Good morning, ladies and gentlemen, and welcome to the Ensign Energy Services Inc. Third Quarter 2026 Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, Friday, November 6, 2026. I would now like to turn the conference over to Trevor Russell, Chief Financial Officer. Please go ahead.
Thank you, John. Good morning, and welcome to Ensign Energy Services Third Quarter Conference Call and Webcast. On our call today is Bob Geddes, President and COO, and myself, Trevor Russell, Chief Financial Officer. Today, we will review Ensign's third quarter highlights and financial results, followed by our operational update and outlook. We will then open the call for questions. Our discussion today may include forward-looking statements based on current expectations that involve several business risks and uncertainties. The factors that could cause results to differ materially include, but are not limited to, political, economic, and market conditions, crude oil and natural gas prices, foreign currency fluctuations, weather conditions, the company's defense of lawsuits, the ability of oil and gas companies to pay accounts receivable balances, or other unforeseen conditions that could impact the demand for services supplied by the company.
Additionally, our discussion may refer to non-GAAP financial measures, such as adjusted EBITDA. Please see our third quarter earnings release and SEDAR+ filings for more information on forward-looking statements and the company's use of non-GAAP financial measures. With that, I will pass it on to Bob.
Thanks, Trevor. Good morning, everyone. Great quarter with 17% year-over-year increases in operating days, revenue, EBITDA, and funds flow from operations. We also made a strategic acquisition in the quarter, closing the Citadel Drilling and Opla MPD deal in mid-August, adding six super-spec triples, all of which are active and generating strong cash flow. One is actually down today for a scheduled recertification and then is going back to work. With the Citadel Opla acquisition, we are happy to have all the Citadel and Opla field crews and office management on board and integrated into the organization. Very impressive team. In the third quarter, we also expanded our forward book, which now takes us to $1.6 billion of forward revenue contracted, and which ties up 70% of our global market and fleet.
We landed our first real-time operating center project with our Advanced Performance Management team in Houston, where we will be guiding an Ensign rig halfway around the world in Australia, with performance improving 24/7 guidance. This is not a directional guidance service per se, and is more focused on maximizing drilling parameters on a 24/7 basis that help reduce well times for the operator. This service is highly extendable to be applied, not only to any, not only to Ensign rigs, but any drilling rig anywhere in the world. We continue to see quarter-over-quarter growth opportunities, and we continue to deliver significant safety results. For a deeper dive into our third quarter, I will turn the call back over to Trevor.
Ladies and gentlemen, this is the operator. I apologize, but there will be a slight delay in today's conference. We are experiencing some technical difficulties with the line of Mr. Bob Geddes. Until that time, your lines will remain on music hold. Thank you for your patience. Bob, please go ahead.
Good morning again, everyone. Trevor, where did I cut off there? I am just traveling here today and, Trevor, fill me in.
It might be best just to start at the beginning again.
Okay. Good morning, everyone. Great quarter with a 17% year-over-year increase in all the key metrics, operating days, revenue, EBITDA, funds flow from operations. We also made a strategic acquisition in the quarter, closing the Citadel Drilling and Opla MPD deal in mid-August, adding six super-spec triples, all of which are active and generating strong cash flow. One is actually down today for a scheduled recertification going back to work in a few weeks. With the Citadel Opla acquisition, we are happy to have all the Citadel and Opla field crews and office management on board and integrated into the. Very impressive. In the third quarter, we also expanded our forward book, which now sits at $1.6 billion of forward revenue contracted and which drives up 70% of our global market.
We landed our first real-time operating center project for the Advanced Performance Management team in Houston, where we will be guiding an Ensign rig halfway around the world in Australia with performance and 24/7 guidance. We continue to see quarter-over-quarter growth opportunities, and we continue to do this with a record safety result. For a deeper dive into our third-quarter results, I will turn the call over to Trevor Russell. Trevor.
