Pantera Drilling Income Trust Announces Results for the Second Quarter and Expanded 2008 Capital Program and Declares August Distribution


    (TSX: RIG.UN)

    CALGARY, Aug. 14 /CNW/ - Pantera Drilling Income Trust ("Pantera" or the
"Trust") is pleased to release its second quarter 2008 financial and operating
results. Additional information relating to the Trust, including the Trust's
financial statements and management's discussion and analysis for the three
and six months ended June 30, 2008 will be available by August 15, 2008 under
the Trust's profile on SEDAR at or the Trust's website at
    Pantera's utilization rate was higher in the second quarter of 2008 at
18% as compared to 2% in 2007, which resulted in an increase in revenue of
175% to $3.3 million for the three months ended June 30, 2008 from
$1.2 million for the prior year. Pantera recorded a net loss for the
three months ended June 30, 2008 of $780,100 as compared with a net loss of
$1.1 million in 2007, an improvement of 28%.
    Pantera's utilization rate for the six months ended June 30, 2008 was
34%, a significant increase over the prior year of 14%, and consistent with
the industry average of 37%. Revenue for the six months ended June 30, 2008
was $11.3 million as compared with $13.6 million in 2007, a decrease of 16%
primarily due to lower day rates. And on a year to date basis Pantera recorded
net earnings of $483,000 in 2008 as compared with $2.0 million in 2007. This
decrease was largely due to a combination of lower day rates and higher
repairs and other operating costs.
    Activity continues to improve and as at August 13, 2008, Pantera's fleet
of seven rigs is fully utilized. Six of the seven rigs are located in Western
Canada and are currently working with commitments to spring break-up 2009. The
seventh rig, located in Ontario, continues to be busy on short term contracts
and is committed into Q4 2008 at this time. Of the six rigs operating in
Western Canada, four are under contracts of greater than one year length, and
two of those contracts contain minimum day commitments.
    The Board recently approved an increase of $6.2 million in 2008 capital
expenditures for the acquisition of certain assets to be utilized on the
Trust's own rigs that are typically rented by the Trust's customers, including
top drives, hevi-wate drill pipe and other ancillary equipment. Contracts with
existing clients have been amended to include these capital items and
equipment which are expected to deliver a favorable return to the Trust.
Pantera intends to finance these capital expenditures through a combination of
funds from operations, debt financing, and the possible future issuance of
trust units and other securities of the Trust. Discussions are ongoing with
certain clients regarding the provision of additional rigs or other equipment
in order to meet their needs.
    The Trust today declared a cash distribution relating to the period
August 1, 2008 to August 31, 2008, in the amount of $0.03 per trust unit
payable on September 16, 2008 to unitholders of record on August 29, 2008.
    Cash distributions are not guaranteed and will fluctuate with the
performance of its operating entity, Pantera Drilling LP, which is dependent
upon oil and natural gas prices, the level of activity in the oil and gas
industry, seasonal weather patterns, competition, major customers, third party
suppliers, key personnel and workforce availability, among other risk factors.

                     Three months ended June 30,    Six months ended June 30,
    FINANCIAL             2008       2007 Change       2008       2007 Change
    (000s, except                           (%)                           (%)
     for units and
     per unit
    Revenue              3,289      1,195   175      11,343     13,563   (16)
    Gross margin(1)        740       (170)  535       3,808      4,935   (23)
    Net earnings (loss)   (780)    (1,086)   28         483      1,980   (76)
      Per unit (basic
       and diluted)       (.12)      (.17)   29         .07        .32   (78)
    Cash flow from
     activities          3,204      7,081   (55)      3,284      5,370   (39)
      Per unit - basic     .48       1.14   (58)        .50        .87   (43)
      Per unit - diluted   .46       1.14   (60)        .49        .87   (44)
    Funds from (used in)
     operations(1)        (406)    (1,027)   60       1,599      2,860   (44)
      Per unit (basic
       and diluted)       (.06)      (.17)   65         .24        .46   (48)
    Cash distributions
     declared per unit     .09        .20   (55)        .18        .40   (55)
    EBITDA(2)              (44)      (632)   93       2,348      3,613   (35)
    Units outstanding
      - basic        6,629,407  6,214,028     7   6,585,726  6,164,952     7
      - diluted      6,629,407  6,214,028     7   6,744,957  6,164,952     7
    Units outstanding
     (end of period) 6,664,017  6,256,701     7   6,664,017  6,256,701     7
    Number of rigs
     (end of period)
      Conventional           7          7     -           7          7     -
      Coil                   -          1  (100)          -          1  (100)
                     ---------- ---------- ----- ----------- ---------- -----
      Total                  7          8   (13)          7          8   (13)
    Number of rigs
     (weighted average)      7        8.0   (13)          7        7.5    (7)
    Operating days(3)      115         16   619         433        409     6
    Industry utilization
     average(4)            19%        16%    19         37%        37%     -
    Pantera utilization
      Conventional         18%         3%   500         34%        19%    79
      Coil(5)                -          -     -           -          -     -
                     ---------- ---------- ----- ----------- ---------- -----
      Weighted average     18%         2%   800         34%        14%   143

