/R E P E A T -- AKITA Drilling Ltd. Announces 2007 Earnings and Funds Flow/



    CALGARY, March 20 /CNW/ - Earnings for the year ended December 31, 2007
were $20,752,000 or $1.14 per share on revenue of $142,945,000. Comparative
figures for 2006 were $33,755,000 or $1.83 per share on revenue of
$174,543,000. Funds flow from operations for the current year was $36,992,000
as compared to $47,199,000 in 2006.
    Overall, 2007 was the weakest year in terms of rig utilization rates for
the Canadian drilling industry since 2002 and AKITA's results were affected by
that weakness. The Company's rig utilization in 2007 was 40.9% compared to the
industry average of 37.0% and AKITA's utilization of 56.6% in 2006.
    During 2007, AKITA deployed three new drilling rigs into the market. The
first rig was a 1,200 metre single that incorporated several features that
were new to AKITA's fleet, but which will be incorporated into any additional
rigs that the Company may add in the future in a similar depth capacity.
Although operations for this rig are not governed under a long-term contract
arrangement, it was able to generate 29% more operating days than the average
AKITA rig in its depth range.
    In addition to the new concept single rig noted above, AKITA completed
the construction of two new 3,000 metre pad-style drilling rigs suitable for
drilling heavy oil. The first pad-style drilling rig commenced its multi-year
term contract midway through the second quarter, while the other pad-style
drilling rig, which does not have a term contract associated with it,
commenced drilling operations in late August.
    In light of current weaker market conditions, the Company does not have
immediate plans to increase its fleet size. AKITA remains poised, with the
financial and other resources it has at its disposal, to respond to market
opportunities, as they arise. At December 31, 2007 the Company had $49 Million
in working capital, including $43 Million of cash and no long-term debt.
    For the second year in a row, AKITA benefited from a reduction in future
income taxes as a result of government announcements for future income tax
rates. The positive impact to earnings was $2,099,000 in 2007 compared to
$1,943,000 in 2006.
    Selected financial information for the Company is as follows:

    
    Consolidated Balance Sheets

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    December 31 (Dollars in thousands)                    2007          2006
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    Assets
    Current assets
      Cash and cash equivalents                     $   43,166    $   49,927
      Accounts receivable                               22,505        38,529
      Other                                                272           206
                                                   --------------------------
                                                        65,943        88,662

    Restricted cash                                      5,000             -
    Capital assets                                     152,579       133,575
                                                   --------------------------

                                                    $  223,522    $  222,237
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    Liabilities
    Current liabilities
      Accounts payable and accrued liabilities      $   13,051    $   24,772
      Dividends payable                                  1,279         1,285
      Income taxes payable                                 873         5,924
      Deferred revenue                                   1,617             -
                                                   --------------------------
                                                        16,820        31,981
    Future income taxes                                 15,055        14,016
    Pension liability                                    3,609         3,367

    Class A and Class B Shareholders' Equity
    Class A and Class B shares                          23,369        23,440
    Contributed surplus                                  1,110           652
    Retained earnings                                  163,559       148,781
                                                   --------------------------
                                                       188,038       172,873
                                                   --------------------------

                                                    $  223,522    $  222,237
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    Consolidated Statements of Earnings,
    Comprehensive Income and Retained Earnings

    -------------------------------------------------------------------------
    Year ended December 31
    (Dollars in thousands, except per share)              2007          2006
    -------------------------------------------------------------------------

    Revenue                                         $  142,945    $  174,543
                                                   --------------------------
    Costs and expenses
      Operating and maintenance                         85,108        99,970
      Depreciation                                      15,403        14,211
      Selling and administrative                        15,774        15,187
                                                   --------------------------
                                                       116,285       129,368
                                                   --------------------------
      Operating income                                  26,660        45,175
                                                   --------------------------
    Other income (expense)
      Interest income                                    1,392         1,937
      Gain on sale of joint venture interests
       in rigs and other assets                            902         1,057
      Gain (loss) on foreign currency translation         (814)          (40)
                                                   --------------------------
                                                         1,480         2,954
                                                   --------------------------
    Earnings before income taxes                        28,140        48,129
                                                   --------------------------
    Income taxes
      Current                                            6,349        14,558
      Future                                             1,039          (184)
                                                   --------------------------
                                                         7,388        14,374
                                                   --------------------------
    Net earnings and Comprehensive Income               20,752        33,755

    Retained earnings, beginning of year               148,781       124,343
    Dividends declared                                  (5,117)       (4,613)
    Adjustment on repurchase and
     cancellation of share capital                        (857)       (4,704)

                                                   --------------------------
    Retained earnings, end of year                  $  163,559    $  148,781
    -------------------------------------------------------------------------
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    Earnings per Class A and Class B share
      Basic                                         $     1.14    $     1.83
      Diluted                                       $     1.13    $     1.81
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    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
    Year ended December 31 (Dollars in thousands)         2007          2006
    -------------------------------------------------------------------------

    Operating activities
    Net earnings                                    $   20,752    $   33,755
    Non-cash items included in earnings
      Depreciation                                      15,403        14,211
      Future income taxes                                1,039          (184)
      Expense for defined benefit pension plan             242           265
      Stock options charged to expense                     458           169
      Gain on sale of joint venture interests
       in rigs and other assets                           (902)       (1,017)
                                                   --------------------------
    Funds flow from operations                          36,992        47,199
    Change in non-cash working capital                   1,884        13,953
                                                   --------------------------
                                                        38,876        61,152
                                                   --------------------------
    Investing activities
    Capital expenditures                               (40,948)      (49,698)
    Proceeds on sales of joint venture interests
     in rigs and other assets                            7,443         9,043
    Cash restricted for loan guarantees                 (5,000)            -
    Reduction in investments                                 -            55
    Change in non-cash working capital                  (1,081)          514
                                                   --------------------------
                                                       (39,586)      (40,086)
                                                   --------------------------
    Financing activities
    Dividends paid                                      (5,117)       (4,448)
    Repurchase of share capital                           (928)       (5,009)
    Increase (decrease) in bank indebtedness                 -        (4,400)
    Proceeds received on exercise of stock options           -           205
    Change in non-cash working capital                      (6)         (172)
                                                   --------------------------
                                                        (6,051)      (13,824)
                                                   --------------------------
    Increase (decrease) in cash                         (6,761)        7,242
    Cash position, beginning of year                    49,927        42,685
                                                   --------------------------
    Cash position, end of year                      $   43,166    $   49,927
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    Interest paid during the year                   $      376    $       72
    Income taxes paid during the year               $   11,400    $   14,495
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For further information:

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


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