Thank you, Bob. The oil field services sector remains a cautiously constructive outlook as industry activity has generally improved year-over-year, despite continued volatility in global energy markets. Global developments, including ongoing instability in the Middle East, disruptions in the energy flows through the Strait of Hormuz, and the continuing conflict between the Russian Federation and Ukraine, and evolving United States trade and foreign policy actions continue to influence commodity prices, supply chains, and customer spending decisions. Recent disruptions in the Strait of Hormuz has highlighted the sensitivity of global energy markets to political events and the potential impact on oil supply and pricing. During the third quarter of 2026, the company acquired all the issued and outstanding shares of Citadel Drilling Limited for a total compensation of $81.9 million.
The strategic business combination was completed to enhance the company's presence in the U.S. Permian area with six high-spec drilling rigs that are fully contracted and expect the company's product offering to increase with Citadel's managed pressure drilling division. Operating days were higher in the third quarter of 2026 in comparison to the third quarter of 2025. The company saw a 16% increase in the United States to 3,721 days, an 8% increase in Canada to 3,790 operating days, and a 19% increase internationally to 1,013 operating days. For the nine months ended September 30th, 2026, overall operating days increased with the United States recording a 12% increase and international recording an 11% increase in operating days respectively. Offsetting the increases was a 1% decrease in our Canadian operating days when compared to the same period in 2025.
The company generated revenue of CAD 481.7 million in the third quarter of 2026, a 17% increase compared to revenue of CAD 411.2 million generated in the third quarter of the prior year. For the nine months ended September 30th, 2026, the company generated revenue of CAD 1.3 billion, a 6% increase compared to the revenue of CAD 1.2 billion generated in the same period of 2025. Adjusted EBITDA for the third quarter of 2026 was CAD 115 million, 17% higher than the adjusted EBITDA of CAD 98.6 million in the third quarter of 2025. Adjusted EBITDA for the nine months ended September 30th, 2026, totaled CAD 295.7 million, 5% higher than the adjusted EBITDA of CAD 282.3 million generated in the same period in 2025. The 2026 increase in adjusted EBITDA was primarily the result of higher operating activity in addition to the increase in operating days due to the Citadel Drilling acquisition.
Depreciation expense in the first nine months of 2026 was CAD 265.6 million, an increase of 5% compared to CAD 252 million for the first nine months of 2025. General and administration expenses in the third quarter of 2026 was 11% higher than in the third quarter of 2025. General and administration expenses increased due to the annual wage increases and the Citadel Drilling acquisition. Interest expense decreased by 4% to CAD 17.7 million from CAD 18.4 million in 2025. The decrease is the result of reduced debt levels prior to the Citadel Drilling acquisition and lower effective interest rates. During the third quarter of 2026, CAD 68.7 million of debt was drawn, and a total of CAD 31.7 million was drawn during the first nine months of 2026 as a result of the Citadel Drilling acquisition. The company has revised its previously announced 2026 debt reduction target of CAD 60 million to CAD 50 million.
The revision is the result of the Citadel Drilling Limited acquisition and reinvesting into the company through capital expenditure. If industry conditions change, these targets may be increased or decreased. Net purchases of property and equipment for the third quarter of 2026 totaled CAD 85.3 million, consisting of CAD 26.9 million in upgrade capital and CAD 63 million in maintenance capital, offset by dispositions proceeds of CAD 4.6 million. Our 2026 capital budget is set at approximately CAD 190 million and selective upgrade capital of approximately CAD 100 million. As at September 30th, 2026, the company had total customer capital commitments of CAD 87 million related to various upgrade projects that will be recognized over their respective contractual terms. Of the CAD 87 million, CAD 32 million has been received and recognized to date in revenue. CAD 32 million has been received and is recognized as deferred revenue, and CAD 23 million is yet to be received.
On that note, I'll turn it back to Bob.
