You’ve probably seen the headlines about the "rig count recession" in the U.S. or the fluctuating price of WTI crude. It’s easy to look at a chart for precision drilling corp stock and see a rollercoaster. But if you’re only looking at the daily price action on the NYSE or TSX, you’re basically missing the forest for the trees. Honestly, Precision Drilling is currently one of the most misunderstood plays in the energy service sector.
Most people think of drilling companies as simple proxies for oil prices. Oil goes up, rigs go out. Oil goes down, rigs come home. It’s not that simple anymore. Precision (PDS) has spent the last few years aggressively reinventing itself into a high-tech, debt-slaying machine.
The Debt Deception and Why It Matters Now
For a decade, the massive debt load was the dark cloud over this company. It felt like they were running on a treadmill just to pay interest. But something shifted in 2025. By the end of December 2025, Precision hit its debt reduction target for the year, paying down over $100 million. They’ve now cut their debt by a staggering $535 million over the last four years.
Why should you care about a balance sheet?
Because as of January 2026, their annual interest expense has dropped to roughly $34 million. Compare that to 2016, when they were burning $104 million just on interest. That is $70 million in "found" money that now flows toward shareholders instead of bankers.
The market hasn't fully priced in this fundamental shift in the capital structure.
What’s Actually Happening in the Field?
The North American rig count looks a bit depressing on paper. As of January 9, 2026, the U.S. rig count fell to 544, down about 7% year-over-year. You’d think that would be a death sentence for precision drilling corp stock.
It isn't.
Precision’s "Super Series" rigs—their high-spec, automated AC triples—are seeing a massive divergence from the rest of the market. While the total number of active rigs in the industry is down, the demand for these specific, high-tech rigs is actually up. Producers aren't just looking for a hole in the ground; they want the Alpha™ automation platform and the EverGreen™ environmental suite to hit their ESG targets and drilling efficiencies.
In Canada, the winter drilling season is currently in full swing. Precision expects activity levels to meet or even exceed the 2025 winter season, with margins holding steady between $14,000 and $15,000 per day. In the U.S., they are averaging around 37 to 40 active rigs. That’s a respectable slice of the market share when you consider how much more efficient these rigs have become.
The International "Secret"
While everyone stares at the Permian Basin, Precision is quietly printing money in the Middle East. They’ve got seven rigs locked in on long-term contracts in Saudi Arabia and Kuwait. These aren't the month-to-month "spot" contracts you see in the U.S. These are stable, multi-year deals that provide a floor for their cash flow.
If the U.S. market softens further in 2026, these international contracts act as a vital shock absorber.
Misconceptions About the Earnings Miss
In October 2025, the company reported a third-quarter earnings miss that sent some algorithmic traders running. They posted an EPS of -$0.37 (USD) when analysts wanted to see a profit. People freaked out.
But if you actually read the report, the "miss" was largely due to non-cash asset charges and seasonal timing in Canada. They decommissioned 31 older rigs in Q4 2025 to focus entirely on the high-margin Super Series fleet. That’s a one-time accounting hit, not an operational failure.
The real story was the $76 million they returned to shareholders in 2025 via buybacks. They’ve reduced their share count by about 6% in just one year. When you have fewer shares and rising free cash flow, the "per share" value starts to jump exponentially.
What to Watch for in February 2026
The next big catalyst is February 11, 2026. That’s when Precision releases its full-year 2025 results. Analysts are currently projecting an EPS of around $1.01 for the fourth quarter.
Keep an eye on three specific things:
- The Buyback Target: Management hinted at increasing the percentage of free cash flow returned to shareholders. If they move that range above the current 35-45% bracket, the stock could see a significant re-rating.
- Natural Gas Activity: While oil rigs have been sliding, gas rigs in the Haynesville and Marcellus have shown resilience. Precision is heavily leveraged to these plays.
- The $700 Million Goal: They are still aiming to repay $700 million in total debt by 2027. If they accelerate this timeline, the "risk premium" on the stock should evaporate.
Practical Steps for Investors
If you're looking at precision drilling corp stock, don't just trade the oil price. You're buying a technology and debt-reduction story.
Start by monitoring the weekly Baker Hughes rig count, but focus specifically on the "horizontal" and "gas" rig numbers rather than the total. Those are the rigs Precision actually operates. Secondly, check the spread between WTI and Western Canadian Select (WCS). A narrow spread usually means more activity in Precision’s home turf of Alberta.
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Lastly, watch the $99 (CAD) price target set by several analysts. As of mid-January 2026, the stock has been bumping up against 52-week highs. If it breaks through $100 on the TSX with strong volume following the February earnings call, the momentum could carry it much higher as the debt-reduction story finally goes mainstream.
Actionable Insights:
- Monitor the February 11, 2026 earnings release for any update to the 2026 capital allocation plan.
- Compare the "Super Series" rig utilization rates against the general industry decline; outperformance here is the key to margin expansion.
- Watch for debt-to-EBITDA ratios dropping below 1.0x, which would likely trigger a credit rating upgrade and lower future borrowing costs.