Business
Archer : Q3 2025 Presentation
Archer : Q3 2025
About this update from Archer Limited
Archer Q3 2025 Trading Update 4 November 2025 Revenue EBITDA CAGR +11% Land Drilling Well Services Renewable Services Platform Operations Our products & services $m $m 1,169 1,301 1,300-1,350 970 CAGR +21% 135 145-155 117 86 '22 '23 '24 '25G '22 '23 '24 '25G Cash contribution Leverage ratio $m CAGR +20% 90-110 56 64 73 5.3x 2.9x 2.6x 2.2x-2.5x '22 '23 '24 '25G '22 '23 '24 '25G EBITDA - Capex Reported NIBD/adj. EBITDA Revenue ($m) EBITDA ($m) Q3 Highlights - continued growth Revenue of $339.3 million, up 1% YOY Adjusted EBITDA of $40.2 million, up 11% YOY EBITDA of $38.4 million, up 10% YOY Distribution to shareholders of $5.5 million in Q3 Acquired Premium Oilfield Services 350 300 250 200 150 100 50 0 +1% 335 339 283 294 Q3-24 Q3-25 40 +10% 38.4 34.9 35 30 25 20 15 10 5 0 Q3-24 Q3-25 Raised $20m in private placement to fund acquisition Reimbursable Operational revenue LTM Adj. EBITDA ($m) LTM EBITDA ($m) Subsequent events Approved $6.1m distribution to be paid to shareholders in Q4 1 180 160 140 120 100 80 60 40 20 0 Q3-24 Q3-25 180 +21% 163.6 134.9 160 140 120 100 80 60 40 20 0 +13% 146.3 129.5 Q3-24 Q3-25 Archer's EBITDA remains resilient throughout the market cycles Robust historical EBITDA Strong YoY-growth relative to peers 1 +10% +11% -14% EBITDA YTD ('25 vs. '24) -16% EBITDA Q3 (Q3 '25 vs. Q3 '24) Peers Peers EBITDA Margin 135 10% 117 11% 9% 10% 10% 8% 95 9% 85 9% 86 7% 73 76 55 145-155 '17 '18 '19 '20 '21 '22 '23 '24 '25G 1 Average reported adj. EBITDA of Halliburton, Weatherford, Baker Hughes OFSE segment, SLB, Expro. Archer to distribute $6.1 million to shareholders in Q4 (~11% yield) Q4 cash distribution Archer with industry leading direct yield Shareholder program yields in industry 1 Payout per share: NOK 0.62 per share Total distribution: Approx. $6.1 million Payment date : On or around 14 th of November ~11% ~11% Share buybacks ~9% ~7% ~4% ~4% ~3% ~3% Dividends and cash distribution Planned frequency: Quarterly Archer's announced shareholder return program initiated with distributions of about $5.5million in Q2 and Q3 $6.1 million approved for shareholders distribution in Q4 Target to increase cash distribution to shareholders over time, in line with growth in earnings Archer Peer 1 Peer 2 Peer 3 Peer 5 Peer 4 Peer 7 Peer 6 1 Per 31.10.25 . Yield of US-based peers based on forward annual dividend yield plus share buyback yield, as reported by Morningstar. Peer sample include Odfjell Technology, SLB, Halliburton, Weatherford, H&P, Baker Hughes, Expro. Acquired a complimentary well services business in the growing Gulf of America Premium Oilfield Services description Growing P&A market in the Gulf of America Well-established service company within fishing and P&A related services, focused on the Gulf of America Solid reputation and long customer relations with major operators, complimentary to Archer client base Experienced team of about 80 employees Large and well-maintained equipment portfolio Material cost and capex synergies to be realized post-acquisition Offshore decom expenditures in deepwater Gulf of America ($bn) 1 >3x 5.0 3.5 2.6 1.5 2020-24 2025-29 2030-34 2035-39 Midland (TX) operating facility New Iberia (LA) headquarters and operating facility Permian Basin Winnie (TX) operating facility Gulf of America Gulf Coast onshore Shelf Deepwater Offshore decom commitments by operator, in deepwater Gulf of America (2025-39) 1 22% 21% 15% 12% 8% 7% 2% 13% Archer and Premium clients together account for more than 80% of the ~$15bn decom and P&A commitments in the deepwater Gulf of America to 2039 Archer or Premium client 1 Deepwater and ultra-deepwater in the Gulf of America as defined by Rystad (water depth > 125m). Decommissioning expenditures are the actual expected expenditures of decommissioning a project within a specified year, Accretive acquisition