Thanks, Trevor. Let's start with a global summary here of our third quarter, and then I'll provide some insight into what we are seeing develop under this volatile yet still strong commodity pricing environment. Around the globe, we have 114 high-spec ADR rigs active today, along with 50 well service rigs in North America and 25 Opla MPD units on locations generating revenue. Let's dive into each of the business unit areas, starting with U.S. drilling. With the Citadel acquisition, we were up to 51 high-spec ADR drilling rigs active in the U.S., which increases our market share in the Permian, the world's largest and most active market, to 9%. We have 9% of the Permian market now. We also upgraded and reactivated two super-spec triples and also reactivated a third rig and moved it from the Rockies to Nevada onto a geothermal project.
We have three of our U.S. rigs continually engaged in geothermal projects. We continue to see a more active bid book, which is allowing us to move rates up roughly $1,000 a quarter. We're also seeing more private equity and new names flow into the business because of the strong commodity price construct, which provides for more shoulder plays becoming competitive. Starting on the West Coast and moving east, we are seeing our California drilling asset base up a rig since the second quarter, and now add six high-spec ADR rigs under contract with expectations of adding a couple of rigs into the new year. We are up a rig in the Rockies division with nine active in that division today.
In our U.S. Southern unit, we jumped nine rigs since our last report to 36 in the U.S. Southern business unit, five of which the result of the Citadel acquisition. As I mentioned before, one of the six Citadel rigs is down for recertification and will be back to work shortly. The Permian continues to be our most active and prolific area, with continued strong demand for our high-spec ADR rigs that can drill five-mile laterals, and with an expectation that we should see four to five more rigs go to work between now and into the first quarter of 2027. I'll point out that roughly half our U.S. Southern rigs in the Permian are on a performance-based contract, which elevates margin opportunities a further 10%-20%.
Turning to Canada, we operate the second-largest fleet in Canada, which consists of a wide range fleet of high-spec rigs, from singles to the deepest triples. Through the third quarter, we completed three high-spec triple rig upgrades and reactivated three additional rigs, a high-spec single, a high-spec triple, and a high-spec double, all of which have been down for about two years. Those are back and running now. In the third quarter, we also maintained an average activity of roughly 50 drilling rigs active coming out of the summer into the fall, with growth focused on the higher-margin high-spec singles and high-spec triples. We maintain a 22% market share in the Western Canadian Sedimentary Basin, with opportunity to grow that with our fleet of high-spec single and high-spec triple additions.
There was a recent industry-wide wage increase of roughly 5%, which was passed onto the operators via the escalation clause in the contracts. The team is raising rates as we price into the busy winter season, with roughly 5%-10% rate increases depending on the rig type in the area. We expect to hit 60+ rigs active as a peak in the first quarter of 2027, and with that, any incremental rigs that go to work will require CAD 3 million-CAD 5 million of capital to recertify and reactivate. This provides a strong backdrop to have operators fund those costs, either through direct funding or with 20% rate increase split term. On the international front, as I mentioned on prior calls, the geopolitical climate has flipped. A year ago, we talked about the stable Middle East and the unstable Venezuela. That is backwards now.
Venezuela is our most active growth opportunity, where we currently have two rigs active and growing a rig a quarter as we move forward. The goal is to build to a 15-rig operation in the country over the next few years. As you know, Ensign has been active in Venezuela for 25 years and lived through the thick and thin, with solid and loyal support from our Venezuelan team. Staying in South America, our Argentina business unit has both rigs fully active and contracted into the future. Our Middle East is defined by what end of the Strait of Hormuz you are at. In Oman, we have all five rigs active under contract, while Kuwait has both rigs down and bidding into mid-2027 work. Our two rigs in Bahrain are P90, at least with one of the rigs going back to work in the area in the new year.
Australia has four going to five rigs active, with strong bid activity likely to see us landing a few more rigs over the next few months. Well servicing. Today, we have 50 well service rigs active, with Canada up year-over-year, with 20 active today and a growing number on 24-hour projects, which are very profitable. In the Rockies, we are picking up some plug and abandonment work, with 30 active today. We have 10 well service rigs working today in our California business unit, working for our usual client base there. Also seeing more demand for a la carte rental items associated with well servicing, which have very high margins.