    (1) Funds from operations as used in this report represents cash flow
        from operating activities before changes in non-cash operating
        working capital. Gross margin represents revenue less operating
        expenses. Readers are cautioned that funds from operations and gross
        margin do not have a standardized meaning prescribed by GAAP and
        therefore may not be comparable to similar measures presented by
        other issuers. However, Pantera does compute funds from operations
        and gross margin on a consistent basis for each reporting period.
        Management believes that in addition to net earnings, funds from
        operations is a useful supplemental measure as it provides an
        indication of the funds that are available for investing and
        financing activities, including distributions to unitholders.
        Management believes gross margin is a useful supplemental measure of
        operating performance and is particularly relevant to readers within
        the investment community. Refer to "Non-GAAP Measures" later in this
        discussion for a quantitative reconciliation of these numbers.
    (2) EBITDA means net earnings before interest, taxes, depreciation,
        amortization and unit-based compensation. Readers are cautioned that
        EBITDA does not have a standardized meaning prescribed by GAAP and
        therefore may not be comparable to similar measures presented by
        other issuers. However, Pantera does compute EBITDA on a consistent
        basis for each reporting period. Management believes that, in
        addition to net earnings, EBITDA is a significant indication of
        success for Pantera and is particularly relevant to readers within
        the investment community. Refer to "Non-GAAP Measures" later in this
        discussion for a quantitative reconciliation of these numbers.
    (3) Operating days is the total of all drilling days in the period from
        spud to release and excludes stand-by, moving, rig-up and rig-out
    (4) Source: Canadian Association of Oilwell Drilling Contractors (CAODC).
    (5) In 2007 Pantera had two coil rigs, one was converted to a
        conventional rig in Q1 2007 and the other was de-listed in Q3 2007.

    Certain statements included in this press release constitute
forward-looking statements including, without limitation, such things as
revenue expectations, capital expenditures, legislative changes, changes in
industry conditions, the impact of weather and other seasonal factors that
affect business operations, fluctuations in prevailing commodity prices, the
competitive environment to which Pantera is, or may be, exposed in all aspects
of its business and expected future availability and utilization of Pantera's
rigs. Such forward-looking statements that involve unknown risks,
uncertainties and other factors that may cause actual results, performance or
achievements of Pantera, or industry results, to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited to,
general economic and business conditions, the ability of Pantera to implement
its business strategy, and changes in, or failure to comply with government
regulations, especially health, safety and environment laws, regulations and
guidelines. Additional information on these and other factors that could
affect Pantera's operations and financial results are included in reports on
file with Canadian securities regulatory authorities and may be accessed
through the SEDAR website ( under Pantera's profile.
Forward-looking statements in this press release may include, but are not
limited to, revenue, commodity prices, rig utilization and availability,
capital expenditures and legislative changes. For this purpose, any statements
that are contained in this press release that are not statements of historical
fact may be deemed to be forward-looking statements. Forward-looking
statements often contain terms such as "may", "will", "should", "anticipate",
"expects", "intends" and similar expressions. Readers are cautioned that the
assumptions used in the preparation of such information, although considered
reasonable at the time of preparation, may prove to be imprecise and, as such,
undue reliance should not be placed on forward-looking statements.
Furthermore, the forward-looking statements contained herein are made as at
the date hereof and Pantera does not undertake any obligation to update
publicly or to revise any of the included forward-looking statements, whether
as a result of new information, future events or otherwise, except as may be
required by applicable securities laws.

    The Trust is an open-ended, investment trust governed by the laws of the
Province of Alberta pursuant to the Deed of Trust. The Trust was established
for the purpose of investing in property including the securities of Pantera
Drilling Limited Partnership and Pantera Drilling Inc. The beneficiaries of
the Trust are the holders of the trust units. The business of Pantera involves
the provision of contract drilling services to oil and natural gas exploration
and production companies operating in Canada.

    %SEDAR: 00023106E

For further information:

For further information: Terry Rosentreter, President and Chief
Executive Officer or Lorna Pollock, Chief Financial Officer at: Ph: (403)
515-8400, Fax: (403) 515-8405, E-mail:,

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