CALGARY, April 27, 2017 /CNW/ - AKITA Drilling Ltd.'s net
loss for the three months ended March 31,
2017 was $4,975,000 (net loss
of $0.28 per share basic and diluted)
on revenue of $19,193,000, compared
to net income of $18,173,000 (net
income of $1.01 per share basic and
diluted) on revenue of $41,991,000
($13,741,000 from direct operations
and $28,250,000 from contract
cancelation fee) for the corresponding period in 2016. Funds
flow from operations for the quarter ended March 31, 2017 was $1,824,000 compared to $25,368,000 in the corresponding quarter in
2016.
The first quarter of 2017 saw considerable increases in drilling
activity across the western Canadian sedimentary basin when
compared to the first quarter of 2016. As a result of increased
West Texas Intermediate crude oil prices, operators have begun to
expand their capital programs which in turn has led to
significantly more opportunities for drilling companies than in the
first quarter of 2016. However, this marked improvement in drilling
activity over 2016 is still well below historical averages and
there continues to be pricing pressure on drilling companies. This
pricing pressure is likely to continue until some stability in
crude oil prices is obtained. AKITA saw a 61% improvement in its
operating days in the first quarter of 2017 when compared to the
same period in 2016. To satisfy this demand, AKITA started up 12
rigs in the first quarter of 2017 that had previously been down for
extended periods.
Selected information from AKITA Drilling Ltd.'s Management
Discussion and Analysis from the Quarterly Report as follows:
Introduction and General Overview
Activity levels in the contract drilling industry are highly
correlated to the market prices for both crude oil and natural gas.
Average West Texas Intermediate crude oil prices increased 56% when
comparing the first quarter of 2017 to the first quarter of 2016
and natural gas Alberta Energy Company (AECO) spot prices increased
21% over the same time period. This strengthening of commodity
prices has had a correspondingly positive effect on drilling
activity in the western Canadian sedimentary basin with industry
utilization rates increasing.
This increase in utilization is a positive sign for the drilling
industry and AKITA, however pricing pressure still remains severe
as discussed further in this MD&A.
Readers of this MD&A should be aware that historically, the
first quarter of the calendar year is the most active in the
drilling industry, as operators take advantage of the frozen ground
making the movement of heavy equipment easier. Lower activity
levels that result from spring break-up and associated travel bans
on public roads characterize the second quarter.
Generally, AKITA meets or exceeds industry average rig
utilization rates as a result of positive customer relations,
meaningful joint ventures with Aboriginal and First Nations
partners, employee expertise, safety performance, drilling
performance and the majority of the Company's rig fleet being
invested in high demand pad rigs.
The following table summarizes first quarter utilization for
AKITA and industry for 2017 and 2016:
Utilization Rates
Percentages
|
AKITA
|
Industry(1)
|
2017 January to
March
|
38%
|
40%
|
2016 January to
March
|
21%
|
21%
|
(1) Source:
Canadian Association of Oilwell Drilling Contractors
(CAODC)
|
During the first quarter of 2017 AKTA's pad triple rigs,
conventional singles and conventional doubles all had significant
activity improvements over the same period of 2016.
Fleet and Rig Utilization
AKITA had 28 drilling rigs at March 31,
2017, including eight that operated under joint ventures
(26.750 net to AKITA), compared to 31 rigs (27.725 net) at
March 31, 2016. In the fourth quarter
of 2016 two new rigs were added and five rigs were
decommissioned. There were no changes to the Company's rig
fleet during the first quarter of 2017.