On our EDGE drilling rig automation group, as mentioned at the beginning of the call, our drilling solutions team landed its first real-time operating center APM contract, Advanced Performance Management contract, where we will be supplying on a 24/7 real-time basis out of our Houston real-time operating center, drilling performance advisory services direct to the rig halfway around the world. The APM team of performance drilling engineers takes the operator's well plan and applies our experiential knowledge on APM to the team on the rig to help deliver maximized performance. We have our EDGE automated drilling system installed now on roughly 60% of the fleet, and we continue to expand our product offering matrix.
We also have our EDGE drilling solution team actively engaged with our newly acquired Opla MPD team in order to help build out more efficient HMI screens for the drillers and introduce more automation woven into the MPD process. Moving to the Opla MPD, we are excited with the recently acquired Opla MPD group, which was part of the Citadel acquisition. Ensign has been in the UBD MPD business for over 15 years and had a few units active in Canada before the acquisition, and now we have a platform to seriously grow with. With the addition of 28 MPD units, of which 23 are active today, this business line is an exciting opportunity to add margin and drive synergies on the rig. The Opla team have deep engineering and operational capacity, and we welcome all of them to the team.
With that, I'll turn it back to the operator for questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Our first question comes from the line of Aaron MacNeil from TD Cowen. Please go ahead.
Hey, morning all. Thanks for taking my questions. Bob, on the 15 rig Venezuela target, can you walk us through what's actually committed today versus still prospective? Can you give us a sense of timing? I know you said one rig a quarter, but how many of those rigs are already in country versus requiring import? Where is the contract situation today, and what are the rig specs that your customers are looking for there?
Yeah. We have two that have been active in the country for quite some time, up and down over the last three years. They are running, of course. They are basically higher spec triples. They are not super-spec triples. They are not like a Permian rig. They would be a slightly smaller version of a Permian rig. We have another one that has landed in the country that will be starting here next week. That will bring us to three. And then we have its sister rig, which will be on its way in a month or two. And then we have another sister rig that has been on Barrow Island in Australia for about five years. It is hopping on a boat and sailing west to Venezuela. It will be there in the new year, so by next summer, we should be up to five.
We also have a cadence behind that we are working on with operators to fill in behind that. You are going to kind of see us add a rig a quarter as we move forward.
Just not to put too fine a point on it, but maybe five contracted, is that fair?
Yep
In discussion the remainder?
Correct.
Got you.
Yeah.
Outside of Venezuela, how many additional rigs in the existing fleet could realistically be upgraded and reactivated over the next 12 to 24 months, and how much of that opportunity could be supported by customer funding rather than Ensign capital?
Specific to Venezuela still, Aaron?
No, outside of Venezuela, just more North America.
Oh, just generally, yeah.
As a focus. Yeah, yeah.
Yeah, that is a very good question, and we have had a few large clients canvas industry to ask that very question, because right now, if 85% of the rigs are running, that is essentially 100% activity because you have certifications, you have moving and rigging, other things happening. So 85% is like 100%. And we are basically close to 80% utilization on the high-spec triples if we use Permian as a proxy for this conversation. Anyway, back to the comment that a few operators went and canvassed, and they found that everyone is kind of in the same position, that the next rigs coming out of the yard will need $3 million-$5 million to reactivate and recertify and put them to work. So the market is starting to tighten up real quick.
That same situation is true north of the border as well on the high-spec singles, which we are sold out of, and the high-spec triples, which I think we maybe have one or two that are available today. We really do not have anything behind that. If anyone is going to put rigs up to the market today, they are having to add capital to recertify and reactivate. With that, we are asking the operator to pony up and pay for that, or we will raise the day rate accordingly and make that incremental CapEx investment back in the first year.
Okay. Makes sense. Thanks for the time. I will turn it back.
Yeah. Thanks, Aaron.