to strengthen Archer's EBITDA and cash flow Key investment attributes 1 Impact on pro forma key metrics 1 EBITDA and cash contribution to increase by about 5% and 8-10% respectively I EBITDA PF '25E Accretive acquisition of ~2.5x EV/EBITDA +5% II Payback period of around ~2 years III Archer 'as-is' With Premium Equipment purchased at discount compared to estimated replacement value of $35-40m IV Cash Contribution PF '25E Acquisition supports increased shareholder distribution and deleveraging over time +8-10% V Archer 'as-is' With Premium Strong demand in recent equity transaction Private placement and secondary sale Share ownership before and after transaction Free float Free float Paratus 69.4% 23.8% 54.7% 30.6% Hemen Hemen 21.5% Post-transaction Pre-transaction $69m $20m $49m Private placement Secondary sale (Paratus) Total transaction Successful transaction Strong commitment from main shareholders Broader investor base Enhanced free float and liquidity Legacy shareholder Paratus exited through the secondary sale process, with its main shareholders Hemen Holding and Lodbrok Capital subscribing for Archer shares directly Hemen Holding increased direct ownership from 21.5% to 30.6%, continuing the long-term support to Archer Strong commitment from existing investors Free float increased from 55% to 69% Financials Total revenue flat from previous quarter, operational revenue up $17 million related to high activity for platform drilling EBITDA of $17.6 million is $0.9 million down from previous quarter, and up $1.3 million from the same quarter last year. The strong EBITDA results in Q2 and Q3 is linked to the modular drilling rigs activity Operations Platform Drilling had a quarter of high activity and strong performance Successful start up of P&A operations for our lighter P&A unit in Norway 10 Equinor's pending sale to Prio of the Peregrino field could impact our drilling contract for two platforms in Brazil in 2026 Platform Operations Revenues ($m) EBITDA ($m) 180 160 140 120 100 80 60 40 20 0 25 155 158 158 137 131 20 +14% 15 123 105 104 119 136 10 5 0 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Reimbursable revenue EBITDA (right axis) Operational revenue Platform Drilling contracted rigs [# of rigs] 40 35 30 25 20 15 10 5 0 33 31 31 31 31 1 1 1 1 1 11 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Maintenance mode rigs Active P&A units Active drilling rigs 11 12 11 12 Financials Revenue of $89.1 million, is 11% higher than Q3 2024, and a 7% increase from previous quarter on the back of higher reimbursable revenue EBITDA of $14.0 million represents a 19% increase compared to same period last year and a $1.1 million reduction from previous quarter. EBITDA margin excl. reimbursable revenue of 20.5 % vs 19.2% same quarter last year Operations High activity across service lines in Norway UK recorded weaker results on the back of historic low drilling and intervention activity 11 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 US activity remain muted Well Services Revenues ($m) EBITDA ($m) 105 100 95 +11% 16 95 15 90 85 89 14 86 86 83 83 13 80 75 70 80 76 75 12 69 71 11 65 60 55 50 45 40 35 30 25 20 15 10 5 0 65 65 62 63 10 59 9 52 8 7 6 69 61 63 62 68 66 68 68 5 60 61 51 49 51 4 43 41 41 45 3 2 1 0 Reimbursable revenue Operational revenue EBITDA Financials Revenue in the quarter of $62.7 million reflects the reduced activity in the south of Argentina EBITDA of $4.9m reflects activity after right-sizing of the organization following the reduced operations in the south of Argentina Adjusted EBITDA of $5.7 million, is down from $9.9 million last year, based on reduction in drilling activity Operations Overall rig count in Argentina is down by 27% since January 2025 1 . We expect drilling activity to be flat throughout 2025 and to increase in 2026 PAE renewed two drilling contracts in Vaca Muerta for an additional period of two years 12 1 