Secure Waste Infrastructure Corp.

Good morning, ladies and gentlemen, and welcome to the SecureWave Infrastructure Corp Q3 2025 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, October 30, 2025. And I would now like to turn the conference over to Ms. Alison Prokop, Thank you. Please go ahead.

Thank you, and good morning to everyone who is listening to the call. Welcome to Secure's conference call for the third quarter of 2025. Joining me on the call today is Alan Branch, our President and Chief Executive Officer, Chad Magus, our Chief Financial Officer, and Corey Hyam, our Chief Operating Officer. We will be making forward-looking statements during this call. These statements reflect current expectations and are subject to a number of risks and uncertainties. Actual results could differ materially. We will also refer to certain non-GAAP financial measures, which may not be directly comparable to similar measures disclosed by other companies. Please refer to our continuous disclosure documents on CDAR Plus for more information on risk factors and definitions. Today, we will review our financial and operational results for the three and nine months ended September 30th, 2025. I'll now turn the call over to Alan.

Good morning, and thank you for joining today's call. SECURE delivered another strong quarter demonstrating the resilience of our infrastructure-backed business. Our core waste and energy infrastructure network performed largely in line with expectations, and it continues to highlight the strength and the stability of our cash flows, even amid lower oil prices and disciplined producer spending. Adjusted EBITDA for the third quarter was $135 million, up 6% year-over-year or 17% higher on a per-share basis. Canadian producers continue to approach the current environment with caution, maintaining discipline and spending, maintain discipline spending and stable production. Our business directly benefits from their ongoing need to reliable waste management and energy infrastructure solutions. Approximately 80% of our adjusted EBITDA is derived from reoccurring production and industrial activity, while only 20% is linked to drilling and completions, underscoring our ability to generate stable cash flows across lower market cycles. This resiliency, combined with disciplined execution, gives us confidence in our ability to maintain strong free cash flow and balance sheet flexibility. We did, however, experience continued weakness in our metal recycling business, particularly with the Ferris market. Conditions remain challenging due to soft Canadian demand driven by tariffs on finished steel sold into the US. Foreign oversupply and broader macroeconomic caution that is limiting new steel production. These factors have reduced domestic sales and led to a buildup of Ferris inventory. We have now redirected 95% of our shipments to stronger U.S. markets where scrap metal remains exempt from tariffs, though the full financial benefit may be realized into 2026 as our inventory turns per month improve with our rail capacity expansion in Q4. As a result of lower drilling and completion activity stemming from weakening of the benchmark oil prices, together with the near-term headwinds in metal recycling, we are revising our 2025 adjusted EBITDA guidance to approximately $500 million. This reflects a 2% reduction from the low end of our prior range. Compared to the initial guidance provided last December, this decrease reflects the delayed fairness Metal failed as described, the weaker macro environment, as well as the decision not to proceed with a small acquisition originally anticipated to contribute roughly $6 million of EBITDA this year. Importantly, our revised 2025 adjusted EBITDA guidance represents approximately 5% growth over pro forma 2024 adjusted EBITDA. This demonstrates continued year-over-year improvement despite a softer macroeconomic environment, and it highlights the strength and resilience of the business. Looking ahead, we expect to enter 2026 with strong operational momentum and the benefit of several long-cycle projects nearing completion. Our infrastructure growth program remains on track with $97 million of our $125 billion capital budget deployed in the first nine months of the year. The two major projects we've advanced this year, both pipeline-connected produced water disposal facilities in the Alberta-Montney region, are progressing on schedule. Each project is backed by 10-year commercial agreements with strong counterparties. The first facility is expected to be operational before year-end and the second in early 2026. These developments will add meaningful capacity in one of the most active basins in North America, and generate stable, reoccurring cash flow for years to come. We've also increased the project scope associated with our industrial heartland waste processing facility, which will expand our ability to manage industrial waste in an underserviced region. This facility is now expected to be operational later in Q2. In total, over 70% of our 2025 organic growth capital is directed towards long cycle across commodity cycles. As these assets come online, together with an expected recovery in metals recycling and continued strength across our core network, we anticipate delivering solid adjusted EBITDA growth in 2026. Our balance sheet remains strong with total debt to EBITDA of 2.1 times or 1.8 times excluding leases, providing ample flexibility to support our capital priority. Through the first nine months of the year, we've returned $335 million or nearly $1.50 per share to shareholders through dividends and share repurchases, reducing our outstanding shares by approximately 8%. We remain committed to opportunistic buybacks under our normal course issuer bid and maintaining our quarterly dividend of $0.10 per share supported by our strong free cash flow and balance sheet flexibility. Our strategy remains unchanged to build long life, high barriers to entry, infrastructure backed by contracts, and reoccurring volumes to operate safely and efficiently and to continue to return meaningful capital to shareholders. With that, I'll turn it over to Chad to walk through our Q3 financial results in more detail.