Our next question comes from the line of Keith Mackey from RBC. Please go ahead.
Hey, thanks. Good morning. Can you just maybe start out on the financial liquidity? It looks like it got a little bit tighter quarter-over-quarter. Can you just kind of walk us through the mechanics of the CAD 50 million debt repayment target for Q4, and then maybe an early look at what you are thinking about for 2027 as far as capital and debt repayment?
Sure. What we're looking at for Q4 is about the same kind of trend, I guess, on the adjusted EBITDA side, with a bit of a reduced plan for CapEx in the quarter. As well as we do have some property sales, or a property sale that has been completed in Q4. So, that along with some customer-funded projects coming in, we're expecting to have enough funds flow from operations as well as from these other sources to bring us back into that free cash generation to continue to repay the debt.
Okay. Thanks for that. Bob, can you maybe just walk us through what you're seeing in Canada? Certainly the rig market in Canada has been fairly strong the last several years. Is there more upside in the Canadian market, or have we kind of hit peak margins, hit peak rig counts? Just maybe walk us through what you're seeing as we head into 2027 winter drilling season.
Well, it's a good question. As strong as activity is, what we found is, where people are talking about rig types being sold out, they get a call and they found another rig in the backyard that they can reactivate and upgrade and put to work. Most of that is behind everyone now. Now the situation is, we're going to have to spend at least CAD 5 million to do this, and we, again, either need the money to do that or we're going to raise our rates. Raising the rates, of course, brings all of the harbor up on everything else around it.
It feels a lot like some markets I've seen before, having some experience in this area, where when you bid something and someone calls and you say, "I'm sorry, that rig is no longer available," and then a couple hours they call back later and say, "Okay, what's the second choice here? Let's go with not the rig I'm exactly looking for, but I'll pick another rig." That's when the market starts to move, and it starts to move very quickly when that happens because of the tightness in the market will drive it. So, that feels, my spidey senses kind of saying, this winter we may see some of that happening on certain rig types, the high-spec singles, the super-spec triples, for sure. It's feeling like that, yes.
Okay. Does that mean that we might see an incremental pricing on some of the doubles market if we do get into that dynamic? Would that be more of an upside scenario right now, or do you think that we might actually see that?
Well, the high-spec doubles, there is a little more capacity. What starts to happen is, where people have a They want a super high-spec single, one of our ADRs, and they are all sold out. They go, "Okay, well, give me a double." A double will move slightly slower than a high-spec single. It does not take up much more acreage on the location. "Give me your double." We will see demand for the double start to pick up. With demand picking up, of course, rates will start to increase slightly as well.
Yeah. Okay. Thanks very much. Appreciate the color.
Thanks, Dave.
As a reminder, if you have any questions or follow-up, please press star one. Our next question comes from the line of Parvin Mamedov from Equinox Partners. Please go ahead.
Hi. Hi, Bob. Congrats on the results.
Hello.
I had a question on the overall expectations for 2027. It sounds like for triples, utilization is pretty high, so the upside will be coming from the higher rates. For doubles or singles, that is where the utilization still has room to increase. Is that the right way to think about it?
Yeah. Doubles, the high-spec singles were basically sold out of, so the upside on days will come from the doubles, correct.
How do the clients choose between asking you to bring online a triple rig that will be higher productivity and pay for it instead of going to a double rig, which is probably less attractive in terms of economic returns to use it?
Generally, if you are needing a triple, that would have to be a very. Generally, when people are looking for triples, they are either outside of the double capacity. Where the doubles come into the conversation is when you have singles that are sold out and you bring in a small double that takes a little bit longer to move, not much, but that is where the incremental days will come in from the singles moving up to the doubles rather than the triples moving down to the doubles.
Have you already seen this? Because I think singles has been maxed out for at least a year now. Have you already seen what has been the increase in utilization for your doubles in last 12 months?
