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1. Company Snapshot

1.a. Company Description

PHX Energy Services Corp.provides horizontal and directional drilling technology and services to oil and natural gas exploration and development, and production companies in Canada, the United States, Russia, Albania, and the Middle East.It offers Velocity Real-Time System, a ground-breaking technology that offers downhole guidance systems; Atlas Motors, a high-performance drilling motors; PowerDrive Orbit RSS, a rotary steerable system; P-360 Positive Pulse MWD System, a measurement while drilling (MWD) tool; and E-360 EM MWD System, an MWD tool that transmits electric signals through geological formations.


The company also provides 360 CV MWD System, a clear vision tool, which surveys inclination and gamma in real-time closer to the bit; 360 RWD System, a resistivity while drilling sub; and North Seeking Gyro that offers real-time QA/QC checks downhole, as well as performance drilling motors.In addition, it provides survey management, gyro surveying, and directional drilling and motor rentals.The company was formerly known as Phoenix Technology Income Fund and changed its name to PHX Energy Services Corp.


PHX Energy Services Corp.was founded in 1995 and is headquartered in Calgary, Canada.

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1.b. Last Insights on PHX

PHX Energy Services Corp.'s recent performance was negatively impacted by weak statutory earnings, which may not fully reflect the company's financial health. Despite a 17% revenue growth in Q1 2025 to CA$193.7m, and a record second-quarter revenue of $167.7m, the company's earnings report raised concerns. Additionally, escalating costs and potential margin pressures may be affecting profitability. However, the company's quarterly dividend of $0.20 per share, declared in June, may support shareholder returns. (Source: Globe Newswire)

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Individual investors account for 50% of PHX Energy Services Corp.'s (TSE:PHX) ownership, while institutions account for 30%

Dec -03

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Is Stronger Sales but Softer Earnings Shifting the Investment Case for PHX Energy Services (TSX:PHX)?

Nov -13

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PHX Energy Services (TSX:PHX) Margin Decline Challenges Bullish Value Narrative Despite Strong Earnings Growth

Nov -06

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PHX Energy Announces Third Quarter Results & 2026 Capital Expenditure Budget

Nov -04

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PHX Energy Services Corp. (TSE:PHX) Stock Has Shown Weakness Lately But Financials Look Strong: Should Prospective Shareholders Make The Leap?

Sep -23

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PHX Energy Services Corp. Announces Quarterly Dividend

Sep -15

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Presenting on Emerging Growth Conference 85 Day 2 on August 21; Register to live stream

Aug -20

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Why PHX Energy Services' (TSE:PHX) Soft Earnings Are Just The Beginning Of Its Problems

Aug -14

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.44%)

6. Segments

Directional Drilling Services

Expected Growth: 2.5%

The 2.5% growth in Directional Drilling Services from PHX Energy Services Corp. is driven by increasing demand for precise drilling technologies, rising oil prices, and growing exploration activities in unconventional plays. Additionally, PHX's expanded fleet and strategic partnerships contribute to the growth, as operators seek efficient and cost-effective drilling solutions.

Motor Rental

Expected Growth: 1.8%

The 1.8% growth in Motor Rental from PHX Energy Services Corp. is driven by increasing demand for oil and gas exploration, rising energy prices, and growing need for efficient drilling operations. Additionally, PHX's strategic expansion into new markets and investments in technology upgrades have contributed to the segment's growth.

Motor Equipment and Parts

Expected Growth: 2.2%

The 2.2% growth in Motor Equipment and Parts from PHX Energy Services Corp. is driven by increasing demand for drilling and completion activities, supported by rising oil prices and growing E&P capital expenditures. Additionally, the company's focus on innovative products and services, such as its proprietary drilling motors, is contributing to market share gains.

7. Detailed Products

Directional Drilling Services

PHX Energy provides directional drilling services to help operators navigate complex wellbore trajectories and reach their target zones efficiently.

Measurement-While-Drilling (MWD) Services

PHX Energy's MWD services provide real-time data on drilling parameters, enabling operators to make informed decisions and optimize their drilling operations.

Logging-While-Drilling (LWD) Services

PHX Energy's LWD services provide high-quality, real-time logging data, enabling operators to make informed decisions about their drilling operations.

Mud Motor Services

PHX Energy's mud motor services provide a reliable and efficient way to drill complex wellbores, improving drilling efficiency and reducing costs.

Drilling Optimization Services

PHX Energy's drilling optimization services provide operators with expert analysis and recommendations to optimize their drilling operations and improve efficiency.

Wellbore Placement Services

PHX Energy's wellbore placement services provide operators with accurate and reliable wellbore placement, enabling them to reach their target zones efficiently.

8. PHX Energy Services Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for PHX Energy Services Corp. is medium due to the availability of alternative energy sources and services.

Bargaining Power Of Customers

The bargaining power of customers for PHX Energy Services Corp. is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for PHX Energy Services Corp. is medium due to the moderate level of supplier concentration and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for PHX Energy Services Corp. is high due to the relatively low barriers to entry and the attractiveness of the energy services market.

Intensity Of Rivalry

The intensity of rivalry for PHX Energy Services Corp. is high due to the high level of competition in the energy services market and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.89%
Debt Cost 10.96%
Equity Weight 95.11%
Equity Cost 15.74%
WACC 15.51%
Leverage 5.14%

11. Quality Control: PHX Energy Services Corp. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PHX Energy

A-Score: 7.0/10

Value: 8.7

Growth: 7.2

Quality: 5.9

Yield: 10.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Natural Resource Partners

A-Score: 6.8/10

Value: 4.2

Growth: 5.6

Quality: 7.7

Yield: 9.0

Momentum: 6.5

Volatility: 8.0

1-Year Total Return ->

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Dorian LPG

A-Score: 5.7/10

Value: 5.2

Growth: 6.8

Quality: 5.5

Yield: 10.0

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Precision Drilling

A-Score: 5.0/10

Value: 8.5

Growth: 6.6

Quality: 5.6

Yield: 0.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Borr Drilling

A-Score: 4.4/10

Value: 8.6

Growth: 8.2

Quality: 4.6

Yield: 2.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Ensign Energy Services

A-Score: 4.2/10

Value: 9.3

Growth: 4.9

Quality: 3.0

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.35$

Current Price

7.68$

Potential

-30.40%

Expected Cash-Flows