Thanks, Alan, and good morning, everyone. From a financial standpoint, the third quarter, again, demonstrated the strength and stability of our cash flow profile. Revenue, excluding all purchase and resale, was $365 million, down 2% from Q3 2024, primarily due to lower specialty chemical sales and volumes tied to reduced drilling and completion. This decrease was partially offset by contributions from the emitting metals recycling acquisition completed earlier this year. Net income was $1 million compared to $94 million in the same period last year. The decline reflects a non-cash, $55 million provision in the current quarter, as well as the absence of a one-time tax recovery that benefited the prior year results. Excluding these non-recurring items, underlying profitability remains stable. The provision relates to an arrangement for crude oil storage capacity at a major oil hub in Western Canada. Following the startup of the Trans Mountain pipeline expansion last year and the resulting increase in market egress, the near-term In accordance with accounting standards, SECURE recognized the provision for the present value of the remaining fixed monthly payments associated with the contract. Adjusted EBITDA was $135 million, up 6% from the prior year, as contributions from the Edmonton Metals recycling acquisition and proactive G&A cost reductions more than offset the impact of lower drilling and completion activity and continued to beat this in the Ferris Metals market. Funds flowed from operations was $96 million, and discretionary free cash flow was $68 million, providing ongoing capacity to support dividends, growth, and share buybacks. We invested $54 million of gross capital in the quarter, bringing the year-to-date total to $97 million, primarily for the mounting water projects, incremental rail cars, and optimization projects. Our sustaining capital spend was $24 million in the quarter and $59 million year-to-date, consistent with our expectations.

We continue to forecast we'll spend $85 million on sustaining CapEx this year.

With respect to capital returns, we repurchased 1.7 million shares at an average price of $15.77 for a total of $27 million in Q3, bringing year-to-date repurchases to 18.1 million shares for $268 million, including the substantial issuer bid completed earlier this year. We maintain our quarterly dividend of 10 cents per share, for an annualized yield of approximately 2%. Our leverage ratio of 2.1 times total debt EBITDA and 1.8 times excluding leases reflects continued balance sheet strength and liquidity of over $300 million, comprised of cash on hand and capacity on our credit facility. With a strong free cash infrastructure as projects begin to come online. While our outlook assumes steady operating conditions, results could be influenced by several seasonal and market factors, including the severity of December weather, the extent of typical year-end holiday slowdowns, significant movements in commodity prices, and the timing of metals inventory drawdowns. I'll now pass it on to Corey for some operational detail.