The utilization in the double fleet is, because there is a lot of them in the Western Canadian Basin, is running around 60%. What we are seeing happen is, I think there is probably a few high-spec singles still in the backyard that people can bring in and recertify and put out. People are, of course, not willing to do that until they either get some contract or the operator puts up the capital. So that is why you see the high-spec single market being essentially sold out with a small excess capacity in the backyard. As I mentioned before, the excess capacity in the backyard, you go look in the backyard, it is not there anymore. It is out working. So people have added one or two rigs here and there. We have done that as well.
In the last quarter, we added a high-spec single that was in the yard, and it needed to be upgraded and recertified. We just weren't prepared to do that until the market hit a certain price.
That's helpful. Thanks. One last question on upgrades. Do you have a rough sense of what kind of return you're getting when you're upgrading the rig? You said you would spend $3 million-$5 million. What kind of incremental daily rate in terms of top line or bottom line you get on these rigs to justify that spending?
We look for a one-year payout. Any upgrade or reactivation of a rig, we look for a one-year payout on it. If it doesn't, we raise the rates or look for more money from the operator. But the modeling for the sales team is targeted to, we've got to get a one-year payout on our incremental capital invested. Incremental capital invested, yeah.
It's assuming just whatever spot rate you have now?
Correct. We have been raising rates into this construct as well, as we go through this. We would rather have the operator put up the capital up front, for obvious reasons, and have a very small day rate increase for a six-month period of time. When we do that, we are generally looking for a six-month contract. If the operator is wanting us to give them a day rate rather than the upfront capital, we are looking for a one-year contract, and we raise the rates significantly, basically tying the rate increase to the capital divided by 365 days.
Mm-hmm. Got it. Okay. Thank you so much.
Thanks, Howard.
Our next question comes from the line of Tim Monachello from ATB Cormark Capital Markets. Please go ahead.
Hey. Good morning.
Hey, Tim.
Curious, can you just put a fine tip on what your expectations are for your U.S. activity profile? You are running, I think you said 50 right now, 51. Where do you expect that to be by the end of the year, and what is your expectation for Q1 activity levels?
Yeah. I am thinking we slowly grow to that 55 range into 2027. Between now and the end of the year, we might have one come up. But it is slowly building. I think we would add another 10% or five rigs. You could think of that by mid-2027.
Okay. In 2026, we've seen largely activity growth being driven by private operators in the U.S. You have a lot of blue chip customers there. Are you seeing indications that they're going to increase activity levels in 2027 versus 2026, or are they largely holding flat?
Well, I'd say it's I mean, nothing's going crazy, but they are adding a rig here or there. That's kind of how we look at it. That's been kind of going on for some period of time. People are buying back shares or returning capital to their shareholders, but they're having to maintain production. With decline rates continuing to increase, they've got to continue to keep that oil flowing. So, we look at it as one or two rigs here or there. We don't have anyone saying, "Hey, we want five more rigs from you." But they are saying, "We'd like to add a rig here or there," with our key clients.
Got it. On the Venezuela front, encouraging to hear that you've got visibility of having five rigs active in Venezuela by the first half of 2027. But past that, and given the fact that it seems that the rig market is getting pretty tight in both Canada and the U.S., where are rigs going to come from to get to 15?
Well, that's a very good question. That's a very good question. It's going to tighten up the market even more. You can look in the backyard and put a rig together, and you may need a couple of pumps. You go to put those pumps on order, and they're 8-10-12 months now on order. Drill pipe is getting out there. CAT engines are getting out there. Natural gas-type engines are out over a year. So things are starting to tighten up. When things tighten up, of course, prices go up. But we've got capacity to add to the Venezuelan fleet with capital, and the capital is probably in the $10 million-$15 million range. It's not in the $3 million-$5 million range.
Again, we're working with our clients to provide that capital, because Venezuela, it's a lot geopolitically safer or more stable than it was a year ago. Could it go back to where it was? I doubt it, but anything is possible. We're also very careful about the geopolitical risk, but we can feed into it. The next step is new builds. New builds, rates have got to come up $15,000-$20,000 a day before you get into a new build conversation with anybody.
