Pantera Drilling Income Trust Reports Results for the Third Quarter Ended September 30, 2007 and Announces November Distribution


    (TSX: RIG.UN)

    CALGARY, Nov. 9 /CNW/ - Pantera Drilling Income Trust ("Pantera" or the
"Trust") announces that its rig activity in the third quarter was sporadic,
with four rigs actively drilling, and the remaining rigs experiencing low rig
activity due to the effects of drilling program cutbacks. Pantera's rig
utilization was 52% on the conventional rigs and 48% for the entire fleet for
the quarter. These numbers compare favorably to industry, which recorded a rig
utilization rate of 38% for the quarter.
    Pantera experienced a 4% increase in revenue for the third quarter, from
$8.1 million in 2006 to $8.4 million in 2007. This increase is primarily
attributable to a 7% increase in operating days, from 313 in Q3 2006 to 334 in
Q3 2007. Revenue for the nine months ended September 30, 2007 was
$22.0 million as compared with $22.4 million in 2006.
    Although activity was stronger in the third quarter, the downward
pressure in day rates combined with the increase in repairs, labour and other
operating costs resulted in a decrease in net earnings. Pantera recorded net
earnings for the three months ended September 30, 2007 of $732,900 as compared
with $1.6 million in 2006, and on a year to date basis, Pantera recorded net
earnings of $2.7 million in 2007 as compared with $4.1 million in 2006.
    On November 6, 2007, Pantera extended its credit facility with its
existing lender to a term-out date of December 27, 2008. The credit facility
consists of a $5 million revolving operating demand loan, a $35 million
committed 364 day extendible revolving loan facility, and a $500,000 demand
standby letter of credit. At September 30, 2007, the total debt for Pantera
was $26.3 million.
    The Canadian Association of Oilwell Drilling Contractors ("the CAODC")
has issued a revised industry forecast for the remainder of 2007 that predicts
a fourth quarter rig utilization of 43% and a total well count of
approximately 16,200 for the year 2007. The 2008 forecast released by the
CAODC was for 13,735 wells and an average rig utilization of 34%. Management
of Pantera believes that this significant reduction in activity next year will
halt rig construction (for use in Canada) and in fact start a decline in
available rigs. The CAODC predicts approximately 40 rigs will be removed due
to re-assignment to US or international projects, or cannibalized due to age
of equipment.
    The recent decline in industry wide rig utilization, from 65% to 37% for
the nine months ended September 30, 2007, coupled with the forecast by the
CAODC for even lower rig utilization in 2008 (34%) has led management of
Pantera to a recommendation that a more concerted effort be expended on
conserving maximum cash in order to reduce Pantera's debt and bolster the
balance sheet. This will also provide the Trust with more flexibility to take
advantage of opportunities that may be presented in the current environment.
In that regard, the Trustees have reduced the monthly payment of cash
distributions to unitholders from $0.067 to $0.03 per unit, effective with the
November distribution payable on December 14, 2007 to unitholders of record on
November 30, 2007.

                              Three months ended         Nine months ended
                                 September 30,             September 30,
    FINANCIAL              2007       2006  Change    2007       2006  Change
    (000s, except for
     units and per unit
     amounts)                ($)        ($)   (%)        ($)        ($)   (%)
    Revenue               8,419      8,088     4     21,982     22,424    (2)
     margin(1)            2,585      3,101   (17)     7,520      8,474   (11)
    Net earnings            733      1,587   (54)     2,713      4,164   (35)
      Per unit (basic
       and diluted)(2)      .12        .26   (54)       .44        .75   (41)
    Funds from (used in)
     operations(1)        1,575      2,142   (26)     4,435      5,665   (22)
      Per unit (basic
       and diluted)(2)      .25        .36   (31)       .71       1.03   (31)
    EBITDA(3)             1,984      2,251   (12)     5,598      6,244   (10)
    Units outstanding
     average)(2)      6,306,674  6,000,000     5  6,212,712  5,523,810    12
    Units outstanding
     (end of
     period)(2)       6,360,997  6,000,000     6  6,360,997  6,000,000     6

                                              (%)                         (%)
    Number of rigs
     (end of period)
      Conventional            7          4    75          7          4    75
      Coil                    -          2  (100)         -          2  (100)
                      ---------- ---------- ----- ---------- ---------- -----
      Total                   7          6    17          7          6    17
    Number of rigs
     (weighted average)     7.6          6    27        7.5        5.7    32
    Operating days          334        313     7        743        832   (11)
    Industry utilization
     average(4)             38%        63%   (40)       37%        65%   (43)
    Pantera utilization
      Conventional          52%        85%   (39)       46%        71%   (35)
      Coil                   0%         0%     0         0%        20%  (100)
                      ---------- ---------- ----- ---------- ---------- -----
      Weighted Average      48%        57%   (16)       36%        53%   (32)

    (1) Funds from (used in) operations as used in this press release
        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 (used in)
        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 (used in) 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.
    (2) The units outstanding give effect to the restructuring of Pantera in
        2005 and the February 8, 2006 split of units of the Trust on the
        basis of 10.739754 units for each trust unit of the Trust held
        immediately prior to the effective time of the split.
    (3) EBITDA means net earnings before interest, taxes, depreciation and
        amortization. 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.
    (4) Source: Canadian Association of Oilwell Drilling Contractors (CAODC).

    Additional information relating to the Trust, including its annual
information form, can be accessed on the Trust's website at and under the Trust's profile on the System for
Electronic Document Analysis and Retrieval (SEDAR) at
    The Trust is an open-ended, investment trust governed by the laws of the
Province of Alberta pursuant to the Declaration 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.

    This press release contains certain statements that constitute
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 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. 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 in this press release
are made as of the date hereof, and Pantera undertakes no obligation, except
as required by applicable securities legislation, to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise.

    %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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