Total Energy Services (TOTZF)

Why Revenue Could Accelerate

1. 01Western Canadian drilling rig utilization rates - industry-wide utilization above 65% signals pricing power and margin expansion
2. 02WTI crude and AECO natural gas prices - $70+ WTI and $2.50+ AECO typically drive increased E&P activity and drilling budgets
3. 03Quarterly rig count and dayrate trends - sequential increases in active rigs and average dayrates indicate improving market conditions
4. 04Capital allocation decisions - dividend increases, share buybacks, or debt reduction signal management confidence and shareholder returns

TOTZF Chart

My Notes

• value - Stock trades at 0.7x P/S and 4.1x EV/EBITDA, well below historical averages…
• Moderate sensitivity through two channels: (1) Higher rates increase financing costs for E&P customers…
• Watch on earnings: WTI crude oil spot price - $65-70/bbl appears to be breakeven threshold for increased Canadian drilling activity, AECO natural gas price - Canadian gas pricing drives Montney and Duvernay drilling programs that utilize Total's rigs, Canadian Association of Energy Contractors (CAOEC) weekly rig count - leading indicator of industry activity and utilization trends.