/R E P E A T -- AKITA Drilling Ltd. Announces Third Quarter Results/
Oct 31, 2008
CALGARY, Oct. 30 /CNW/ - AKITA Drilling Ltd. announced third quarter
earnings and funds flow today. AKITA Drilling Ltd.'s net earnings for the nine
months ended September 30, 2008 were $12,826,000 ($0.70 per share) on revenue
of $101,407,000. Comparative figures for 2007 were earnings of $14,373,000
($0.79 per share) on revenue of $109,288,000. Funds flow from continuing
operations for the period was $25,332,000 compared to $27,852,000 in 2007.
Earnings for the three months ended September 30, 2008 were $3,681,000
($0.20 per share) on revenue of $33,747,000 compared to $2,196,000 ($0.12 per
share) on revenue of $29,804,000 for the corresponding period in 2007. Funds
flow from continuing operations for the quarter ended September 30, 2008 was
$7,723,000 compared to $6,136,000 in the corresponding quarter in 2007.
Although still low, AKITA's drilling activity showed some improvement in
the third quarter, particularly for medium and deep capacity rigs. Operating
statistics for the first nine months of 2008 and 2007 are as follows:Number of
Drilling Rigs Number
of Wells Operating
Gross Net Drilled Days
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Canadian Operations 2008 37 34.725 640 4,666
2007 39 35.575 697 4,558
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U.S. Operations 2008 3 1.5 2 122
2007 3 1.5 3 131
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Total 2008 40 36.225 642 4,788
2007 42 37.075 700 4,689
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-------------------------------------------------------------------------During the third quarter, AKITA entered into a multi-year contract with a
major customer and is currently performing upgrades on two of its rigs in
order to fulfil this obligation. In addition, AKITA currently has 95% of its
rigs booked for upcoming winter work, although not all of these upcoming
projects may span the entire season. Nevertheless, management remains cautious
in its expectations, particularly as a consequence of recent significant
declines in crude oil and natural gas prices and the unprecedented events that
are taking place in the world capital markets.
Financial results for the third quarter are as follows:-------------------------------------------------------------------------
Consolidated Balance Sheets
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Unaudited September 30 December 31
($000's of Canadian Dollars) 2008 2007 2007
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ASSETS
Current assets
Cash $ 46,316 $ 38,778 $ 43,166
Accounts receivable 35,808 26,604 22,505
Other 1,498 651 272
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83,622 66,033 65,943
Restricted cash 5,000 - 5,000
Capital assets 147,642 149,079 152,579
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$ 236,264 $ 215,112 $ 223,522
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LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities $ 12,941 $ 10,722 $ 13,051
Dividends payable 1,278 1,279 1,279
Income taxes payable 2,290 151 873
Deferred revenue 1,888 783 1,617
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18,397 12,935 16,820
Future income taxes 16,199 15,749 15,055
Pension liability 3,805 3,563 3,609
CLASS A AND CLASS B SHAREHOLDERS' EQUITY
Class A and Class B shares 23,334 23,369 23,369
Contributed surplus 2,271 1,036 1,110
Retained earnings 172,258 158,460 163,559
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197,863 182,865 188,038
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$ 236,264 $ 215,112 $ 223,522
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Consolidated Statements of Earnings, Comprehensive Income and
Retained Earnings
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Unaudited Three Months Nine Months
($000's of Canadian Dollars, Ended Ended
except per share amounts) September 30 September 30
2008 2007 2008 2007
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REVENUE $ 33,747 $ 29,804 $ 101,407 $ 109,288
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Operating and maintenance 20,970 19,468 61,688 65,038
Depreciation 3,935 3,662 12,562 11,136
Selling and administrative 4,079 3,610 13,026 12,061
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28,984 26,740 87,276 88,235
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Revenue less costs and
expenses 4,763 3,064 14,131 21,053
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OTHER INCOME (EXPENSE)
Interest income 479 449 1,456 1,233
Gain on sale of joint
venture interests in rigs
and other assets 32 62 696 196
Gain (loss) on foreign
currency translation 52 (208) 94 (825)
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563 303 2,246 604
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EARNINGS BEFORE INCOME TAXES 5,326 3,367 16,377 21,657
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INCOME TAXES
Current 1,612 970 4,268 5,325
Future 33 123 1,144 1,733
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1,645 1,093 5,412 7,058