Baker Hughes rig count per October report Land Drilling Revenues ($m) 120 EBITDA ($m) 12 102.5 100 99.2 100.8 10 80 73.0 8 62.7 60 6 40 4 20 2 0 0 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Operational revenue EBITDA (right axis) Number of active Archer rigs 45 40 35 30 25 20 15 10 5 0 43 43 41 32 30 11 10 9 7 Q3-24 Q4-24 Q1-25 Q2-25 6 Q3-25 Workover & Pulling units Drilling rigs Renewable Services Revenues ($m) EBITDA ($m) Financials Revenue in the quarter of $33.4 million is in-line with previous quarter 35 30 25 20 15 14.0 10 5 0 22.5 33.9 33.4 5 4 3 2 1 0 EBITDA in the quarter of $4.5 million, up from $3.0 million reported last quarter Strong results in geothermal partly offset by losses incurred in floating offshore wind segment Q4-24 Q1-25 Q2-25 Q3-25 Operational revenue EBITDA (right axis) Operations High activity and utilization of rigs in geothermal segment High seasonal activity for wind and offshore services in Vertikal 13 Fabrication of floating substructure for Total is delayed and will likely be finalized in H1 2026 Key takeaways Continued strong EBITDA growth Acquired Premium Oilfield Services in the US Raising $20m in private placement Cash distribution to shareholders at ~11% yield 14 Appendix Strong rationale to acquire Premium Oilfield Services Becoming the clear market leader in fishing in the GoA Strong customer coverage with major operators, complimentary to Archer client base Strategic rationale Material cost and capex synergy savings Well-maintained excess fishing equipment purchased at a discount Expanding offering to deepwater pipe recovery services and proprietary whipstocks Accretive transaction in line with prior acquisitions Successful track record of accretive acquisitions Premium acquisition to contribute strongly for further value creation Archer maintain focus on value-creative M&A initiatives Acquisitions last years 1 Premium acquisition M&A focus areas ~3.0x EV / EBITDA (avg.) 2 ~$90m ~$30m Total investments LTM EBITDA ~2.5x EV / EBITDA (incl.synergies) $20m Deferred payment ~$8m Cost synergies EBITDA Premium EV PF '25E EBITDA (incl.synergies) Continued growth in EBITDA and cash flow Synergetic bolt-on acquisitions Accretive and value creative M&A Further strengthen well service offering 1 Includes acquisitions of Iceland Drilling (60%), Romar-Abrado, Baker Hughes Coiled Tubing (UK), ADA Argentina, Vertikal Service (65%), Archer Wind, and WFR. Key financials Reimbursable Operational revenue 350 300 250 200 Revenue [$m] EBITDA [$m] 349 335 343 349 339 284 289 295 295 294 38.1 38.4 36.2 34.9 33.5 40 38 36 34 32 30 28 26 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 NIBD [$m] CAPEX [$m] Prepaid debt fees NIBD 20 18.2 18.1 15.1 13.2 10.7 443 433* 433 385 382 426 435 425 366 364 450 15 400 10 350 5 * Increase in NIBD driven by make-whole fee on old bond and fees related to refinancing 300 Q3 24 Q4 24 Q1 25* Q2 25 Q3 25 0 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Archer's capital allocation strategy Balance sheet Capex M&A Shareholder returns Strong balance sheet and healthy debt levels Capex maintained at moderate levels Selective accretive bolt-on acquisitions Shareholder returns Target a long-term leverage ratio of 1.5-2.0x Maintain solid liquidity at all times Aim to reduce overall cost of capital in the long-term Targeting total capex of 3-4% of revenue over time Focus on growth investments with high financial returns (30-50%) Self-funded capex program in Argentina Disciplined strategy, with selective accretive M&A Targeting synergetic and cash generating bolt-on acquisitions with high financial returns (30-50%) Regular and sustainable shareholder return program Quarterly cash distributions of $5.5m in Q2 and Q3 '25 Target to increase cash distributions over time, in line with growth in earnings Attention : This is an excerpt of the original content. 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