Introduction

Ensign Energy Services Inc. is a Calgary-based contract drilling and oilfield services company providing solutions for oil and gas wells across North America. Ensign operates one of the largest fleets of land drilling rigs in Canada with operations also in the United States. With over 40 years of expertise, Ensign serves exploration and production companies by leveraging advanced technologies and delivery capabilities. This article provides an in-depth overview of Ensign Energy’s operations, key offerings, financial performance and growth strategies.

Background

Ensign Energy has a long history tracing back to its founding in 1987 by Murray Edwards who aimed to build a leading well drilling and servicing company. It initially focused operations in Western Canada servicing clients like Husky Energy and BP Canada. Ensign acquired public listing two years later under the name Ensign Resource Service Group.

In the 1990s, Ensign expanded rapidly via acquisitions and investments in state-of-the-art drilling rigs. Notable company milestones include:

• Acquiring Challenger Drilling in 1993 establishing foothold in Northeast British Colombia
• Going public in 1996 trading on the TSX and raising growth capital
• Purchasing 12 automated drilling rigs in 1998 equipped with advanced hydraulic technology
• Acquiring Target Energy Services in 2004 growing well servicing capabilities

A major expansion came in 2006 when Ensign purchased over 70 conventional drilling rigs from Nabors Canada. This established the company as one of the largest land-based drilling fleets in Canada in terms of market share. Today, Ensign Energy employs around 2,500 people and operates 190+ rigs internationally.

Main Business Segments

Ensign operates via two primary oilfield services segments:

1. Contract Drilling Services: Owns and operates a modern fleet of 133 drilling rigs capable of drilling depths up to 5,000 meters. Flagship offering is the Automatic Drilling Rig (ADR) product line featuring automated pipe handling and drilling systems. Services include contract drilling, directional & horizontal drilling and supply of rig moving equipment & matting.
2. Well Servicing: Maintains a fleet of 63 well service rigs equipped with cutting-edge technology to improve performance and safety. Services include workovers & recompletions, decommissioning of old wells, installation & maintenance of artificial lift systems, well testing and optimized completions using wireline and casing inspection.

Within Canada, Ensign generates majority of its revenue from Alberta oilfields. Additional key geographies include the Rocky Mountain basins in the US as well as international presence in Latin America and the Middle East.

Proprietary Technologies

Ensign deploys several proprietary platforms and digital solutions to drive efficiency, reduce risk and lower emissions:

• CleansweepTM Mobiles provides combustion emission control technologies
• Enhanced geo-steering utilizes semi-automated directional drilling tools
• OrionTM telematics enables real-time fleet tracking and performance monitoring
• V-Analytics platform applies data-driven algorithms to optimize drilling parameters

The company also utilizes factories for modular rig components leveraging lean manufacturing techniques. Recently, Ensign added rapid deploy grids integrating natural gas generator sets to power drilling rigs thereby supporting energy transition.

Financial Performance

In 2021, Ensign generated annual revenues of CAD 535 million reflecting strong recovery from the pandemic demand contraction when revenues declined 30%. The rebound in oil prices since second half of 2020 revived exploration activity, driving higher utilization for Ensign’s services.

Adjusted EBITDA improved 73 percent to CAD 86 million in 2021 with expanding margins across operating divisions as activity increased. Positive industry tailwinds coupled with sustained focus on proprietary technologies and cost structure optimization provide Ensign multiple avenues to grow profitability.

Most of Ensign’s operations currently concentrate around the liquids-rich Cardium, Deep Basin and Duvernay plays in Alberta which offer resilient economics even during weaker commodity cycles. The company maintains a prudent capital structure with manageable debt obligations, untapped credit facilities and ample liquidity to fund growth.

Strategies for Growth

Despite volatility for energy markets, Ensign Energy sees attractive growth potential from increased customer budgets to drill new wells and boost lagging inventories. Key elements of Ensign’s strategy include:

• Expanding drilling automation, digital monitoring and emissions reduction technologies
• Growing market share in Canada by reactivating idled rigs as drill programs expand
• Enhancing integrated well services offerings across wider value chain
• Cross-selling expanded services portfolio to established customer accounts
• Seeking acquisitions that augment existing assets and provide synergies

In the medium term, Ensign sees upstream companies accelerating investments to replenish inventories and meet rising global demand. With over half of its drilling fleet working at high utilizations presently in Canada, Ensign expects multi-year tailwinds to drive significant capacity growth across operating divisions.

Conclusion

With a modern rig fleet, established customer base and innovative solutions, Ensign Energy seems strongly positioned for the next industry upcycle. The company’s strong technical expertise, execution track record in Western Canada basins, and integrated services model set it up strongly to benefit. Underpinned by its technology edge and focus on sustainable solutions, Ensign seems primed for continued growth in its next chapter.