Total Energy Rides Global Demand to Record Quarter, Navigating North American Headwinds

CALGARY, AB – May 12, 2026 – Total Energy Services Inc. today announced impressive first-quarter financial results, showcasing the power of a diversified global strategy that successfully navigated a challenging North American market. The Calgary-based company reported a 25% surge in revenue to $314.9 million and a 28% jump in net income to $24.2 million, largely fueled by booming international operations and record demand for its natural gas infrastructure services.

The strong performance underscores a pivotal moment for the energy services sector, where strategic focus on high-growth regions and specialized, in-demand segments is proving more critical than ever. While the company's North American drilling and rental divisions faced headwinds from cautious producers, stellar results from its Australian division and a massive backlog in its Compression and Process Services segment more than compensated, painting a picture of a company firing on multiple cylinders.

A Tale of Two Markets: Australia Booms While North America Pauses

The first quarter of 2026 highlighted a stark divergence in market conditions. Total Energy's Contract Drilling Services (CDS) and Well Servicing (WS) segments in Australia were standout performers. The company reaped the benefits of recent investments in upgraded equipment, with reactivated rigs commanding higher day rates and achieving significantly higher utilization. Australian drilling rig utilization jumped from 45% to 62% year-over-year, while well servicing utilization climbed from 45% to 54%. This surge in activity drove a 38% increase in operating days for the Australian drilling fleet.

This robust activity Down Under stood in sharp contrast to the landscape in Canada and the United States. Despite commodity prices being buoyed by geopolitical tensions, North American oil and gas producers have maintained a strategy of strict capital discipline. The focus remains on shareholder returns and operational efficiency rather than aggressive production growth. This industry-wide caution translated to an 18% decline in Canadian drilling days and a 20% drop in the U.S. for Total Energy's CDS segment.

The company's Rentals and Transportation Services (RTS) segment, which is heavily exposed to North American activity levels, saw its revenue decline by 15% to $19.5 million. The company noted that competitive market conditions and a high fixed-cost structure made it difficult to offset inflationary pressures. The results illustrate a broader market trend where, even with elevated oil prices, the North American rig count has not responded with the vigor of past cycles. Analysts suggest operators view the current price environment, influenced by conflicts in the Middle East, as potentially temporary and are therefore hesitant to commit to long-term drilling programs.

The Engine Room: A Record Backlog in Gas Compression

The undisputed star of Total Energy's Q1 report was its Compression and Process Services (CPS) segment. This division, which fabricates, sells, and rents crucial equipment for natural gas infrastructure, saw its revenue skyrocket by 55% to $164.6 million. More significantly, the segment ended the quarter with a record-breaking fabrication sales backlog of $446.9 million.

This backlog, which provides revenue visibility well into 2027, is a powerful indicator of the structural demand for natural gas. As North America and the world continue to build out LNG export facilities and related gas processing infrastructure, the need for custom-built compression and processing equipment has soared. Total Energy's results confirm it is a key beneficiary of this long-term energy transition trend. The strength in fabrication sales and parts and service activity drove the segment's EBITDA up by 39% to $21.8 million, even as it contended with lower revenue from its rental fleet following strategic asset sales in 2025.

To meet this surging demand, the company is investing in expanding its CPS fabrication capacity in the United States, a key part of its $87.4 million capital expenditure program for 2026. This proactive investment signals confidence that the demand for natural gas infrastructure will remain a core driver of growth for years to come.

Strategic Pruning and Smart Investments

Beyond capitalizing on growth markets, Total Energy's Q1 results also reflect a disciplined and strategic approach to capital allocation. A key move was the complete exit from the U.S. well servicing market. The company ceased operations in January 2026 and sold the associated equipment in February, a decision that immediately stanched operating losses in that division and contributed to a remarkable 110% increase in the overall Well Servicing segment's EBITDA. The sale also generated a $2.9 million gain, which helped offset a significant, non-cash share-based compensation expense tied to the company's soaring stock price.

This strategic pruning allows management to focus capital on higher-return opportunities. During the quarter, the company spent $20.7 million on capital projects, primarily directed at upgrading drilling and service rigs in Australia and Canada and the aforementioned expansion of its U.S. fabrication facilities. These investments are aimed at equipping the company with modern, high-efficiency assets—such as the AC electric triple pad drilling rig currently being upgraded in Canada—that are in high demand and command premium pricing.

While investing in growth, the company also strengthened its balance sheet and rewarded shareholders. It reduced its bank debt by $10.0 million and returned $6.5 million to investors through dividends and share repurchases. The company ended the quarter in an enviable financial position, with cash on hand exceeding bank debt by $46.4 million, providing substantial flexibility for future growth. Total Energy continues to evaluate several acquisition and equipment upgrade opportunities in North America and Australia and will pursue those which meet its investment criteria.