Q2 Results1. Ensign beats Ebitdas estimates modestly: $116.6 million compared to projected $113 million
2. US rig count has been reduced leading to flat projections for Q3
3. Management has commenced discussions with its syndicate to extend its credit facility and obtain a new term loan that will be used to repay the 9.25% April 2024 Senior Notes and remains confident in its ability to refinance its debt which will likely be completed by Q3/23. Year-to-date, management has paid down $112.5 million of debt, and remains on track for its 2023 debt reduction target of $200.0 million as well as its longer-term target of $600.0 million from 2023 to 2025.
4. Q2/23 results were relatively in-line with expectations. Note that the weakness in natural gas pricing is broadly expected to be short-lived. To the extent that Ensign can be successful in refinancing its debt, we would view that as a positive near-term catalyst. In this context, we are maintaining our BUY rating and $5.00/share target price.