted off in 2027. We are tightly integrated with Equinor for planning, and the drilling and well services team will be the lead contractor for this operation. This is building the track record for larger scope contracts also in Norway.
Being part of Equinor in FLX and their late life group, gives us a great position as more assets mature and enter late life operations. Next slide, please. Our revenue from land drilling activity came in somewhat lower than the previous quarter, but at levels in line with the preceding quarters. The revenue reported in U.S. dollars was negatively impacted by the sudden and dramatic depreciation of the peso in August, following the results from the primary elections. However, the cost in USD was also reduced, so the impact on the evaluation inflation on EBITDA was in the $700,000 range for the quarter, or some 2%, 2%-3% of the quarterly overall EBITDA. Over time, we are not significantly impacted by fluctuations in currency and inflation in Argentina.
Sometimes they do not move in cadence, and you can make a gain or a loss. EBITDA ended at $6.1 million, in line with our forecast and expectations, as we did predict uncertainty during the election period. During the quarter, we incurred $500,000 in severance payments related to down manning and, not the least, retirements. The general activity for our land drilling division remained stable and the number of active drilling rigs during the quarter remained at 11. One pulling unit was, however, demobilized. Operational performance continued to be solid, with minimal downtime. However, we had less opportunity to make performance incentives related to well program during this quarter. The Argentine market continues to be unstable after the pre-election, and we expect financial and political uncertainty to continue.
However, our client's current drilling program will support similar activity in 2024 as in 2023. Our operation in Argentina and the oil and gas industry in the Vaca Muerta Basin is often overshadowed by the development in the Argentine economy. However, the oil and gas production in this region has grown substantially and is set to grow further. There are certain constraints in both infrastructure and service provisions in the area, but given these constraints are sorted out, this indicates that the production from Vaca Muerta could reach 1 million barrels per day by 2030. If the drilling and new wells is at the same as per graph to the left. The major constraints are infrastructure and number of rigs in order to achieve this production level.
Multiple infrastructure pipelines have been sanctioned, and the gas capacity was increased by the opening of the first stage of the Néstor Kirchner pipeline in July this year. While the oil takeaway capacity will be increased by new pipelines to be operated over the coming years. Argentina is clearly dependent on the development of its vast resources, both to meet internal demand and also to get, generate very much needed U.S. dollars to export. In these uncertain periods, it is worth remembering, Archer is the leading drilling contractor with high-spec drilling rigs in Vaca Muerta. Inflation and currency fluctuations are largely natural for Archer's earnings over time. Main challenge is currency restrictions, limiting new investments and getting cash out of the country. However, Archer has taken out $66 million of cash in 2015, over around $4 million in 2023.
So overall, a good story. We will continue to drive the business and generate good returns. With that, I hand the words over to Espen.
Thank you, Dag. Looking at slide 10, total revenue in the quarter of $302.7 million represent an increase of $62.5 million or 26% increase from the same quarter last year, driven by increased activity in all our business areas. With an underlying EBITDA of $32.3 million, our Adjusted EBITDA margin ended up 10.7%. After adjusting for exceptional items of $1.7 million in the quarter, EBITDA ended at $30.7 million. This is an increase of $7.8 million or 34% compared to third quarter last year. As already mentioned, the increase in EBITDA is attributable to general increase in activity driven by international growth with higher contribution. In addition, we had a stronger quarter related to performance incentives across all divisions.
Our net interest expense in the third quarter is currently reflecting the normalized drawing on our facilities and bond. The debt fees incurred in relation to the refinancing will be amortized over the duration of the loans, and we have singled out this line item in the P&L. For Q3, this amortization of prepaid debt fees amounted to $2 million, which will be stable going forward. Net income for third quarter ended at -$2.5 million. However, as Dag mentioned in the introduction, the adjusted net income when removing impact from items such as impairments, foreign exchange impact, mark-to-market movements on financial instruments, and so on, adjusted net income ended at $3.7 million. Next slide, please. Moving to slide 11, we note that cash and cash equivalents at the quarter end was $75.8 million.
The restricted cash balance of $0.5 million is a reduction compared to December 2020, and is explained by the implementation of a guarantee for employee tax for Norwegian employees. Equity of $179.6 million increased by roughly $100 million from end of 2022, as a result of the private placement of $100 million in March 2023, and the conversion of the subordinated related party loan of $15.9 million. Over the quarter, we fully divested our shareholdings in KLX Energy Services for a total consideration of $10.4 million for the full year 2023.
In order to facilitate the growth over the year, we have invested in our inventory to meet growth in well services internationally and for our new technologies, and we also see impact on working capital on the increase in our receivables on the back of increased activity and revenue. Slide 12, please. In the graph to the upper left, we display the development in last 12 months EBITDA and Adjusted EBITDA. We are very pleased with this general trend, as we see a 32% growth in EBITDA. Following this metric through the line graph below, we are extremely satisfied with the reduction in leverage ratio over the last quarters. We are currently at a comfortable debt levels, and we see that our ability to grow is impacting this important metric for us at a steady pace. Next slide, please.
We are reiterating our financial guidance for 2023. We are well on track to reaching these key metrics, and we are aiming to end the year close to the upper interval of the guided revenue and EBITDA. Archer see solid improvements in financial performance in 2023 compared to 2022 on the back of a strong backlog and market positions. Revenues for 2023 is guided to increase by 15%-20% compared to 2022. EBITDA for 2023 is expected 30%-35% higher than 2022. CapEx is still between 3%-4% of revenue. To sum up, we are uniquely positioned to capture the growing P&A and decommissioning market, enabling us to grow within production and P&A for the next 20-30 years.
As we announced in August, Repsol awarded us an integrated decommissioning contract, where we will execute the plug and abandonment of 30 wells in the Fulmar field and two wells in the Halley field. This contract will drive growth in the coming years, while it also showcasing the potential for Archer to further grow in this market, as we're tendering for two to three contracts similar in magnitude. We have proven our ability for accretive bolt-on acquisitions. There are more opportunities for accretive acquisitions in the current market, and we continue to explore these. Finally, we continue to be committed to the energy transition and net zero target in 2050. Our commitment toward these targets, we are going to help our customers and clients targets to reach their goals. With that, I will hand the call over to the operator for any questions.
Thank you, Charlie. Will you please open the lines for questions?
Of course. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure you are unmuted locally. As a reminder, that's star followed by one on your telephone keypad now. We currently have no questions registered on the call, so I'll hand back over to Espen Joranger for any further remarks.
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 great day.
Ladies, and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.