Thanks, John. Operationally, our team has executed very well throughout the quarter. and facilities, we safely processed on average 91,000 barrels per day of produced water and 36,000 barrels per day of slurry and emulsion. We also recovered 220,000 barrels of oil from waste streams, reinforcing the value we create. 941,000 tons of solid waste were also safely contained across our landfill network. Overall, volumes declined from the third quarter of 2024, driven by a combination of lower activity levels, maintenance program, and remediation project deferrals. Specifically, our produced water volumes were down 3% on a quarter-over-quarter basis, although up 1% on a trailing 12-month basis. In addition to lower field activity, the scheduled maintenance and shutdown of a third-party gas plant temporarily impacted produced water volumes in the Maunee-Wapiti area. Those upstream volumes were fully restored by mid-Q3. Processing volumes were down 16% quarter-over-quarter as discretionary work related to customer integrity management programs, facility turnarounds, and some remediation program postponement. Additionally, as part of secure preventative maintenance programs and taking advantage of lower field activity levels during the quarter, we had a number of our facilities undergo one-time maintenance work, further impacting processing volumes. All of those facilities are back to 100% operational. As a result of the produced water and processing volumes, our recovered oil volumes decreased by 26%. Landfill volumes were down 23% quarter over quarter due to a combination of postponed remediation projects and field activities from our customers. Of note, the comparative Q3 2024 was a record quarter for Secure's landfill segment, magnifying the decrease in the current year period. While our volumes were lower compared to the third quarter of 2024, there was minimal impact to waste processing facility and landfill margin contributions due to price increases implemented at the beginning of 2025. Our metals recycling business continues to benefit from the scale and efficiencies of the Edmonton acquisition. We are proactively managing through near-term challenges in the Ferris market by expanding our rail fleet with 50 new cars in 2025 and adding 50 cars on short-term lease to improve efficiency and access to U.S. markets. At present, we have approximately 220 rail cars shipping Ferris scrap to the U.S. Prior to the tariffs being enacted, enacted, we were able to accept, process, and ship our inventory at a minimum of one inventory turn per month. Since the tariffs were put in place, our inventory turns have decreased where it takes us, on average, 45 days to turn our inventory, causing our inventory to bill. This is a result of shipping our product further into the U.S. versus our domestic mills with shorter rail car turnaround times. As we move into the fourth quarter, the addition of the new rail cars will allow us to catch up on our inventory shipments though the full financial benefit may be realized into 2026 as we continue to manage logistics, our average terms per month, and expand our rail capacity, a key competitive advantage that provides greater flexibility and cost efficiency in serving multiple markets. We are also continuing to prioritize non-ferrous metals with stronger fundamentals and maintaining disciplined purchasing and feedstock pricing to protect margins. We expect performance to improve as three key factors normalize. Rail throughput increases and logistics efficiencies take effect. North American steel demand recovers, supported by infrastructure and manufacturing investment, and import pressure eases as global steel production moderates. In our specialty chemicals business, reduced drilling and completions activity has affected our drilling fluids business. However, our production chemicals businesses continues to grow. We've invested in people, equipment, and product development help customers address complex operational and production challenges. In our energy infrastructure segment, pipeline and terminaling volumes averaged approximately 135,000 barrels per day, up modestly from last year, driven by increased throughput at our Clearwater terminal following the phase three expansion. These assets continue to operate under long-term commercial agreements, providing stable fee-based cash flows and a platform for future growth. Our talented staff continue to drive cost efficiency, and throughput optimization across our operations. Overall, our infrastructure continues to perform its design, providing safe, reliable, and environmentally responsible solutions to our customers. With that, I'll turn the call back to Alan for closing remarks.

Thanks, Corey. To summarize, Secure delivered another solid quarter in what remains a volatile environment. Our infrastructure-backed network continues to generate stable, high-quality cash flow supported by reoccurring production and industrial volumes, regulatory-driven demand, strong customer relationships, and operational excellence. Operationally, our teams continue to perform exceptionally well, executing projects that strengthened our network and lay the groundwork for higher EBITDA in 2026. In metals recycling, we've acted quickly to address market conditions through targeted strategies that protect margins and reposition sales to stronger markets. Looking ahead to 2026, we expect to build momentum as new infrastructure comes online and metal recycling synergies and U.S. transportation logistics are streamlined. These initiatives, combined with supportive long-term industrial fundamentals, provide a strong foundation for sustained growth. The startups at the Trans Mountain Expansion and the Commissioning of LNG Canada are improving market access and narrowing price differentials, supporting incremental production and associated waste volumes. Additional LNG export capacity, data center developments, and ongoing government programs focused on the liability reduction and are expected to reinforce these structural tailwinds in years ahead. With more than 80 strategically located high barrier to entry facilities across Western Canada and North Dakota, SECURE is well positioned to meet growing demand for waste and energy infrastructure. Our network offers both expansion capacity and stability across market cycles, underpinning consistent volume and earnings growth through 2026 and beyond. Thank you for joining us today and your continued support of Secure. We'd like to highlight that we expect to provide 2026 adjusted EBITDA guidance and capital investment guidance in February of 2026, along the release of our fourth quarter and full year 2025 results. This is a change from prior years, but aligns more closely with industry practice amongst our peers.

