AKITA announces first quarter results with net loss of $2.4 million.

CALGARY, AB, May 5, 2026 /CNW/ - AKITA Drilling Ltd. (TSX: AKT.A)

AKITA Drilling Ltd. ("AKITA" or the "Company") announces a net loss of $2.4 million for the three months ended March 31, 2026, compared to $8.6 million for the same period in 2025. The reduction in net income between the two quarters was mainly attributable to decreased activity in both of the Company's divisions, as operating days declined by 15% in Canada and 36% in the US. This decrease in net income was further impacted by an increase in share-based compensation, which was $2.2 million in the first quarter of 2026 compared to $0.3 million in the same period of 2025, a result of AKITA's improved share price. Funds flow from operations decreased to $7.9 million in the first quarter of 2026 from $17.0 million in the first quarter of 2025.  Net cash from operations decreased to $1.7 million for the three months ended March 31, 2026, compared to $9.0 million in the same period of 2026, with a higher working capital build and lower net income in the first quarter of 2026.

Colin Dease, AKITA's President and Chief Executive Officer stated: "Although first quarter results were below expectations, doubling our active US rig count from 5 to 10 during the quarter sets us up for a stronger second half of the year. When combined with the potential Fox acquisition disclosed on April 27, 2028, the second half of the year could be very strong for AKITA."

Capital expenditures, which included routine capital items, decreased to $3.8 million in the first quarter of 2026, from $7.0 million in the first quarter of 2025. Total debt decreased to $34.8 million at the end of the first quarter of 2026 from $51.9 million at March 31, 2025.

CONSOLIDATED FINANCIAL HIGHLIGHTS

	For the Three Months Ended March 31,
$Thousands, except per share amounts	2026	2025	Change	% Change
Revenue	55,491	65,086	(9,595)	(15 %)
Operating and maintenance expenses	41,975	46,028	(4,053)	(9 %)
Operating margin	13,516	19,058	(5,542)	(29 %)
Margin %	24 %	29 %	(5 %)	(17 %)
Net cash from operating activities	1,736	9,009	(7,273)	(81 %)
Adjusted funds flow from operations^(1)	7,957	17,029	(9,072)	(53 %)
Per share	0.21	0.43	(0.22)	(51 %)
Net Income (loss)	(2,450)	8,632	(11,082)	(128 %)
Per share	(0.06)	0.22	(0.28)	(127 %)
Capital expenditures	3,765	7,008	(3,243)	(46 %)
Weighted average shares outstanding	38,765	39,734	(969)	(2 %)
Total assets	250,265	275,467	(25,202)	(9 %)
Total debt	34,774	51,948	(17,174)	(33 %)
^(1) See "Non-GAAP and Supplementary Financial Measures" near the end of this release for further detail.

Canadian Drilling Division

	For the Three Months Ended March 31,
$Thousands, except per day amounts	2026	2025	Change	% Change
Revenue Canada	32,773	23,664	9,109	38 %
Revenue from joint venture drilling rigs	-	13,010	(13,010)	(100 %)
Flow through charges^(1)	(1,593)	(1,054)	(539)	(51 %)
Adjusted revenue Canada^(1)	31,180	35,620	(4,440)	(12 %)
Operating and maintenance expenses Canada	23,232	16,372	6,860	42 %
Operating and maintenance expenses from joint venture drilling rigs	-	9,361	(9,361)	(100 %)
Flow through charges^(1)	(1,593)	(1,054)	(539)	(51 %)
Adjusted operating and maintenance expenses Canada	21,639	24,679	(3,040)	(12 %)
Adjusted operating margin Canada^(1)	9,541	10,941	(1,400)	(13 %)
Margin %^(1)	31 %	31 %	0 %	0 %
Operating days	787	928	(141)	(15 %)
Adjusted revenue per operating day^(1)	39,619	38,384	1,235	3 %
Adjusted operating and maintenance expenses per operating day^(1)	27,496	26,594	902	3 %
Adjusted operating margin per operating day^(1)	12,123	11,790	333	3 %
Utilization^(1)	51 %	61 %	(10 %)	(16 %)
Rig count	17	17	-	0 %
^(1) See "Non-GAAP and Supplementary Financial Measures" near the end of this release for further detail.