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EARNINGS FROM CONTINUING
OPERATIONS 3,681 2,274 10,965 14,599
Gain on disposal from
discontinued operations,
net of tax - - 1,941 -
Discontinued operations,
net of tax - (78) (80) (226)
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NET EARNINGS AND
COMPREHENSIVE INCOME 3,681 2,196 12,826 14,373
Retained earnings, beginning
of period 170,146 157,618 163,559 148,781
Dividends declared (1,277) (1,273) (3,835) (3,838)
Adjustment on repurchase and
cancellation of share capital (292) (81) (292) (857)
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RETAINED EARNINGS,
END OF PERIOD $ 172,258 $ 158,460 $ 172,258 $ 158,459
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Earnings per Class A and
Class B share from
continuing operations
Basic $ 0.20 $ 0.12 $ 0.60 $ 0.80
Diluted $ 0.20 $ 0.12 $ 0.60 $ 0.79
Earnings per Class A and
Class B share
Basic $ 0.20 $ 0.12 $ 0.70 $ 0.79
Diluted $ 0.20 $ 0.12 $ 0.70 $ 0.78
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Consolidated Statements of Cash Flows
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Unaudited Three Months Nine Months
($000's of Canadian Dollars) Ended Ended
September 30 September 30
2008 2007 2008 2007
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OPERATING ACTIVITIES
Earnings from continuing
operations $ 3,681 $ 2,274 $ 10,965 $ 14,599
Non-cash items included in
earnings from continuing
operations
Future income taxes 33 123 1,144 1,733
Expense for defined
benefit pension plan 65 65 196 196
Stock options charged
to expense 41 74 1,161 384
Gain on sale of joint
venture interests in rigs
and other assets (32) (62) (696) (196)
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Funds flow from continuing
operations 7,723 6,136 25,332 27,852
Cash provided from (to)
discontinued operations - (16) 24 (49)
Change in non-cash working
capital (14,065) 527 (13,208) (6,202)
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(6,342) 6,647 12,148 21,601
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INVESTING ACTIVITIES
Capital expenditures (5,779) (5,973) (9,861) (31,531)
Proceeds on sale of joint
venture interests in rigs
and other assets 119 4,740 1,259 4,911
Proceeds on sale of
discontinued assets - - 3,510 -
Change in non-cash
working capital 211 (898) 243 (1,358)
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(5,449) (2,131) (4,849) (27,978)
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FINANCING ACTIVITIES
Dividends paid (1,277) (1,273) (3,835) (3,838)
Repurchase of share capital (327) (88) (327) (928)
Change in non-cash working
capital 13 (6) 13 (6)
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(1,591) (1,367) (4,149) (4,772)
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INCREASE (DECREASE) IN CASH (13,382) 3,149 3,150 (11,149)
Cash position, beginning
of period 59,698 35,629 43,166 49,927
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CASH POSITION, END OF PERIOD $ 46,316 $ 38,778 $ 46,316 $ 38,778
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Interest paid during the
period $ 8 $ 14 $ 15 $ 53
Income taxes paid during
the period $ 1,199 $ 1,964 $ 3,687 $ 11,021
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FORWARD-LOOKING STATEMENTS
From time to time Akita Drilling Ltd. ("AKITA" or the "Company") makes
written and verbal forward-looking statements. These forward-looking
statements include but are not limited to comments with respect to our
objectives and strategies, financial condition, the results of our operations
and our business, our outlook for our industry and our risk management
discussion. Forward looking statements are typically identified with words
such as "believe", "expect", "forecast", "anticipate", "intend", "estimate",
"plan" and "project" and similar expressions of future or conditional events
such as "will", "may", "should", "could" or "would".
By their nature these forward-looking statements involve numerous
assumptions, inherent risks and uncertainties, both general and specific, and
the risk that predictions and other forward-looking statements will not be
achieved. We caution readers of this News Release not to place undue reliance
on these forward-looking statements as a number of important factors could
cause actual future results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such forward-looking
statements.
Forward-looking statements may be influenced by the following factors: the
level of exploration and development activity carried on by AKITA's customers,
world oil and North American natural gas prices, weather, access to capital
markets and government policies. We caution that the foregoing list of
important factors is not exhaustive and that when relying on forward-looking
statements to make decisions with respect to AKITA, investors and others
should carefully consider the foregoing factors as well as other uncertainties
and events.
For further information:
For further information: Murray Roth, Vice President, Finance and Chief Financial Officer, (403) 292-7950, website: http://www.akita-drilling.com