CALGARY, April 28 /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, 2008 were $7,647,000 or $0.42 per share on
revenue of $48,126,000. Comparative figures for 2007 were earnings of
$9,087,000 or $0.50 per share on revenue of $52,873,000. Funds flow for the
period was $14,458,000 compared to $15,630,000 in 2007.
Weaker market conditions continued into the first quarter of 2008,
resulting in lower contribution margins for all rig categories. Operating
statistics for the first three months of 2008 and 2007 are as follows:-------------------------------------------------------------------------
Number of
Number of Rigs Wells Operating Operating
------------------ Drilled or Days Hours
Gross Net Serviced (Drilling) (Servicing)
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Canadian 2008 38 34.575 280 2,043 N/A
Drilling 2007 37 35.075 313 2,085 N/A
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Alaskan 2008 3 1.5 1 58 N/A
Drilling 2007 3 1.5 1 59 N/A
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Total 2008 41 36.075 281 2,101 N/A
Drilling -----------------------------------------------------------
2007 40 36.575 314 2,144 N/A
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Canadian Well 2008 3 1.5 14 N/A 353
Servicing 2007 3 1.5 24 N/A 1,128
-------------------------------------------------------------------------On April 5, 2008, the Company's management and employees were recognized
for their achievement in safety by being awarded a CAODC Safety Leadership
Award at the Annual CAODC Safety Banquet. This was the eighth time in
nine years that AKITA's safety performance has been recognized by the
industry.
Recently improved natural gas prices along with record crude oil prices
are starting to provide a basis for optimism with respect to increased
activity for drilling and well servicing. Historically, utilization rate
improvements have preceded any meaningful recovery in day rates. Management
does not anticipate substantial recovery from the impact of the current
downturn prior to the fourth quarter of this year.
Financial results for the first quarter are as follows:Consolidated Balance Sheets
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March 31 December 31
($000's) 2008 2007 2007
(Unaudited) (Audited)
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ASSETS
Current assets
Cash $ 39,841 $ 30,337 $ 43,166
Accounts receivable 40,450 58,405 22,505
Other 1,550 1,492 272
--------------------------------
81,841 90,234 65,943
Restricted cash 5,000 - 5,000
Capital assets 147,575 138,450 152,579
--------------------------------
$234,416 $228,684 $223,522
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LIABILITIES
Current liabilities
Bank indebtedness $ - $ 2,850 $ -
Accounts payable and accrued liabilities 15,902 22,237 13,051
Deferred revenue 1,741 1,732 1,617
Dividends payable 1,279 1,280 1,279
Income taxes payable 1,147 1,485 873
--------------------------------
20,069 29,584 16,820
Future income taxes 16,200 15,396 15,055
Pension liability 3,674 3,432 3,609
CLASS A AND CLASS B SHAREHOLDERS' EQUITY
Class A and Class B shares 23,369 23,391 23,369
Contributed surplus 1,177 887 1,110
Retained earnings 169,927 155,994 163,559
--------------------------------
194,473 180,272 188,038
--------------------------------
$234,416 $228,684 $223,522
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Consolidated Statements of Earnings, Comprehensive
Income and Retained Earnings
-------------------------------------------------------------------------
Unaudited Three Months
($000's except per share amounts) Ended
March 31
2008 2007
-------------------------------------------------------------------------
REVENUE $ 48,126 $ 52,873
---------------------
COSTS AND EXPENSES
Operating and maintenance 27,742 30,156
Depreciation 5,551 4,966
Selling and administrative 4,344 4,666
---------------------
37,637 39,788
---------------------
OPERATING INCOME 10,489 13,085
---------------------
OTHER INCOME (EXPENSE)
Interest income 477 409
Gain on sale of joint venture interests
in rigs and other assets 17 103
Gain (loss) on foreign currency translation 67 (96)
---------------------
561 416
---------------------
EARNINGS BEFORE INCOME TAXES 11,050 13,501
---------------------
INCOME TAXES
Current 2,258 3,034
Future 1,145 1,380
---------------------
3,403 4,414
---------------------
NET EARNINGS AND COMPREHENSIVE INCOME 7,647 9,087
---------------------
Retained earnings, beginning of period 163,559 148,781
Dividends declared (1,279) (1,280)
Adjustment on repurchase and
cancellation of share capital - (594)
---------------------
RETAINED EARNINGS, END OF PERIOD $169,927 $155,994
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EARNINGS PER CLASS A & CLASS B SHARE
Basic $ 0.42 $ 0.50
Diluted $ 0.42 $ 0.50
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Consolidated Statements of Cash Flows
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Unaudited Three Months
($000's) Ended
March 31
2008 2007
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OPERATING ACTIVITIES
Net earnings $ 7,647 $ 9,087
Non-cash items included in earnings
Depreciation 5,551 4,966
Future income taxes 1,145 1,380
Expense for defined benefit pension plan 65 65
Stock options charged to expense 67 235
Gain on sale of joint venture interests
in rigs and other assets (17) (103)
---------------------
Funds flow from operations 14,458 15,630
Change in non-cash working capital (15,783) (26,750)
---------------------
(1,325) (11,120)
---------------------
INVESTING ACTIVITIES
Capital expenditures (554) (9,877)
Proceeds on sale of joint venture interests
in rigs and other assets 24 139
Change in non-cash working capital (191) 315
---------------------
(721) (9,423)
---------------------
FINANCING ACTIVITIES
Increase in bank indebtedness - 2,850
Dividends paid (1,279) (1,280)
Proceeds received on exercise of stock options - -
Repurchase of share capital - (643)
Change in non-cash working capital - 26
---------------------
(1,279) 953
---------------------
DECREASE IN CASH (3,325) (19,590)
Cash position, beginning of period 43,166 49,927
---------------------
CASH POSITION, END OF PERIOD $ 39,841 $ 30,337
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Interest paid during the period $ 8 $ 33
Income taxes paid during the period $ 1,985 $ 7,473
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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.
%SEDAR: 00002868E
