AKITA Drilling Ltd. Announces First Quarter Results

CALGARY, April 30 /CNW/ - AKITA Drilling Ltd.'s net earnings for the three months ended March 31, 2010 were $1,015,000 or $0.06 per share on revenue of $33,235,000. Comparative figures for 2009 were earnings of $3,908,000 or $0.21 per share on revenue of $41,696,000. Funds flow from operations for the period was $7,066,000 compared to $12,051,000 in 2009.

Weak market conditions continued into the first quarter of 2010, resulting in lower than anticipated margins for the first quarter. Operating statistics for the first three months of 2010 and 2009 are as follows:

    
    -------------------------------------------------------------------------
                                        Number of Rigs        Operating Days
                                      Gross          Net      (Year to Date)
    -------------------------------------------------------------------------
    Canada                 2010         37         33.725          1,701
                          ---------------------------------------------------
                           2009         38         35.725          1,472
    -------------------------------------------------------------------------
    United States          2010          2            1.5              0
                          ---------------------------------------------------
                           2009          3            1.5            201
    -------------------------------------------------------------------------
    Total                  2010         39         35.225          1,701
                          ---------------------------------------------------
                           2009         41         37.225          1,673
    -------------------------------------------------------------------------
    

Management is cautiously optimistic that drilling activity will increase in the second quarter of 2010. However, continued pressure on margins is anticipated until North American natural gas prices increase. The Company continues to pursue oil and gas opportunities across selected North American locations in addition to marketing rigs for potash projects. The demand for the Company's pad rigs remains a bright spot in this difficult market.

The Company has a strong balance sheet and has a broad range of first-class equipment, including eight pad rigs and three conventional rigs undergoing pad rig retrofits, and personnel to meet our customer requirements, both for the current market and as opportunities arise.

Selected financial information for the Company is as follows:

    
    -------------------------------------------------------------------------
    Consolidated Balance Sheets
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Unaudited                                     March 31       December 31
    ($000's)                                  2010        2009       2009
    -------------------------------------------------------------------------
    Assets
    Current Assets
      Cash and cash equivalents            $  28,801   $  46,347   $  34,142
      Term deposits                           20,987           -      18,000
      Accounts receivable                     39,070      45,608      28,523
      Income taxes recoverable                     -          29         330
      Other                                    1,284       1,842         421
                                          -----------------------------------

    Restricted cash                            2,500       5,000       5,000
    Capital assets                           142,747     153,794     147,799
                                          -----------------------------------
                                           $ 235,389   $ 252,620   $ 234,215
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current Liabilities
      Accounts payable and accrued
       liabilities                         $  11,234   $  22,071   $  10,123
      Deferred revenue                           952       3,777         197
      Dividends payable                        1,277       1,276       1,277
      Income taxes payable                       188           -           -
                                          -----------------------------------
                                              13,651      27,124      11,597

    Class A and Class B Shareholders'
     Equity
    Class A and Class B shares                23,376      23,327      23,376
    Contributed surplus                        2,271       2,271       2,271
    Accumulated other comprehensive income      (367)        132        (354)
    Retained earnings                        175,891     175,510     176,153
                                          -----------------------------------

                                             201,171     201,240     201,446
                                          -----------------------------------
                                           $ 235,389   $ 252,620   $ 234,215
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Consolidated Statements of Earnings and Retained Earnings
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Unaudited                                                Three Months
    ($000's except per share amounts)                       Ended March 31
                                                           2010        2009
    -------------------------------------------------------------------------
    Revenue                                            $  33,235   $  41,696
                                                      -----------------------
    Costs and expenses
      Operating and maintenance                           21,690      25,150
      Depreciation                                         6,656       6,580
                                                      -----------------------
                                                          31,994      36,126
                                                      -----------------------
    Revenue less costs and expenses                        1,241       5,570
                                                      -----------------------

    Other income
      Interest income                                        122         215
      Gain on sale of joint venture interests
       in rigs and other assets                                -          21
      Gain on foreign currency translation                     -           2
                                                      -----------------------
                                                             122         238
                                                      -----------------------
    Earnings before income taxes                           1,363       5,808
                                                      -----------------------

    Income taxes
      Current                                                977         334
      Future                                                (629)      1,566
                                                      -----------------------
    Net Earnings                                           1,015       3,908
                                                      -----------------------

    Retained earnings, beginning of period               176,153     172,878
    Dividends declared                                    (1,277)     (1,276)

                                                      -----------------------
    Retained Earnings, End of Period                   $ 175,891   $ 175,510
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per Class A and Class B Share
      Basic                                            $    0.06   $    0.21
      Diluted                                          $    0.06   $    0.21
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Consolidated Statements of Cash Flows
    -------------------------------------------------------------------------
    Unaudited                                                Three Months
    ($000's)                                                Ended March 31
                                                           2010        2009
    -------------------------------------------------------------------------
    Operating Activities
    Earnings from continuing operations                $   1,015   $   3,908
    Non-cash items included in earnings
      Depreciation                                         6,656       6,580
      Future income taxes                                   (629)      1,566
      Expense for defined benefit pension plan                24          18
      Gain on sale of joint venture interests
       in rigs and other assets                                -         (21)
                                                      -----------------------
    Funds flow from operations                             7,066      12,051
    Change in non-cash working capital                    (9,716)       (793)
                                                      -----------------------
                                                          (2,650)     11,258
                                                      -----------------------
    Investing Activities
    Capital expenditures                                  (1,604)     (7,358)
    Reduction in cash restricted for loan guarantees       2,500           -
    Proceeds on sale of joint venture interests
     in rigs and other assets                                  -          49
    Change in non-cash working capital                    (2,297)      1,359
                                                      -----------------------
                                                          (1,401)     (5,950)
                                                      -----------------------
    Financing Activities
    Dividends paid                                        (1,277)     (1,276)
    Proceeds received on exercise of stock options             -          15
                                                      -----------------------
                                                          (1,277)     (1,261)
                                                      -----------------------
    Foreign currency translation                             (13)        132
                                                      -----------------------
    Increase in Cash                                      (5,341)      4,179
    Cash position, beginning of period                    34,142      42,168

                                                      -----------------------
    Cash Position, End of Period                       $  28,801   $  46,347
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Interest paid during the period                    $       2   $       8
    Income taxes paid during the period                $     458   $   1,985
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Consolidated Statements of Comprehensive Income
    -------------------------------------------------------------------------
    Unaudited                                                Three Months
    ($000's)                                                Ended March 31
                                                           2010        2009
    -------------------------------------------------------------------------

    Net Earnings                                       $   1,015   $   3,908

    Other comprehensive income
      Foreign currency translation adjustment                (13)        132
                                                      -----------------------
    Comprehensive Income                               $   1,002   $   4,040
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

%SEDAR: 00002868E

SOURCE AKITA Drilling Ltd.

For further information: For further information: Mr. Murray Roth, Vice President Finance, (403) 292-7950, Website: http://www.akita-drilling.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890