PHX Energy Reports Record Quarterly Revenue and Third Consecutive Quarter of Record RSS Activity; Raises 2026 Capital Budget and Announces Preliminary 2027 Budget

Third Quarter Highlights * For the three-month period ended September 30, 2026, PHX Energy generated consolidated revenue of $204.2 million, which is 24 percent higher than the $164.3 million generated in the third quarter of 2025 and the highest level of quarterly revenue achieved in the Corporation’s history. For the third consecutive quarter, the Corporation achieved record Rotary Steerable Systems (“RSS”) activity which represented 20 percent of the Corporation’s consolidated activity (2025 – 13 percent). In the 2026 three-month period, PHX Energy’s consolidated operating days grew by 16 percent to 8,567 which is only 33 days short of the record activity achieved in the first quarter of 2025. Consolidated revenue in the 2026-quarter included $14.7 million of motor rental revenue (2025 - $12.5 million). * In the third quarter of 2026, adjusted EBITDA(()(1)) was $33.7 million, 16 percent of consolidated revenue(()(1)), an increase of 21 percent compared to $27.9 million, 17 percent of consolidated revenue, in the same 2025-quarter. In the 2026 three-month period, the Corporation incurred higher cash-settled share-based compensation expense of $3 million as compared to $0.8 million in the corresponding 2025-period. Adjusted EBITDA excluding cash-settled share-based compensation expense(()(1)) for the three-month period ended September 30, 2026 was $36.6 million, 18 percent of consolidated revenue(()(1)), as compared to $28.7 million, 17 percent of consolidated revenue(()(1)) in the same 2025-quarter. * Earnings in the 2026-quarter were $10.5 million, $0.23 per share, as compared to $8.5 million, $0.16 per share, in the same 2025-period. Higher earnings were primarily driven by strong revenue and activity, particularly RSS, which is a high-margin business for the Corporation. Earnings in the 2026-period included depreciation and amortization expenses for drilling and other equipment of $18 million (pre-tax) which increased by 10 percent when compared to $16.3 million (pre-tax) in the corresponding 2025-quarter. This increase is the result of ongoing fixed asset additions as well as $2.3 million in additional depreciation recognized in the 2026-quarter relating to a change in the estimated useful life of certain primary components of motors that became effective in the third quarter of 2025. * In the 2026-quarter, PHX Energy’s US division’s revenue was $141.7 million, an all-time record and 18 percent higher than the $120.2 million generated in the third quarter of 2025. The US division’s operating days grew by 14 percent while the average number of active horizontal and directional rigs per day in the US industry increased by 10 percent quarter-over-quarter. The US division achieved record RSS activity which represented 25 percent of the division’s operating days in the third quarter of 2026 (2025 - 20 percent). US division revenue in the 2026-quarter represented 69 percent of consolidated revenue (2025 - 73 percent). * PHX Energy’s Canadian division reported $62.5 million of quarterly revenue, a 42 percent increase compared to $44.1 million in the 2025-quarter and the highest level of quarterly revenue achieved by the division in the Corporation’s history. Record RSS activity drove this achievement, representing 13 percent of Canadian operating days in the 2026 three-month period (2025 – 4 percent). Quarter-over-quarter, the Canadian division reported an 18 percent increase in operating days, which is relatively in line with the 19 percent increase in industry drilling days. * The Corporation’s net capital expenditures(()(2)), which account for proceeds on disposition of drilling and other equipment, were $14.9 million for the 2026-quarter. For the three-month period ended September 30, 2026, PHX Energy spent $23.1 million in capital expenditures and proceeds on disposition of drilling and other equipment were $8.2 million. Proceeds on disposition of drilling and other equipment primarily relate to downhole equipment losses, for which operators compensate the Corporation at replacement cost. These reimbursements effectively fund the related capital expenditures, thereby reducing the need to finance such expenditures through operating cash flows or the Corporation’s credit facilities. * For the three-month period ended September 30, 2026, the Corporation generated excess cash flow(()(2)) of $11.6 million, after deducting net capital expenditures(()(2)) of $14.9 million (2025 - $12.6 million and $7.4 million, respectively). * On September 15, 2026, the Corporation declared a dividend of $0.20 per share or $9.2 million, payable on October 15, 2026, to shareholders of record on September 30, 2026. * As of September 30, 2026, the Corporation had CAD $58.9 million drawn on its Canadian credit facilities, nothing drawn on its US operating facility, and a cash balance of $18.8 million, resulting in net debt(()(2)) of $40.1 million (December 31, 2025 - $6.4 million). The amount drawn on Canadian credit facilities has decreased from $64.5 million as at June 30, 2026. The proceeds from loans and borrowings were primarily used to fund capital acquisitions, dividends, share-based payments, and working capital. The Corporation had CAD $50.7 million and USD $25 million available to be drawn from its credit facilities as at the end of the 2026-quarter. * As at September 30, 2026, the Corporation had a working capital(()(2)) of $128.6 million. Financial Highlights (Stated in thousands of dollars except per share amounts, percentages and shares outstanding)