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Operating
days
|
961
|
598
|
363
|
61%
|
Utilization
rate
|
38%
|
21%
|
17
|
81%
|
Revenue and Operating & Maintenance Expenses
$Million
|
|
|
|
|
Three Months Ended
March 31
|
2017
|
2016
|
Change
|
%
Change
|
Revenue per interim
financial statements
|
19.2
|
42.0
|
(22.8)
|
(54%)
|
Proportionate share
of revenue from joint ventures(1)
|
6.1
|
5.7
|
0.4
|
7%
|
Contract cancellation
revenue
|
-
|
(28.3)
|
28.3
|
100%
|
Adjusted
Revenue(1)
|
25.3
|
19.4
|
5.9
|
30%
|
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Operating &
maintenance expenses per interim financial statements
|
17.7
|
9.2
|
8.5
|
92%
|
Proportionate share
of operating & maintenance expenses from joint
ventures(1)
|
4.0
|
3.1
|
0.9
|
29%
|
Adjusted operating
& maintenance expenses (1)
|
21.7
|
12.3
|
9.4
|
76%
|
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Adjusted
revenue(1)
|
25.3
|
19.4
|
5.9
|
30%
|
Adjusted operating
& Maintenance expenses(1)
|
21.7
|
12.3
|
9.4
|
76%
|
Adjusted operating
margin(1)(2)
|
3.6
|
7.1
|
(3.5)
|
(49%)
|
$Dollars
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Adjusted revenue per
operating day(1)
|
26,367
|
32,462
|
(6,095)
|
(19%)
|
Adjusted operating
& maintenance expenses per operating
day(1)
|
22,625
|
20,564
|
2,061
|
10%
|
Adjusted operating
margin per operating day(1)
|
3,742
|
11,898
|
(8,156)
|
(69%)
|
|
|
(1)
|
Proportionate
share of revenue from joint ventures, adjusted revenue,
proportionate share of operating & maintenance expenses from
joint ventures, adjusted operating & maintenance expenses,
adjusted operating margin, adjusted revenue per operating day,
adjusted operating & maintenance expenses per operating day and
adjusted operating margin per operating day are non-GAAP financial
measures. See commentary in "Basis of Analysis in this
MD&A, Non-GAAP and Additional GAAP Items".
|
(2)
|
Adjusted operating
margin is the difference between adjusted revenue and adjusted
operating & maintenance expenses.
|
During the first quarter of 2017, adjusted revenue increased to
$25,339,000 from $19,412,000 in the first quarter of 2016, due
solely to higher utilization of the Company's rig fleet. On a per
operating day basis, adjusted revenue per operating day decreased
to $26,367 in the first quarter of
2017 from $32,462 in the same period
of 2016. This significant decline in revenue per day was a result
of two factors, the first and most significant being the
continuation of the bottom of the cycle spot rig pricing which was
reached in mid 2016 and has continued throughout the first quarter
of 2017. Secondly, a change in the mix of rigs working saw more
single and double rigs working in the first quarter of 2017
compared to the same period of 2016. Single and double rigs do not
earn as high a day rate as triple rigs.
Adjusted operating and maintenance expenses are tied to
operating days and amounted to $21,743,000 ($22,625 per operating day) during the first
quarter of 2017, compared to $12,297,000 ($20,564 per operating day) during the same period
of the prior year. The increase in adjusted operating and
maintenance expenses is primarily due to more operating days in the
first quarter of 2017 compared to the first quarter of 2016. High
rig start-up costs was the main factor behind the increase to
adjusted operating and maintenance costs on a per operating day
basis as 12 rigs started up during the first quarter of 2017
compared to only one rig starting up in the same period of
2016.
The adjusted operating margin for the Company decreased to
$3,596,000 ($3,742 per operating day) in the first quarter of
2017 from $7,115,000 ($11,898 per operating day) during the
corresponding quarter of 2016. The reduction in adjusted
operating margin both as a whole and on a per operating day basis
is directly related to lower adjusted revenue per operating day,
down 19% in the first quarter of 2017 compared to the first quarter
of 2016, while operating costs were up 10% over the same period for
the reasons noted above.