The Company's Canadian division saw weaker activity in the first quarter of 2026 when compared to the first quarter of 2025. The division worked 787 (2025 – 928) operating days in the first quarter of 2026, which corresponds to a utilization rate of 51% (2025 - 61%), compared to an industry utilization of 58% (2025 - 54%).

Effective January 1, 2026, AKITA amended its joint venture agreements, resulting in their classification as joint operations. Accordingly, beginning in 2026, these arrangements are proportionately consolidated into the relevant line items in the financial statements, rather than being presented as a single line item, with all associated revenues and expenses included in their respective financial statement line items. Comparative figures for 2025 continue to be accounted for using the equity method. Adjusted revenue in Canada decreased to $31,180,000 in the first quarter of 2026 from $35,620,000 in the first quarter of 2025. This decrease in adjusted revenue was attributable to decreased activity. AKITA's double rigs saw the largest decrease in activity, making up 59% of the decrease between the two quarters, while AKITA's single rigs accounted for 33% of the decrease. With a higher percentage of triple rigs working in the first quarter of 2026, adjusted revenue per operating day increased to $39,619, up from $38,384 in the same period of 2025.

Adjusted operating and maintenance expenses decreased 12% to $21,639,000 in the first quarter of 2026 from $24,679,000 in the same period of 2025, primarily due to fewer operating days in the first quarter of 2026. Adjusted operating and maintenance expense per operating day increased 3% in the first quarter of 2026 compared to the first quarter of 2025, reflecting a higher proportion of higher cost rigs in AKITA's 2026 rig mix.

As the increase in adjusted revenue per operating day outpaced the increase in adjusted operating and maintenance expenses per operating day, adjusted operating margin per operating day increased in the quarter, due to the higher proportion of higher-margin rigs in operation.

United States Drilling Division

	For the Three Months Ended March 31,
$Thousands, except per day amounts	2026	2025	Change	% Change
Revenue US	22,718	41,422	(18,704)	(45 %)
Flow through charges^(1)	(1,759)	(5,510)	3,751	68 %
Adjusted revenue US(1)	20,959	35,912	(14,953)	(42 %)
Operating and maintenance expenses US	18,742	29,655	(10,913)	(37 %)
Flow through charges^(1)	(1,759)	(5,510)	3,751	68 %
Adjusted operating and maintenance expenses US	16,983	24,145	(7,162)	(30 %)
Adjusted operating margin US(1)	3,976	11,767	(7,791)	(66 %)
Margin %^(1)	19 %	33 %	(14 %)	(42 %)
Operating days	590	919	(329)	(36 %)
Adjusted revenue per operating day^(1)	35,524	39,077	(3,553)	(9 %)
Adjusted operating and maintenance expenses per operating day^(1)	28,785	26,273	2,512	10 %
Adjusted operating margin per operating day^(1)	6,739	12,804	(6,065)	(47 %)
Utilization^(1)	44 %	68 %	(24 %)	(35 %)
Rig count	15	15	-	0 %
^(1) See "Non-GAAP and Supplementary Financial Measures" near the end of this release for further detail.

AKITA's US division was less active in the first quarter of 2026 compared to the first quarter of 2025, with a decrease of 329 operating days to 590, however, activity increased from the fourth quarter of 2025 (475 operating days) as rigs started to go back to work.

Adjusted revenue per operating day decreased to $35,524 in the first quarter of 2026 from $39,077 in the first quarter of 2025. This decrease is due to two factors: incidental drill pipe recovery revenue of $1,293,000 received in the first quarter of 2025, and general rate reductions over 2025 and into 2026 due to excess capacity in the industry.

Adjusted operating expense per operating day increased to $28,785 per day in the first quarter of 2026 from $26,273 in the first quarter of 2025. This increase reflects both the costs associated with returning rigs to service and the impact of fixed costs being spread over fewer operating days. 

Although results for the first quarter of 2026 were significantly lower than those of the first quarter of 2025, AKITA's active rigs in the US doubled during the quarter, increasing from five active rigs to ten active rigs.