Just to be clear, the five, or I guess the incremental three rigs that are going to Venezuela, those would be a lot cheaper than the $10 million-$15 million range. Is that correct?
Oh, yeah. Yeah.
Yeah.
Yeah. Let's say yes, for sure. One has already landed. It's going to be spudding in next week. It was in that range. Of course, you got to get it there and customs duties, everything else. Transportation is not by truck. By the time you land it there, you've got a good $10 million into it. Yes.
Okay. Okay, got it. Are you getting take-or-pays on a multi-year committed basis in U.S. dollars? Is that how we should think about that?
Yeah. They're all U.S. dollar contracts. We've been there for 25 years, so we've got a good understanding on how to contract with our counterparty, and we've had a good counterparty in the past. We get paid in U.S. dollars, U.S. dollar contracts. So when we sign a one-year contract, every day is a payday. They're generally one to three-year contracts, depending on the rig and the capital involved.
Got it. Last one on Venezuela. Are you seeing any other players entering the market?
Everyone wants it. It's the hottest date in town, right? But on January 3rd last year, when the event happened, we had the only two rigs running in Venezuela. We've been there 25 years, all Venezuelans, great team down there. We got through it thick and thin. We went down to a skeleton staff when we had no rigs running, but we knew at some point in time that we didn't want to abandon Venezuela. So now it's our time to shine. But everyone is trying to find a way to get into Venezuela. It's not that easy, right? It's slowly building up. They've had a challenging infrastructure issue for a long period of time. They're building that up, and it's coming along well, but it's not a light switch type of event.
Got it. Appreciate it. I will turn it back.
Thanks, Tim.
Our next question comes from the line of John Gibson from BMO Capital Markets. Please go ahead.
Morning. Thanks for taking my question. First one, just for macro, how many rigs have moved out of the U.S. market, particularly to South America over the past year? Could this lead to tightening in the U.S. more quickly than we expect in 2027?
Well, that's a good question. I would say there's probably been about 25 rigs through various contractors that have come out of the U.S. Permian market generally, or around there, maybe some of the Haynesville market, that have made their way down to South America, Argentina, more generally, or other places around the world, but mostly Argentina. It has tightened up the market. I mean, two of our last three that we added into Venezuela have come from the Permian market.
Got it. Apologies if you've said this already, but where would leading-edge pricing be in the U.S. right now?
We're in the low 30s, and with pipe and everything else, we're in the high 30s with pipe and that. Now, keep in mind, pipe is, depending on where you're using it and which kind of mud system, is lasting anywhere from one and a half years to three and half years. So, you got to be careful with the numbers.
Just to clarify, earlier you said you were seeing a $1,000 day rate increase. Could you just expand on this?
Yeah. As we are bidding out, we are able to raise our rates on the next bid by about $1,000 a quarter. That has kind of been the cadence for the last six months here, we found.
Okay. I guess then, where do you think leading-edge pricing will be in 2027?
I think we continue to move. I think it will be, at the end of 2027, it will be about $4,000 a day higher than at the beginning of 2027. That is where I think it is going.
Okay, great. Appreciate the comments. I will turn it back.
Thanks, John.
There are no further questions at this time. I will now turn the call over to Bob Geddes, President and Chief Operating Officer. Please go ahead, sir.
Thanks, John. So in closing, we continue to see a volatile oil market, a challenging gas market, and a global energy demand picture that still remains fundamentally positive, but increasingly differentiated by geography and commodity. Ensign is excited by the opportunities we have in the different regions we operate in, and we are generally positive on the ability to increase rates as rig equipment availability starts to stretch out, and rigs that are available and not requiring capital to reactivate continue to diminish. With that, we will see you in three months on our next call. Thank you, everybody.
Ladies and gentlemen, this concludes our conference call for today. Thank you for your participation. You may now disconnect.