Canada’s oilpatch drillers and well service companies are heading into the final stretch of the year with busier rigs, firmer pricing and stronger balance sheets. So far, third-quarter results and a bullish call from analysts both suggest the industry is on its best footing in years. Precision Drilling Corp. and Trican Well Service Ltd., two of the country’s largest service providers, reported higher revenue and profit on Tuesday, citing rising activity in Western Canada. Precision chief executive Carey Ford said his company is entering what could be “one of our busiest winter drilling seasons in years,” with its fleets expected to run near full capacity. Canada’s biggest oil companies, including Cenovus Energy Inc. and Tourmaline Oil Corp., are among Precision’s core customer base. The company raised its 2026 capital budget to $285 million. The increase covers long-lead equipment and a pending upgrade deal that would keep several rigs under contract with a large Canadian producer through 2029. Their results came just days after ATB Cormark Capital Markets told investors the sector faces its most favourable set-up in years and recommended an overweight position in Canadian energy services. ATB Cormark analyst Tim Monachello said financial markets predict elevated oil prices into late 2029, giving producers support to drill at a steadily growing pace. The provincially owned bank’s fall energy survey found more Canadian service companies reporting more excess demand than excess capacity for the first time in four years, led by drilling contractors. Forty-three per cent of respondents said margins had risen over the previous three months, compared with 24 per cent reporting declines. Close to 60 per cent expected further gains over the next six months, according to the survey conducted in the last two weeks of September. Drilling activity backs that up. In Canada, an average of 200 rigs were actively drilling for oil and gas from July to September, among the largest fleets the industry has seen for the third quarter in years. Monachello now expects Canadian drilling to continue growing by single digits this year and in 2027. In the most recent quarter, Precision experienced a lift on both sides of the border. The Calgary-based driller’s revenue rose 15 per cent to $532 million. The company swung to a $21-million profit from a $7-million loss a year earlier. The results, however, fell slightly short of ATB Cormark’s forecasts of $537 million in revenue, as the cost of restarting idle U.S. rigs and weaker international margins weighed on the quarter. Precision averaged 73 active rigs in Canada, up 16 per cent, and 43 in the U.S., up 19 per cent, outpacing overall U.S. activity. Trican, meanwhile, posted a sharper improvement. The pressure pumper earned $48 million, up from $28.9 million a year earlier. The company credited higher activity, more time doing active work and a full quarter’s contribution from its acquisition of Iron Horse Energy Services. Free cash flow nearly doubled to $66 million. Trican struck an optimistic tone on the oilfield service market’s outlook. It said customer activity should stay supported by strong economics in the Montney and Duvernay plays of B.C. and Alberta and by a growing demand for natural gas. The company also warned that competition could cause short-term swings in the degree to which crews are actively working and pricing, arguing that well counts understate how busy the oilfield has become. That’s because producers are drilling longer laterals and pumping more sand per well, so each well needs more fracturing, coiled tubing and cementing work than before. Ottawa may add another push. In September, the federal government released draft legislation for the Canadian Productivity Mega Deduction. It would let producers write off 100 per cent of Canadian development expenses in the first year rather than over several years. The legislation would also allow service companies to deduct spending on fleet upgrades and heavy equipment. Monachello named Trican, Precision, Total Energy Services Inc. and CES Energy Solutions Corp. as the most direct beneficiaries. Longer term, both Monachello and the companies point to export capacity as the industry’s biggest long-term driver of growth. “In Canada, the energy sector could be entering a multi-year expansion phase driven by major crude and LNG egress initiatives,” wrote Monachello. He cited confirmed and proposed projects to ship more liquefied natural gas from the B.C. coast, and new crude pipe proposals. The oilfield services sector is also in far better financial shape than in past years. Companies are returning more cash to shareholders. Trican bought back $41.8 million of its stock in the quarter and has retired roughly half of its shares since 2017. Canada, an energy superpower: No longer a pipe dreamAlberta's oilpatch dealmaking boom continues as Ovintiv buys Logan Energy for $1.26 billion Precision repurchased $31 million and said its long-term debt target is nearly within reach, freeing more cash for shareholders next year. Risks, however, remain. Crude prices are widely expected to drift lower over the medium term, and Trican noted that producers remain focused on balancing growth with debt reduction and payouts. Precision’s international business also softened during the quarter. • Email: jarose@postmedia.com