FURTHER INFORMATION

This news release shall be used as preparation for reading the full disclosure documents. AKITA's unaudited interim condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2026 will be available on the AKITA website (www.akita-drilling.com) or via SEDAR (www.sedarplus.ca) or can be requested in print from the Company.

Non-GAAP and Supplementary Financial Measures

Non-GAAP Financial Measures

Adjusted Revenue and Adjusted Operating and Maintenance Expenses

Revenue and operating and maintenance expenses in AKITA's Canadian operating segment include revenue and expenses from AKITA's wholly-owned drilling rigs as well as its share of joint venture revenue and expenses. Excluded from the revenue and expenses in AKITA's Canadian and US operating segments are flow through charges that are billed to operators and repaid to the Company. The volume and timing of the flow through charges can artificially impact the operational per day analysis and as a result management and certain investors may find the comparability between periods is improved when these flow through charges are excluded from revenue per day and operating and maintenance expense per day. The flow through charges do not have any impact on the Company's net earnings as the amounts offset each other.

Adjusted Funds Flow from Operations and Adjusted EBITDA

Adjusted funds flow from operations is not a recognized GAAP measure under IFRS and readers should note that AKITA's method of determining adjusted funds flow from operations may differ from methods used by other companies, and includes cash flow from operating activities before working capital changes, equity income from joint ventures, and income tax amounts paid or recovered during the period.  Nonetheless, management and certain investors may find adjusted funds flow from operations to be a useful measurement to evaluate the Company's operating results at year-end and within each year, since the seasonal nature of the business affects the comparability of non-cash working capital changes both between and within periods. Adjusted earnings before interest and finance costs, taxes, depreciation and amortization, other non-cash items and one-time gains and losses ("Adjusted EBITDA") is not a recognized GAAP measure under IFRS and readers should note that AKITA's method of determining adjusted EBITDA may differ from methods used by other companies, and removes the aspect of how the Company finances its operations from adjusted funds flow from operations.

	For the Three Months Ended March 31,
$Thousands	2026	2025
Net cash from operating activities	1,736	9,009
Interest paid	631	888
Interest expense	(679)	(936)
Post-employment benefits paid	79	79
Equity income from joint ventures	-	3,502
Unrealized loss on foreign exchange	(212)	(17)
Change in non-cash working capital	6,402	4,504
Adjusted funds flow from operations	7,957	17,029

Non-GAAP Ratios

"Adjusted funds flow from operations per share" is calculated on the same basis as net loss per class A and class B share basic and diluted, utilizing the basic and diluted weighted average number of class A and class B shares outstanding during the periods presented.

"Adjusted revenue per operating day" may be useful to analysts, investors, other interested parties and management as a measure of pricing strength and is calculated by dividing adjusted revenue by the number of operating days for the period.

"Adjusted operating and maintenance expenses per operating day" may be useful to analysts, investors, other interested parties and management as it demonstrates a degree of cost control and provides a proxy for specific inflation rates incurred by the Company

FORWARD-LOOKING INFORMATION:

Certain statements contained in this news release may constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", and similar expressions. In particular, forward-looking information in this news release includes, but is not limited to, references to the outlook for the drilling industry (including activity levels and day rates), the Company's relationships and customers and vendors, advantages associated with the percentage of pad drilling rigs in the Company's Canadian drilling fleet, the outlook for the Company's US division, the renewal of drilling contracts, and debt repayment.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.

Although the Company believes that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. By their nature, these forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and therefore carry the risk that the predictions and other forward-looking statements will not be realized.  Readers of this news release are cautioned not to place undue reliance on these statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, estimates and intentions expressed in such forward-looking statements.

The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of, among other things, prevailing economic conditions; the level of exploration and development activity carried on by AKITA's customers, world crude oil prices and North American natural gas prices; global liquefied natural gas (LNG) demand, weather, access to capital markets; and government policies.  We caution that the foregoing list of factors is not exhaustive and that while 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, prior to making a decision to invest in AKITA.  Except where required by law, the Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by it or on its behalf.

SOURCE AKITA Drilling Ltd.

INVESTOR INQUIRIES: Darcy Reynolds, CPA, CA, Vice President, Finance and Chief Financial Officer, [phone]