AKT press release
AKITA Drilling Ltd. Announces Record Results
TSX - Toronto Stock Exchange · Oil · Natural Gas · Potash · Hydrogen · Canada
CALGARY, July 27 /CNW/ - AKITA Drilling Ltd. announced second quarter earnings and funds flow today. AKITA Drilling Ltd.'s net earnings for the six months ended June 30, 2006 were $18,550,000 or $1.00 per share on revenue of $94,124,000. Comparative figures for 2005 were $12,580,000 or $0.68 per share of net earnings on revenue of $74,729,000. Funds flow from operations for the period was $25,277,000 compared to $19,515,000 in 2005. Earnings for the three months ended June 30, 2006 were $7,548,000 ($0.41 per share) on revenue of $32,929,000 compared with $3,895,000 ($0.21 per share) on revenue of $24,840,000 in 2005. Funds flow from operations for the quarter ended June 30, 2006 was $8,758,000 compared to $5,984,000 in the corresponding quarter in 2005.
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Federal, provincial and territorial government tax rate reductions that will become effective over the next few years resulted in a $1,800,000 reduction of future income taxes. AKITA currently has four rigs under construction, including one that is scheduled to commence operations during the third quarter of 2006. Construction on the additional three rigs is proceeding on schedule, and such rigs are expected to be integrated into AKITA's fleet over the next six to nine months. Demand for rigs in most depth ranges has been reasonably strong, despite the recent reduction in natural gas prices. Activity levels for deep capacity rigs, and to a lesser extent shallow capacity rigs, will likely soften if gas prices remain at current or lower levels for a prolonged period. In addition to finding ways to optimize rig utilization for its existing fleet, management is focused on seeking opportunities that meet AKITA's current strengths related to drilling in the North and in heavy oil regions in Alberta. Financial results for the second quarter and on a year-to-date basis are as follows:
<< CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS Unaudited ($000's except per share amounts) Three Months Six Months Ended Ended June 30 June 30 2006 2005 2006 2005 REVENUE $ 32,929 $ 24,840 $ 94,124 $ 74,729
COSTS AND EXPENSES Operating and maintenance 18,358 13,945 52,885 42,950 Depreciation 3,093 2,259 7,855 6,441 Selling and administrative 3,653 3,462 9,259 7,139 25,104 19,666 69,999 56,530 OPERATING INCOME 7,825 5,174 24,125 18,199
OTHER INCOME (EXPENSE) Interest on long-term debt - (41) - (106) Interest income 525 333 909 546 Gain on sale of joint venture interests in rigs and other capital assets 335 527 443 714 Unrealized gain (loss) on foreign currency translation (131) - (101) - 729 819 1,251 1,154
EARNINGS BEFORE INCOME TAXES 8,554 5,993 25,376 19,353
INCOME TAXES Current 2,633 1,828 7,668 5,739 Future (1,627) 270 (842) 1,034 1,006 2,098 6,826 6,773 NET EARNINGS 7,548 3,895 18,550 12,580
Retained earnings, beginning of period 133,981 108,167 124,343 100,871 Dividends (1,113) (1,023) (2,225) (2,048) Adjustment on repurchase and cancellation of share capital (604) (425) (856) (789)
RETAINED EARNINGS, END OF PERIOD $139,812 $110,614 $139,812 $110,614 EARNINGS PER CLASS A AND CLASS B SHARE Basic $ 0.41 $ 0.21 $ 1.00 $ 0.68 Diluted $ 0.40 $ 0.21 $ 0.99 $ 0.67
CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited ($000's) Three Months Six Months Ended Ended June 30 June 30 2006 2005 2006 2005 OPERATING ACTIVITIES Net earnings $ 7,548 $ 3,895 $ 18,550 $ 12,580 Non-cash items included in earnings Depreciation 3,093 2,259 7,855 6,441 Future income taxes (1,627) 270 (842) 1,034 Expense for defined benefit pension plan 66 63 135 126 Stock options charged to expense 13 24 22 48 Gain on sale of joint venture interests in rigs and other capital assets (335) (527) (443) (714) Funds flow from operations 8,758 5,984 25,277 19,515 Change in non-cash working capital 19,067 17,367 6,426 9,577 27,825 23,351 31,703 29,092 INVESTING ACTIVITIES Capital expenditures (13,300) (4,771) (18,259) (5,898) Proceeds on sales of joint venture interests in rigs and other capital assets 432 1,306 572 1,655 Change in non-cash working capital 902 (125) 658 52 (11,966) (3,590) (17,029) (4,191) FINANCING ACTIVITIES Repayment of long-term debt - (1,417) - (2,812) Dividends (1,113) (1,023) (2,225) (2,048) Proceeds received on exercise of stock options 82 - 205 - Repurchase of share capital (623) (463) (879) (860) Change in non-cash working capital 1,846 (2) 77 90 192 (2,905) (2,822) (5,630) INCREASE IN CASH 16,051 16,856 11,852 19,271 Cash position, beginning of period 38,486 29,867 42,685 -
CASH POSITION, END OF PERIOD $ 54,537 $ 46,723 $ 54,537 $ 19,271 Interest paid during the period $ - $ 37 $ - $ 94 Income taxes paid during period $ 2,391 $ 2,368 $ 9,871 $ 5,383
CONSOLIDATED BALANCE SHEETS ($000's) June 30 December 31 2006 2005 2005 (Unaudited) (Audited) ASSETS Current assets Cash $ 54,537 $ 46,723 $ 42,685 Accounts receivable 33,746 20,919 50,900 Other 1,761 693 98 90,044 68,335 93,683 Investments 55 55 55 Capital assets 116,389 98,936 106,114 $ 206,488 $ 167,326 $ 199,852
LIABILITIES Current liabilities Bank indebtedness $ - $ - $ 4,400 Accounts payable and accrued liabilities 22,184 12,515 23,923 Income taxes payable 3,670 1,881 5,861 Current portion of long-term debt - 1,161 - 25,854 15,557 34,184 Future income taxes 13,358 14,147 14,200 Pension liability 3,237 2,976 3,102
CLASS A AND CLASS B SHAREHOLDERS' EQUITY Class A and Class B shares 23,722 23,598 23,540 Contributed surplus 505 434 483 Retained earnings 139,812 110,614 124,343 164,039 134,646 148,366 $ 206,488 $ 167,326 $ 199,852
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