AKITA Drilling Ltd. Announces First Quarter Results
Apr 30, 2010
CALGARY, April 30 /CNW/ - AKITA Drilling Ltd.'s net earnings for the three months ended March 31, 2010 were $1,015,000 or $0.06 per share on revenue of $33,235,000. Comparative figures for 2009 were earnings of $3,908,000 or $0.21 per share on revenue of $41,696,000. Funds flow from operations for the period was $7,066,000 compared to $12,051,000 in 2009.
Weak market conditions continued into the first quarter of 2010, resulting in lower than anticipated margins for the first quarter. Operating statistics for the first three months of 2010 and 2009 are as follows:
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Number of Rigs Operating Days
Gross Net (Year to Date)
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Canada 2010 37 33.725 1,701
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2009 38 35.725 1,472
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United States 2010 2 1.5 0
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2009 3 1.5 201
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Total 2010 39 35.225 1,701
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2009 41 37.225 1,673
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Management is cautiously optimistic that drilling activity will increase in the second quarter of 2010. However, continued pressure on margins is anticipated until North American natural gas prices increase. The Company continues to pursue oil and gas opportunities across selected North American locations in addition to marketing rigs for potash projects. The demand for the Company's pad rigs remains a bright spot in this difficult market.
The Company has a strong balance sheet and has a broad range of first-class equipment, including eight pad rigs and three conventional rigs undergoing pad rig retrofits, and personnel to meet our customer requirements, both for the current market and as opportunities arise.
Selected financial information for the Company is as follows:
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Consolidated Balance Sheets
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Unaudited March 31 December 31
($000's) 2010 2009 2009
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Assets
Current Assets
Cash and cash equivalents $ 28,801 $ 46,347 $ 34,142
Term deposits 20,987 - 18,000
Accounts receivable 39,070 45,608 28,523
Income taxes recoverable - 29 330
Other 1,284 1,842 421
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Restricted cash 2,500 5,000 5,000
Capital assets 142,747 153,794 147,799
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$ 235,389 $ 252,620 $ 234,215
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Liabilities
Current Liabilities
Accounts payable and accrued
liabilities $ 11,234 $ 22,071 $ 10,123
Deferred revenue 952 3,777 197
Dividends payable 1,277 1,276 1,277
Income taxes payable 188 - -
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13,651 27,124 11,597
Class A and Class B Shareholders'
Equity
Class A and Class B shares 23,376 23,327 23,376
Contributed surplus 2,271 2,271 2,271
Accumulated other comprehensive income (367) 132 (354)
Retained earnings 175,891 175,510 176,153
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201,171 201,240 201,446
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$ 235,389 $ 252,620 $ 234,215
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Consolidated Statements of Earnings and Retained Earnings
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Unaudited Three Months
($000's except per share amounts) Ended March 31
2010 2009
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Revenue $ 33,235 $ 41,696
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Costs and expenses
Operating and maintenance 21,690 25,150
Depreciation 6,656 6,580
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31,994 36,126
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Revenue less costs and expenses 1,241 5,570
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Other income
Interest income 122 215
Gain on sale of joint venture interests
in rigs and other assets - 21
Gain on foreign currency translation - 2
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122 238
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Earnings before income taxes 1,363 5,808
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Income taxes
Current 977 334
Future (629) 1,566
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Net Earnings 1,015 3,908
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Retained earnings, beginning of period 176,153 172,878
Dividends declared (1,277) (1,276)
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Retained Earnings, End of Period $ 175,891 $ 175,510
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Earnings per Class A and Class B Share
Basic $ 0.06 $ 0.21
Diluted $ 0.06 $ 0.21
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Consolidated Statements of Cash Flows
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Unaudited Three Months
($000's) Ended March 31
2010 2009
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Operating Activities
Earnings from continuing operations $ 1,015 $ 3,908
Non-cash items included in earnings
Depreciation 6,656 6,580
Future income taxes (629) 1,566
Expense for defined benefit pension plan 24 18
Gain on sale of joint venture interests
in rigs and other assets - (21)
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Funds flow from operations 7,066 12,051
Change in non-cash working capital (9,716) (793)
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(2,650) 11,258
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Investing Activities
Capital expenditures (1,604) (7,358)
Reduction in cash restricted for loan guarantees 2,500 -
Proceeds on sale of joint venture interests
in rigs and other assets - 49
Change in non-cash working capital (2,297) 1,359
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(1,401) (5,950)
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Financing Activities
Dividends paid (1,277) (1,276)
Proceeds received on exercise of stock options - 15
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(1,277) (1,261)
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Foreign currency translation (13) 132
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Increase in Cash (5,341) 4,179
Cash position, beginning of period 34,142 42,168
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Cash Position, End of Period $ 28,801 $ 46,347
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Interest paid during the period $ 2 $ 8
Income taxes paid during the period $ 458 $ 1,985
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Consolidated Statements of Comprehensive Income
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Unaudited Three Months
($000's) Ended March 31
2010 2009
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Net Earnings $ 1,015 $ 3,908
Other comprehensive income
Foreign currency translation adjustment (13) 132
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Comprehensive Income $ 1,002 $ 4,040
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%SEDAR: 00002868E
For further information: Mr. Murray Roth, Vice President Finance, (403) 292-7950, Website: http://www.akita-drilling.com