Current fundamentals underlying the energy sector are the best that Kevin Neveu, president and chief executive officer of Precision Drilling Corporation, has seen in his career.

“With our fleet of super-series rigs in very high demand, we believe the outlook for our business is excellent, with both rising activity and rapidly-improving prices,” he told the company’s recent annual general meeting. For its part, Precision has increased its 2022 capital spending plan to $125 million in anticipation of higher activity and additional contracted rig upgrades, Neveu noted as part of the company’s earlier Q1 results.

Precision will split this year’s spending $113 million in the contract drilling services segment, $11 million in the completion and production services segment and $1 million to the corporate segment.

In terms of other oilfield services companies, STEP Energy Services Ltd.’s board has approved a $8.3-million boost to its 2022 capital program (to $56 million), with added capital funding to further investment into low emissions-focused equipment upgrades that support ESG objectives and additional maintenance capital to support operations.

SECURE Energy Services Inc. expects sustaining capital in 2022 to be $55 million, including capital spending related to landfill expansions of $15 million. The company expects to incur about $45 million of growth capital this year, focused on projects containing long-term agreements and tying into existing infrastructure strategically aligned with customer needs “as we both reduce costs and lower emissions,” the company stated in its Q1 results.

In direct response to higher customer demand, the Total Energy Services Inc. board has approved a $16 million increase to its 2022 capital budget — to $42.1 million — with $13 million of the increase directed towards equipment recertifications and upgrades and the purchase of new drill pipe, and the remainder earmarked for compression rental fleet additions. Total will fund the remaining $30.5 million of its 2022 capital budget with cash on hand and cash flow.

PHX Energy Services Corp. is lifting its 2022 capital spending budget to be $85 million, with the $37.3 million increase to be allocated toward purchasing up to 100 Atlas motors, 30 Velocity kits and additional PowerDrive Orbit RSS for delivery late in 2022 and into 2023. The company intends to equip its North American operations with more premium equipment to capture market share next year.

Dividend returns

Total Energy Services Inc.’s board has reinstated a quarterly dividend to shareholders, declaring a dividend of six cents per common share for the quarter ended June 30 on outstanding common shares.

In 2020, Total made the “difficult decision” to suspend its dividend, in part, to ensure the company had available finances to handle whatever challenges came about during the COVID-19 downturn. As it turned out, president and CEO Daniel Halyk told the Q1 results conference call, Total made it through a “very tough time” quite well, paying off debt in the process and shifting more towards share buybacks.

“What we won’t do is over-invest in our business and drive subpar returns,” he said, adding dividends are part of giving money back to owners. Share buybacks are also key. “I don’t have any strong inclination to anything, other than to say that we’re entrusted to take our owners’ capital and deploy it. We won’t do that on subpar investments.”

Mike Maguire, chief executive officer of High Arctic Energy Services Inc., stated in his company’s Q1 results release that “macro-market conditions” and business fundamentals support a positive outlook during the back half of this year, and the company has made the first payment under its reinstated dividend.

He said: “High Arctic built on its strong 2021 closing position this quarter, continuing the trend of increasing revenue and earnings, and coupled this with raises to contract pricing.”

Meanwhile, Neveu told Precision’s AGM that his company remains focused on its bottom line. “We are committed to generating strong and sustainable returns for our investors by scaling Precision’s Evergreen environmental solutions, our Alpha digital technologies, maximizing our operating leverage to generate free cash flow, and strengthening our balance sheet by reducing our debt levels while also returning capital to shareholders.”