Depreciation and Amortization Expense
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Depreciation and
amortization expense
|
6.7
|
6.3
|
0.4
|
6%
|
Depreciation and amortization expense increased to $6,736,000 during the first quarter of 2017 from
$6,275,000 during the corresponding
period in 2016. AKITA depreciates its rig fleet on a unit of
production basis and the increase in depreciation and amortization
was directly correlated to the increase in overall drilling days
offset slightly by rigs with lower cost basis working in the first
quarter of 2017 compared to the first quarter of 2016. In the
first quarter of 2017, drilling rig depreciation accounted for 97%
of total depreciation expense (Q1 2016 - 96%).
While AKITA conducts some of its drilling operations via joint
ventures, the drilling rigs used to conduct those activities are
owned jointly by AKITA and its joint venture partners, and not by
the joint ventures themselves. As the joint ventures do not
hold any property, plant, or equipment assets directly, the
Company's depreciation expense includes depreciation on assets
involved in both wholly-owned and joint ventured activities.
Selling and Administrative Expense
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Selling and
administrative expense per interim financial statements
|
4.0
|
4.0
|
-
|
0%
|
Proportionate share
of selling and administrative expense from joint
ventures(1)
|
0.0
|
0.1
|
(0.1)
|
(100%)
|
Adjusted selling and
administrative expense(1)
|
4.0
|
4.1
|
(0.1)
|
(2%)
|
|
|
(1)
|
Proportionate
share of selling and administrative expense from joint ventures and
adjusted selling and administrative expenses are non-GAAP
measures. See commentary in "Basis of Analysis in this
MD&A, Non-GAAP and Additional GAAP Items".
|
Adjusted selling and administrative expenses were 16% of
adjusted revenue in the first quarter of 2017 compared to 21% of
adjusted revenue in the first quarter of 2016, largely as a result
of increased adjusted revenue in 2017 and the fixed nature of most
selling and administrative expenses. Salaries and benefits
accounted for 43% of these expenses (Q1 2016 51%).
Equity Income from Joint Ventures
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Proportionate share
of revenue from joint ventures(1)
|
6.1
|
5.7
|
0.4
|
7%
|
Proportionate share
of operating & maintenance expenses from joint
ventures(1)
|
4.0
|
3.1
|
0.9
|
29%
|
Proportionate share
of selling & administrative expense from joint
ventures(1)
|
0.0
|
0.1
|
(0.1)
|
(100%)
|
Equity income from
joint ventures
|
2.1
|
2.5
|
(0.4)
|
(16%)
|
|
|
(1)
|
Proportionate
share of revenue from joint ventures, proportionate share of
operating & maintenance expenses from joint ventures and
proportionate share of selling and administrative expense from
joint ventures are non-GAAP financial measures. See commentary
in "Basis of Analysis in this MD&A, Non-GAAP and Additional
GAAP Items".
|
The Company provides the same drilling services and utilizes the
same management, financial and reporting controls for its joint
venture activities as are in place for its wholly-owned
operations. The analyses of these activities are incorporated
throughout the relevant sections of this MD&A.
Other Income (Losses)
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Total other income
(losses)
|
0.1
|
0.0
|
0.1
|
100%
|
Total other income (losses) is the aggregate of interest income,
interest expense, gain (loss) on sale of assets and net other gains
(losses) all of which are discussed below in detail.
Interest income decreased to $120,000 in the first quarter of 2017 from
$248,000 in the same period of 2016,
due to the decrease in the interest-bearing long-term receivable
held related to a contract cancellation recorded in 2016.
In the first quarter of 2017, the Company incurred interest
expense of $42,000 related to the
future cost of the Company's defined benefit pension plan (Q1
2016-$40,000).
During the first quarter of 2017, the Company sold ancillary
assets for proceeds of $80,000 that
resulted in a gain of $76,000. During
the corresponding quarter of 2016, assets were sold for
$60,000 resulting in a loss of
$27,000.
During the first quarter of 2016, $197,000 of net other losses related to the
discount of the long-term receivable associated with the contract
cancellation fee. During the first quarter of 2017, there was
no such discount as all the receivable was reclassified to current
assets.