Operator, we'd now like to open the line for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star four by the one on your telephone keypad. You will hear a prompt that your hand has been raised, and should you wish to cancel your request, please press star four by the two. If you're using a speakerphone, please lift the handset before pressing any keys.

One moment, please, for your first question. Thank you.

And your first question comes from the line of Connor Gupta from Scotiabank. Please go ahead.

Thanks, operator. Good morning, everyone. Just to maybe begin with on the volume side of things, you know, I think you guys pointed out, obviously, there's a bunch of issues in the core because of which the waste management segments volumes declined. I'm just wondering, is it possible to kind of pass out how much of the volume decline was directly associated with drilling and completion as opposed to the turnaround and other issues with production?

Good morning, Conor. It's Corey. Good question. And, you know, when you look at the rig count dropping 15% quarter over quarter, it certainly made up a big chunk of the decline. And when producers, the knock-on effect, producers will tighten their budgets, they'll drill less wells, they'll complete less wells. And when they complete less wells, there's less waste to process, there's less drilling waste to dispose of. So there's just this knock-on effect where you're getting lower volumes. But when you look into the quarter, you know, July was very similar to Q2 levels. And as you move through July, August, September, there was just a general incremental increase month over month. And we're seeing that into October. So, you know, it was a tougher quarter from a volume perspective, but the assets operated the way they're supposed to, and our teams are chasing and hunting every barrel and cubic meter of waste that's out there.

I think, too, Connor, to add to what Corey's saying, I think with a softer commodity, and I think we've been hovering in the high 50s, low 60s here, and we've said this in our outlook, it makes producers pause a little bit. They're thinking more on if they want to pause and turn around, or if they want to slow a certain as we're kind of looking into this quarter here, this last quarter of the year, it seems like most of them are kind of driving towards spending their budgets for the year. But you can understand with the software commodity why activity levels in general would slow down a bit and relatively hung in there as well. So it wasn't really a surprise to us. It's just, you know, you kind of saw it come to fruition as we got through Q3.

Okay. That makes sense. Definitely. On the guidance, then, so, I mean, you're expecting now, I think, 500-ish for a full year on EBITDA basis, and I think it's not, like, down a lot from the low end of what you guys had before, but... Is that, like, incrementally pointed out? Obviously, the M&A, that didn't happen. But is there an incremental pressure, you would say, from the metal recycling side or from the drilling and completion side versus where you guys were thinking three months ago, perhaps? You know, I mean, I'm just trying to understand, like, you know, what drove this push down toward the 500? Is it more the metals or the drilling? Yeah.

