CALGARY, July 31 /CNW/ - AKITA Drilling Ltd. announced second quarter
earnings and funds flow today. AKITA Drilling Ltd.'s net earnings for the six
months ended June 30, 2007 were $12,178,000 or $0.67 per share on revenue of
$80,218,000. Comparative figures for 2006 were $18,550,000 or $1.00 per share
of net earnings on revenue of $94,124,000. Funds flow from operations for the
period was $21,683,000 compared to $25,277,000 in 2006.
Earnings for the three months ended June 30, 2007 were $3,091,000 ($0.17
per share) on revenue of $27,345,000 compared with $7,548,000 ($0.41 per
share) on revenue of $32,929,000 in 2006. Funds flow from operations for the
quarter ended June 30, 2007 was $6,053,000 compared to $8,758,000 in the
corresponding quarter in 2006.
Operating statistics for the first six 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)
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Canadian 2007 39 35.575 487 3,122 N/A
Drilling 2006 37 34.075 632 4,253 N/A
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Alaskan 2007 3 1.5 3 131 N/A
Drilling 2006 1 0.5 3 88 N/A
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Canadian 2007 3 1.5 25 N/A 1,221
Well
Servicing 2006 3 1.5 30 N/A 2,898
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-------------------------------------------------------------------------AKITA added two heavy oil pad rigs to its fleet during the second
quarter. The first rig commenced its multi-year term contract midway through
the quarter, while the second rig, which does not have a term contract
associated with it, is expected to commence drilling operations later in the
third quarter. The Company does not have any immediate plans to increase its
fleet size at this time. AKITA remains poised, with the financial and other
resources it has at its disposal, to respond to market opportunities, as they
arise.
Management anticipates that demand for rigs in all depth ranges will
continue to lag behind last year's activity levels. To date, activity levels
for shallow, deep and northern rig categories have been the most adversely
affected. Heavy oil pad rigs and, to a lesser extent, medium depth capacity
rigs, have been more modestly impacted by the lower demand. Management
anticipates that overall market conditions will not improve significantly
until an improved forecast for natural gas is broadly accepted by the
Company's customers.
Financial results for the first six months are as follows:-------------------------------------------------------------------------
Consolidated Balance Sheets
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June 30 December 31
Unaudited ($000's) 2007 2006 2006
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Assets
Current assets
Cash $ 35,629 $ 54,537 $ 49,927
Accounts receivable 28,527 33,746 38,529
Other 1,101 1,761 206
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65,257 90,044 88,662
Investments - 55 -
Capital assets 151,508 116,389 133,575
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$ 216,765 $ 206,488 $ 222,237
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Liabilities
Current liabilities
Accounts payable and accrued
liabilities $ 11,668 $ 21,071 $ 24,772
Deferred revenue 1,566 - -
Dividends payable 1,279 1,113 1,285
Income taxes payable 1,172 3,670 5,924
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15,685 25,854 31,981
Future income taxes 15,626 13,358 14,016
Pension liability 3,498 3,237 3,367
Class A and Class B shareholders' Equity
Class A and Class B shares 23,376 23,722 23,440
Contributed surplus 962 505 652
Retained earnings 157,618 139,812 148,781
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181,956 164,039 172,873
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$ 216,765 $ 206,488 $ 222,237
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Consolidated Statements of Earnings,
Comprehensive Income and Retained Earnings
-------------------------------------------------------------------------
Three Months Six Months
Unaudited Ended Ended
($000's except June 30 June 30
per share amounts) 2007 2006 2007 2006
-------------------------------------------------------------------------
Revenue $ 27,345 $ 32,929 $ 80,218 $ 94,124
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Costs and expenses
Operating and
maintenance 16,006 18,358 46,162 52,885
Depreciation 2,622 3,093 7,588 7,855
Selling and
administrative 4,011 3,653 8,677 9,259
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22,639 25,104 62,427 69,999
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Operating income 4,706 7,825 17,791 24,125
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Other income (expenses)
Interest income 375 525 784 909
Gain on sale of joint
venture interests in
rigs and other assets 31 335 134 443
Gain (loss) on foreign
currency translation (521) (131) (617) (101)
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(115) 729 301 1,251
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Earnings before income
taxes 4,591 8,554 18,092 25,376
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Income taxes
Current 1,270 2,633 4,304 7,668
Future 230 (1,627) 1,610 (842)
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1,500 1,006 5,914 6,826
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Net earnings and
comprehensive income 3,091 7,548 12,178 18,550
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Retained earnings,
beginning of period 155,994 133,981 148,781 124,343
Dividends declared (1,285) (1,113) (2,565) (2,225)
Adjustment on repurchase
and cancellation of
share capital (182) (604) (776) (856)
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Retained earnings, end of
period $ 157,618 $ 139,812 $ 157,618 $ 139,812
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Earnings per Class A and
Class B share
Basic $ 0.17 $ 0.41 $ 0.67 $ 1.00
Diluted $ 0.16 $ 0.40 $ 0.66 $ 0.99
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Consolidated Statements of Cash Flows
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Three Months Six Months
Ended Ended
June 30 June 30
Unaudited ($000's) 2007 2006 2007 2006
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Operating activities
Net earnings $ 3,091 $ 7,548 $ 12,178 $ 18,550
Non-cash items included
in earnings
Depreciation 2,622 3,093 7,588 7,855
Future income taxes 230 (1,627) 1,610 (842)
Expense for defined
benefit pension plan 66 66 131 135
Stock options charged to
expense 75 13 310 22
Gain on sale of joint
venture interests in
rigs and other assets (31) (335) (134) (443)
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Funds flow from operations 6,053 8,758 21,683 25,277
Change in non-cash
working capital 20,021 19,067 (6,729) 6,426
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26,074 27,825 14,954 31,703
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Investing activities
Capital expenditures (15,681) (13,300) (25,558) (18,259)
Proceeds on sale of joint
venture interests in rigs
and other assets 32 432 171 572
Change in non-cash working
capital (775) 902 (460) 658
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(16,424) (11,966) (25,847) (17,029)
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Financing activities
Increase (decrease) in
bank indebtedness (2,850) - - -
Dividends paid (1,285) (1,113) (2,565) (2,225)
Proceeds received on
exercise of stock options - 82 - 205
Repurchase of share
capital (197) (623) (840) (879)
Change in non-cash working
capital (26) 1,846 - 77
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(4,358) 192 (3,405) (2,822)
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Increase (decrease) in
cash 5,292 16,051 (14,298) 11,852
Cash position, beginning
of period 30,337 38,486 49,927 42,685
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Cash position, end of
period $ 35,629 $ 54,537 $ 35,629 $ 54,537
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Interest paid during the
period $ 6 $ - $ 39 $ -
Income taxes paid during
the period $ 1,583 $ 2,391 $ 9,056 $ 9,871
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