AKT press release
AKITA Drilling Ltd. Announces Results
TSX - Toronto Stock Exchange · Oil · Natural Gas · Potash · Hydrogen · Canada
CALGARY, Oct. 25 /CNW/ - AKITA Drilling Ltd. announced third quarter earnings and funds flow today. AKITA Drilling Ltd.'s net earnings for the nine months ended September 30, 2006 were $25,400,000 or $1.37 per share on revenue of $132,980,000. Comparative figures for 2005 were $19,688,000 or $1.06 per share of net earnings on revenue of $115,469,000. Funds flow from operations for the period was $35,666,000 compared to $29,834,000 in 2005. Earnings for the three months ended September 30, 2006 were $6,850,000 ($0.37 per share) on revenue of $38,856,000 compared with $7,108,000 ($0.38 per share) on revenue of $40,740,000 in 2005. Funds flow from operations for the quarter ended September 30, 2006 was $10,389,000 compared to $10,319,000 in the corresponding quarter in 2005.
>
During the third quarter, AKITA commissioned its latest rig. The Company anticipates redeploying this rig from its current location in Alberta into Alaska later this year where it is scheduled to operate on a term contract for one of AKITA's joint ventures. The projected timetable for completion of the remaining three rigs currently under construction has been delayed as a result of unexpected delays associated with the delivery of certain key components of the rigs. However, management still anticipates the receipt of its shallow capacity drilling rig during the fourth quarter of 2006 and also anticipates completion of the remaining two heavy oil pad drilling rigs by mid-2007. Demand for shallow drilling rigs, and to a lesser degree deep drilling rigs, tapered off during the third quarter as a result of current weakness in natural gas prices. Management anticipates that activity levels for these types of rigs will increase with the onset of winter drilling, but may once again become vulnerable to weaker demand by late winter or spring unless natural gas prices strengthen significantly. Demand for medium capacity rigs and for heavy oil pad drilling rigs is largely influenced by oil prices and continues to remain strong. Demand for drilling rigs in the Canadian North appears to be less than in previous years and may be constrained by the lack of positive developments on the Mackenzie Valley Pipeline. Financial results for the third 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 Nine Months Ended Ended September 30 September 30 2006 2005 2006 2005 REVENUE $ 38,856 $ 40,740 $ 132,980 $ 115,469
COSTS AND EXPENSES Operating and maintenance 22,418 23,281 75,303 66,231 Depreciation 3,157 2,760 11,012 9,201 Selling and administrative 3,638 4,107 12,897 11,246 29,213 30,148 99,212 86,678 OPERATING INCOME 9,643 10,592 33,768 28,791
OTHER INCOME (EXPENSE) Interest on long-term debt - (22) - (128) Interest income 504 330 1,413 876 Gain on sale of joint venture interests in rigs and other capital assets 243 36 686 750 Gain (loss) on foreign currency translation (9) - (110) - 738 344 1,989 1,498
EARNINGS BEFORE INCOME TAXES 10,381 10,936 35,757 30,289
INCOME TAXES Current 3,037 3,428 10,705 9,167 Future 494 400 (348) 1,434 3,531 3,828 10,357 10,601 NET EARNINGS 6,850 7,108 25,400 19,688
Retained earnings, beginning of period 139,812 110,614 124,343 100,871 Dividends (1,110) (1,021) (3,335) (3,069) Adjustment on repurchase and cancellation of share capital (2,282) (549) (3,138) (1,338)
RETAINED EARNINGS, END OF PERIOD $ 143,270 $ 116,152 $ 143,270 $ 116,152 EARNINGS PER CLASS A AND CLASS B SHARE Basic $ 0.37 $ 0.38 $ 1.37 $ 1.06 Diluted $ 0.37 $ 0.38 $ 1.36 $ 1.05
CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited ($000's) Three Months Nine Months Ended Ended September 30 September 30 2006 2005 2006 2005 OPERATING ACTIVITIES Net earnings $ 6,850 $ 7,108 $ 25,400 $ 19,688 Non-cash items included in earnings Depreciation 3,157 2,760 11,012 9,201 Future income taxes 494 400 (348) 1,434 Expense for defined benefit pension plan 65 63 200 189 Stock options charged to expense 66 24 88 72 Gain on sale of joint venture interests in rigs and other capital assets (243) (36) (686) (750) Funds flow from operations 10,389 10,319 35,666 29,834 Change in non-cash working capital (5,591) (7,222) 835 2,355 4,798 3,097 36,501 32,189 INVESTING ACTIVITIES Capital expenditures (12,205) (6,059) (30,464) (11,957) Proceeds on sales of joint venture interests in rigs and other capital assets 483 163 1,055 1,818 Change in non-cash working capital (880) 55 (222) 107 (12,602) (5,841) (29,631) (10,032) FINANCING ACTIVITIES Repayment of long-term debt - (1,044) - (3,856) Dividends (1,110) (1,021) (3,335) (3,069) Proceeds received on exercise of stock options - - 205 - Repurchase of share capital (2,438) (589) (3,317) (1,449) Change in non-cash working capital (106) (5) (29) 85 (3,654) (2,659) (6,476) (8,289) INCREASE IN CASH (11,458) (5,403) 394 13,868 Cash position, beginning of period 54,537 46,723 42,685 27,452
CASH POSITION, END OF PERIOD $ 43,079 $ 41,320 $ 43,079 $ 41,320 Interest paid during the period $ - $ 15 $ - $ 109 Income taxes paid during period $ 2,268 $ 2,333 $ 12,127 $ 7,716
CONSOLIDATED BALANCE SHEETS ($000's) September 30 December 31 2006 2005 2005 (Unaudited) (Audited) ASSETS Current assets Cash $ 43,079 $ 41,320 $ 42,685 Accounts receivable 34,978 32,905 50,900 Other 1,353 586 98 79,410 74,811 93,683 Investments 55 55 55 Capital assets 125,197 102,108 106,114 $ 204,662 $ 176,974 $ 199,852
LIABILITIES Current liabilities Bank indebtedness $ - $ - $ 4,400 Accounts payable and accrued liabilities 15,662 16,127 23,923 Income taxes payable 4,439 2,976 5,861 Current portion of long-term debt - 117 - 20,101 19,220 34,184 Future income taxes 13,852 14,547 14,200 Pension liability 3,302 3,039 3,102
CLASS A AND CLASS B SHAREHOLDERS' EQUITY Class A and Class B shares 23,566 23,558 23,540 Contributed surplus 571 458 483 Retained earnings 143,270 116,152 124,343 167,407 140,168 148,366 $ 204,662 $ 176,974 $ 199,852
>>
%SEDAR: 00002868E