Ensign Complements Its Permian Exposure with Citadel Acquisition

Research evidence excerpt

Ensign Complements Its Permian Exposure with Citadel Acquisition

Energy Services

Ensign Energy Services Inc.

TD SECURITIES INC. - CANADA QUICK TAKE: COMPANY UPDATE

July 21, 2026

Price: C$3.68 (07/21/2026) Ensign Complements Its Permian Exposure

Price Target: C$3.50 with Citadel Acquisition

HOLD (2)

Aaron MacNeil, CA^ THE TD COWEN INSIGHT

403 292 1222

With the transaction likely well below replacement cost, we expect that the Citadel assets are

aaron.macneil@tdsecurities.com

either not fully utilized and/or are producing sub-scale margin performance. With 22 Ensign

Mark Newson, CFA^ rigs currently active in the Permian and the Company's positive track record as a consolidator,

403 299 3207 we have an initially positive view, noting that many transaction details are outstanding.

mark.newson@tdsecurities.com

Maintain HOLD.

Ben Fullarton^

416 308 8209 Event: Ensign has entered into an agreement to acquire all outstanding shares of Citadel

ben.fullarton@tdsecurities.com Drilling.

Key Data Impact: POSITIVE

Symbol TSX: ESI-T

Market Cap C$678.4MM Transaction Details: With the Citadel transaction, Ensign will acquire six high-spec land

drilling rigs, associated management and technical crews, and a portfolio of managed-

pressure-drilling packages with engineering support operated through Opla Energy Services.

Total consideration for the transaction is US$65 million and will be funded with cash on hand

and available credit facilities. The transaction is subject to certain closing conditions.

Deal Metrics Limited: While not explicitly stated, we believe that total consideration is well

below replacement cost. Ensign did not disclose the profitability of the Citadel platform, and

therefore we are not able to calculate if the deal will be accretive/dilutive.