Good question. You know, I would say there's a bit of balance on both. I think it's a bit of carryover on just in general activity levels with the softer commodity price. And, you know, as I said, producers are kind of driving towards completing their budgets. December now becomes the, you know, the period at which things slow down here in Western Canada. You know, you used to have a bit of a breakup in the second quarter, but with all the pad drilling going on, they really just go hard all throughout the year. And so giving their own guys a break is typically now the Christmas break. And so depending on whether in December and how close they get to their budgets, we know that there's going to be some softer volumes coming through in that month. So part of it is associated with that. Part of it is associated with metals. It took us throughout the entire Q3 to new US markets. And so we were successful now transitioning 95%. I mean, it's a huge competitive advantage for our facilities here in Western Canada to have, you know, not only the, you know, the mega shredder in Edmonton and being able to process more efficiently, but also to have these rail cars and move in the market into the US. And so, you know, huge advantage for us to shift entirely all of our scrap into the U.S. I think I talked about it in Q2, just maybe we could get an agreement with the U.S. on tariffs on steel, and that didn't happen. So we've effectively transitioned now 95% to the U.S. market. So for us, now that we have the market, it's all around the logistics and being able to get the turnaround time on the trains. typically when it's closer in Canada or relatively close from the border, you're looking at 21 days turning around your cars and getting them back and filled up again. You know, as we think about further into the U.S., we're moving more into that 40, 45 days to get those same cars back. And so that that logistics and that turnaround time is really the delta here. And we've seen our inventory start to build here in through October. And it's going to be how efficient we can get the logistics nailed down here to fork the fourth quarter here. But there could be some amount that spills in. So it's really just a shift of profits as we think about our logistics. We've got an additional 50 cars that we've just leased That's going to add on to our fleet. So we're sitting around 270 rail cars right now. And so we're going to run with that, make sure we can optimize our logistics. And yeah, so those would be the two main factors for, you know, pinning it down on approximately $500 million.

Okay, that's a really helpful color. And I just want to wrap up on the metal recycling side. I think you laid out a lot of factors there and numbers there. So I just want you to understand, you know, is that shift to the U.S. 95%? I mean, that's obviously significantly higher than what you typically did before. Is that more like a temporary phenomenon and, you know, when you get – more cars in next year, A, do you plan to return the leased cars? And B, do you expect the 40, 45 day inventory, sorry, do the car turnaround time to get back to close at like 21 days or could still be higher because of the U.S.? ?

Yeah, I mean, logistically, it is further to transport the car. So I think the average days, maybe we get it down into that, call it 40 days range. The leased cars that we brought on, that's, I think, another three-year lease or five-year lease. for those cars. So they're in our fleet and it'll be able to allow us to manage into the US market for quite some time. We don't anticipate coming back into the Canadian market for quite some time. So we're really in developing these relationships with the mills in the US and just optimizing our turnaround time. So if we need a few more leased cars, if we find that that is the optimal level that we need, then that's what we're going to run. So we'll get it figured out here in It's what I call, call it a three to six months, bringing out the logistics, but it just puts us, it's such an advantage to our competition to be able to have these markets and to be able to price into the US. So it's again, you know, coming up with this whole hub and spoke model, getting these other locations to feed into Edmonton to not only process it more efficiently, but then get it on the cars and get it down to these markets is great for us. So, yeah, so we'll navigate that through Q4 and Q1, but after that, it should be just smooth, smooth running.

Yeah, Conor, once the Canadian mills get some demand back, and whether that's tariff relief or it's part of our federal government's Build Canada Better program, even if you have some Canadian mills resume, you still have to build some really good relationships with these mills, and there's certainly demand that we're seeing into Q1, so we don't have any issues in this current environment in being able to get rid of this inventory. Yet, Canada does get in a much better position.

We just have more outlets for our product, which is good news all around. Yes, that's great. Thanks for taking my question. Thanks, Connor.

Thank you. And your next question comes from the line of Michael Dumet from National Bank. Please go ahead.

Hey, good morning, guys. I know it's 10% of your business, but I do want to press on it a little bit more. So on the metals business, is there any way you can quantify how much of the 2025 EBITDA guidance was attributable to the metals? And the reason why I'm asking is because I feel like that's part of the business that can bounce back relatively easily in 2026. And just the latter part of that question, When you guys think about the metals business recovering in 2026, I would think that feedstock prices have to decline to offset the higher logistic costs. So I'm just wondering if you've seen that already.

