AKITA Drilling Ltd. Announces First Quarter Results
Apr 26, 2007
CALGARY, April 26 /CNW/ - AKITA Drilling Ltd. announced first quarter
earnings and funds flow today. AKITA Drilling Ltd.'s net earnings for the
three months ended March 31, 2007 were $9,087,000 or $0.50 per share on
revenue of $52,873,000. Comparative figures for 2006 were earnings of
$11,002,000 or $0.59 per share on revenue of $61,195,000. Funds flow for the
period was $15,630,000 compared to $16,519,000 in 2006.
Weaker market conditions that began in the second half of 2006 continued
into the first quarter of 2007, resulting in lower contribution margins for
all rig categories. Operating statistics for the first three months of 2007
and 2006 are as follows:-------------------------------------------------------------------------
Number of
Number of Rigs Wells Operating Operating
------------------ Drilled or Days Hours
Gross Net Serviced (Drilling) (Servicing)
-------------------------------------------------------------------------
Canadian 2007 37 35.075 313 2,085 N/A
Drilling 2006 37 34.075 399 2,601 N/A
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Alaskan 2007 3 1.5 1 59 N/A
Drilling 2006 1 0.5 2 70 N/A
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Canadian Well 2007 3 1.5 24 N/A 1,128
Servicing 2006 3 1.5 26 N/A 2,437
-------------------------------------------------------------------------On April 13, 2007, the Company's management and employees were recognized
for the eighth time in the past nine years for their achievement in safety by
receiving a CAODC Safety Leadership Award at the 27th Annual CAODC Safety
Banquet.
As a result of lower commodity prices for natural gas, and to a lesser
extent crude oil, management anticipates that weaker market conditions will
continue in the drilling business for the next six months and in the service
business for the foreseeable future. AKITA continually reviews its strategies
in order to optimize its market position and has the financial strength to
retain its focus in terms of safety and quality service for its customers.
Additionally, the Company remains well positioned to capitalize on longer-term
improvements in demand as a result of its diversified fleet.
Financial results for the first quarter are as follows:Consolidated Balance Sheets
-------------------------------------------------------------------------
March 31 December 31
($000's) 2007 2006 2006
(Unaudited) (Audited)
-------------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------------
Current assets
Cash $ 30,337 $ 38,486 $ 49,927
Accounts receivable 58,405 56,602 38,529
Other 1,492 517 206
--------- --------- ---------
90,234 95,605 88,662
Investments - 55 -
Capital assets 138,450 106,279 133,575
--------- --------- ---------
$228,684 $201,939 $222,237
--------- --------- ---------
-------------------------------------------------------------------------
LIABILITIES
-------------------------------------------------------------------------
Current liabilities
Bank indebtedness $ 2,850 $ - $ -
Accounts payable and accrued liabilities 22,237 21,111 24,772
Deferred revenue 1,732 - -
Dividends payable 1,280 1,112 1,285
Income taxes payable 1,485 3,428 5,924
--------- --------- ---------
29,584 25,651 31,981
Future income taxes 15,396 14,985 14,016
Pension liability 3,432 3,171 3,367
-------------------------------------------------------------------------
CLASS A AND CLASS B SHAREHOLDERS' EQUITY
-------------------------------------------------------------------------
Class A and Class B shares 23,391 23,677 23,440
Contributed surplus 887 474 652
Retained earnings 155,994 133,981 148,781
--------- --------- ---------
180,272 158,132 172,873
--------- --------- ---------
$228,684 $201,939 $222,237
--------- --------- ---------
--------- --------- ---------
-------------------------------------------------------------------------
Consolidated Statements of Earnings, Comprehensive Income and Retained
Earnings
-------------------------------------------------------------------------
Unaudited Three Months
($000's except per share amounts) Ended
March 31
2007 2006
-------------------------------------------------------------------------
REVENUE $ 52,873 $ 61,195
-------------------------------------------------------------------------
COSTS AND EXPENSES
Operating and maintenance 30,156 34,527
Depreciation 4,966 4,762
Selling and administrative 4,666 5,606
--------- ---------
39,788 44,895
--------- ---------
OPERATING INCOME 13,085 16,300
--------- ---------
OTHER INCOME (EXPENSE)
Interest income 409 384
Gain on sale of joint venture interests in
rigs and other assets 103 108
Gain (loss) on foreign currency translation (96) 30
--------- ---------
416 522
--------- ---------
EARNINGS BEFORE INCOME TAXES 13,501 16,822
--------- ---------
INCOME TAXES
Current 3,034 5,035
Future 1,380 785
--------- ---------
4,414 5,820
-------------------------------------------------------------------------
NET EARNINGS AND COMPREHENSIVE INCOME 9,087 11,002
-------------------------------------------------------------------------
Retained earnings, beginning of period 148,781 124,343
Dividends declared (1,280) (1,112)
Adjustment on repurchase and cancellation of
share capital (594) (252)
-------------------------------------------------------------------------
RETAINED EARNINGS, END OF PERIOD $155,994 $133,981
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EARNINGS PER CLASS A & CLASS B SHARE
Basic $ 0.50 $ 0.59
Diluted $ 0.50 $ 0.59
-------------------------------------------------------------------------
Consolidated Statements of Cash Flows
-------------------------------------------------------------------------
Unaudited Three Months
($000's) Ended
March 31
2007 2006
-------------------------------------------------------------------------
OPERATING ACTIVITIES
-------------------------------------------------------------------------
Net earnings $ 9,087 $ 11,002
Non-cash items included in earnings
Depreciation 4,966 4,762
Future income taxes 1,380 785
Expense for defined benefit pension plan 65 69
Stock options charged to expense 235 9
Gain on sale of joint venture interests in
rigs and other assets (103) (108)
--------- ---------
Funds flow from operations 15,630 16,519
Change in non-cash working capital (26,750) (12,641)
--------- ---------
(11,120) 3,878
--------- ---------
-------------------------------------------------------------------------
INVESTING ACTIVITIES
-------------------------------------------------------------------------
Capital expenditures (9,877) (4,959)
Proceeds on sale of joint venture interests in
rigs and other assets 139 140
Change in non-cash working capital 315 (244)
--------- ---------
(9,423) (5,063)
--------- ---------
-------------------------------------------------------------------------
FINANCING ACTIVITIES
-------------------------------------------------------------------------
Increase in bank indebtedness 2,850 -
Dividends paid (1,280) (1,112)
Proceeds received on exercise of stock options - 123
Repurchase of share capital (643) (256)
Change in non-cash working capital 26 (1,769)
--------- ---------
953 (3,014)
--------- ---------
-------------------------------------------------------------------------
DECREASE IN CASH (19,590) (4,199)
-------------------------------------------------------------------------
Cash position, beginning of period 49,927 42,685
-------------------------------------------------------------------------
CASH POSITION, END OF PERIOD $ 30,337 $ 38,486
-------------------------------------------------------------------------
Interest paid during the period $ 33 $ 23
Income taxes paid during the period $ 7,473 $ 7,480
-------------------------------------------------------------------------%SEDAR: 00002868E
For further information:
For further information: Murray Roth, Vice President, Finance and Chief Financial Officer, (403) 292-7950, website: http://www.akita-drilling.com