Morning, Michael. Yeah, great question. So when we look at our guidance for 2025, we've talked about metals being about 10% of that overall guidance. So, you know, call it in the ballpark of around $50 million. And, you know, I commented, there's a couple things that have happened. Number one, when we acquired GRI in February, we knew that there was going to be a timeframe here, call it 12 to 18 months to realize synergies. And what are synergies for? The first synergy we wanted to achieve was operational synergies. So this was, you know, getting our other locations that we call the feeder location set up in a matter which we can transfer that scrap efficiently into the Edmonton market and then process it. So get the operational synergies. Our shredder was running around 50% utilization. Our goal was to get it above 65% and we're well on track to getting higher utilization, which is a more efficient way to process the scrap. So we knew there was going to be operational synergies We knew there was going to be, you know, transportation synergies, and that's really from these new cars where they can hold 30% more scrap than these old leased cars that we have. And that transportation synergy, you pay by the car, you don't pay by the size that it can hold. And so we knew we would gain transportation synergies as well. And then we had some system integrations we wanted to do as well. A lot of these mom-and-pops run very archaic systems. We wanted to get it all up to a new operating system where we could use a lot of data management to make our inventory turns and our monthly processing very, very efficient. And so those synergies were going to take time. So we're going to get synergies into 2026 once we have all of that figured out. But when we think about the, you know, let's call it the 50 million or so associated with metal, switching into the U.S. market, there was a time, you know, that we're sending kind of smaller loads where they're getting test loads and we're getting relationships complete with some mills that we haven't done business with in quite some time. So there three to five million kind of impact to get that all established. So now we're moving into really can we turn the inventory? You know, I wanted to turn the inventory every 30 days so that, you know, you're not taking any sort of commodity risk. That's ultimately the way we're going to set up the business. We don't want the volatility. We just want the spread between what's coming across the scale to what we can sell to in the U.S. market. And so to your point, is the price coming down to offset the logistics expense? The answer is yes. We have to factor in what we would be willing to pay on the scale versus the cost to transport it to get to the U.S. market. So that just takes time to figure out. So there is more upside as we think about 2026 metals, getting all of this logistically figured out and optimized, but also get those synergies realized. So there will be upside into 2026. And Q4 really is just a matter of what is our inventory build and how many cards do we need to make this as optimal as possible.

That's a really helpful color. Alan, just follow the three to five line that you talked about there. Was that the Q2, Q3 impact or potentially the full year impact?

That's right. That's the Q2, Q3 impact. So now I'm moving more into just the logistics aspect in Q4 on the inventory build and how much I can transfer out.

And maybe changing topics here, on the buyback, what are your thoughts on share repurchases at these higher levels? I mean, do you or maybe the board, do you have a preference for opportunistic buybacks or is there a view that maybe a more regular pro rata purchase makes more sense here?

Yeah, good morning, Michael. It's Chad here. We've always said we're going to be opportunistic, and we've re-evaluated every quarter along with our board and just kind of set parameters as to how much we're going to buy. Obviously, we want to be in the market, buying at levels that we think and continue to re-evaluate, but we kept the wording on purpose that we're gonna continue to be opportunistic buyers of our own stock.

Okay, great. Thanks, guys. Thanks, Michael. Thank you.

Thank you. Once again, should you have a question, please press star four by the one on your telephone keypad. And your next question? It comes from the line of Arthur Nagrani from RBC Capital Markets. Please go ahead.

Good morning. Thanks for taking my questions. Just on the specialty chemicals business, correct me if I'm wrong, but I think you previously called out that drilling and completion is about 50% of that business, with the rest being more tied to production. So I guess would it be fair to say that drilling and completion activity or revenue was down meaningfully more than that 12%? for that business, or are there any other moving pieces that we should be keeping in mind there?

Yeah, good morning, Arthur. It's Chad here.

Yeah, within specialty chemicals, about half is drilling fluids, so really tied to the rate count. And then the other half is specialty chemicals. And so, yeah, I'd say the revenue decline there is fairly close to what

Got it.

And then on the metals recycling business, it seems like the Edmonton facility generated $28 million of revenue in the quarter, which is only moderately lower than the $30 million in Q2. And that's, I guess, despite all the headwinds. But can you maybe talk about how things are progressing with that acquisition and maybe what the revenue generating capacity of that business could be like in a steadier operating environment?

Morning, Arthur. Yeah, I mean, the

I would say when you think about having a macro challenge like finished steel tariffs in Canada, it has an impact on the market. This is pretty unprecedented, and it's why not only with the tariffs, but also just general kind of slowdown in activity from an industrial standpoint. We knew we had to deal with that kind of more challenging backdrop, but the business and the acquisition that we've acquired, we're very happy with. It is performing very well. We're super happy with the utilization of that shredder and how the shredder's operating the yard, how we're integrating all of our facilities. So we know there is substantial upside as we think about 26 and 27. bought it in a low part of the cycle and we're currently optimizing at the same time and so you know Managing, like I said, the logistics piece, once we get that figured out, this thing is going to be running very, very smoothly. And our goal will be to turn this inventory every month. And I think it gives you that, again, that competitive advantage to have multiple markets to be able to send your product to. And that creates that advantage for us, specifically when we're attracting stress. So, yeah, so there is, you know, I would consider what you see this year as being our low part of what metals can do. And there's definitely going to be upside. And, well, I think I mentioned it in the call. We're going to put 2026 guidance out with our 2025 annual Q4 release kind of end of February. That's when most of our waste peers put out guidance. So, at that point, I'll give you more clarity on where I think metals could go for the 2026 year. It just gives me a few more months to get through some of these areas I spoke about.

Got it. That's helpful. And then I guess in the energy infrastructure segment, you called out lower contribution from more mature areas. Is that just a function of, I guess, decline curves on producing wells? And do we need to see an uptake in drilling and completion activity for this to maybe reverse?

Yeah, I think it's a bit of both of those, Arthur.

You know, you do have mature areas, and when they stop drilling in some of those areas, the production does come down. But again, I'll step with the contributions from our from our NFC business. So we're pretty comfortable and confident in this business and market growth.

Yeah, I think when you look at the price of oil and instead of kind of high 50s, if you look at the basins here, the reservoirs in Canada, you're kind of in that break even at a $50 WTI. And so, yeah, they're going to slow down when you're into the 50s, but you know, when you look at the plays, they're very, I would say, from a netback perspective, ahead of where maybe some of the U.S. production would be. And so... All of this, you see that little bit of a pause to be expected given we're in the third year where WTI seems to be soft. But it just shows you, though, even with that little bit of decline on the drilling aspect, production still was very flat and kind of came into where we expected. So it's a good signal for us.

And obviously, we're more bullish as we think about activity levels in the 2026. Then last one for me.

The adjusted EBITDA margins were notably strong in the quarter, particularly in light of, I guess, the revenue declines across your segments. Is there anything in there that you would call out as maybe more one-time in nature, or can we expect margins to be more in this range going forward, I guess, with keeping seasonality in mind?

Yeah, I think, you know, when you look at the last, you know,

where the margin percentage has been, it has fluctuated. It is, you know, with all our different service lines, they all do have, you know, in some instances, fairly significantly different margin profiles. And so it really is the mix in the quarter. So this quarter, I think the biggest drivers were, you know, specialty chemicals being a lower percentage of the overall EBITDA. They are at a lower margin. margin to higher than where we've seen on average. And then also, you know, probably lower than normal G&A this quarter as well, just helped to get to that 37%. But I think year-to-date, we're about 34%, and I think that's probably, you know, when you look at what we forecast going forward, we'd expect to be in the mid-30s.

But it will be somewhat variable quarter over quarter. Thank you.

There are no further questions at this time.

Mr. Clench, please proceed.

Thank you for your time today. We look forward to presenting at the Barrett Industrial Conference in Chicago in a couple of weeks, followed by Scotiabank Transportation and Industrials Conference in Toronto mid-November. As mentioned, we expect the to release our fourth quarter and 2025 annual results along with 2026 guidance at the end of February. Thank you all for your continued support.

And this concludes today's call. Thank you for participating. You may all disconnect.