Income Tax Expense
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Current tax expense
(recovery)
|
(2.0)
|
6.1
|
(8.1)
|
(132%)
|
Deferred tax expense
(recovery)
|
(0.0)
|
0.8
|
(0.8)
|
(100%)
|
Total income tax
expense (recovery)
|
(2.0)
|
6.9
|
(8.9)
|
(129%)
|
The Company recorded a tax recovery of $2,046,000 in the first quarter of 2017 compared
to an expense of $6,895,000 in the
corresponding period in 2016, due to the loss incurred in the first
quarter of 2017.
Net Income, Funds Flow and Net Cash From Operating
Activities
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Net income
(loss)
|
(5.0)
|
18.2
|
(23.2)
|
(127%)
|
Funds flow from
operations(1)
|
1.8
|
25.4
|
(23.6)
|
(93%)
|
|
|
(1)
|
Funds flow from
operations is an additional GAAP measure under IFRS. See
commentary in "Basis of Analysis in this MD&A, Non-GAAP and
Additional GAAP Items".
|
The Company incurred a net loss of $4,975,000 ($0.28
basic and diluted loss per share) for the first quarter of 2017,
compared to net income of $18,173,000
($1.01 basic and diluted earnings per
share) in the first quarter of 2016. Funds flow from
operations decreased to $1,824,000 in
the first quarter of 2017, from $25,368,000 during the corresponding quarter in
2016. The net income in 2016 was directly attributable to the
contract cancellation fee, while lower revenue per operating day
and higher direct costs per operating day in 2017 contributed to
the quarter over quarter decrease in profitability. Funds flow
from operations was affected by the same factors as net income.
The following table reconciles funds flow and cash flow from
operations:
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2017
|
2016
|
Change
|
%
Change
|
Funds flow from
operations(1)
|
1.8
|
25.4
|
(23.6)
|
(93%)
|
Change in non-cash
working capital
|
5.7
|
(6.9)
|
12.6
|
183%
|
Equity income from
joint ventures
|
(2.1)
|
(2.5)
|
0.4
|
16%
|
Change in long-term
receivable
|
-
|
(9.3)
|
9.3
|
100%
|
Current income tax
expense (Recovery)
|
(2.0)
|
6.1
|
(8.1)
|
(133%)
|
Net cash from
operating activities
|
3.4
|
12.8
|
(9.4)
|
(73%)
|
|
|
(1)
|
Funds flow from
operations is an additional GAAP measure under IFRS. See
commentary in "Basis of Analysis in this MD&A, Non-GAAP and
Additional GAAP Items".
|
Liquidity and Capital Resources
Cash used for capital expenditures totalled $4,587,000 in the first quarter of 2017 (Q1 2016
- $373,000). Current
year-to-date capital expenditures largely related to routine items
while 33% related to construction of the Company's new AC double
pad rig which is scheduled to be completed in mid-2017. The prior
year's first quarter capital expenditures related to routine
capital items.
At March 31, 2017, AKITA's
Statement of Financial Position included working capital (current
assets minus current liabilities) of $29,980,000 compared to working capital of
$30,759,000 at March 31, 2016, and working capital of
$34,907,000 at December 31, 2016. The seasonal nature of
AKITA's business typically results in higher non-cash working
capital balances at the end of the first quarter than at year-end
due to the high seasonal activity levels encountered in the first
quarter. Working capital at March 31,
2017 decreased compared to March 31,
2016 and December 31, 2016 due
to the second payment of the receivable associated with the 2016
contract cancellation fee as well as higher payables balances
related to increased activity, which was not offset by a
corresponding increase in accounts receivable due to historically
low day rates discussed above.
During the first quarter of 2017, the Company requested a
reduction to its credit facility (currently undrawn) from
$100 million to $50 million. The
facility was reduced as part of the Company's continued cost
cutting initiatives in order to reduce standby fees on the undrawn
amounts. The changes to the credit facility also included
elimination of certain covenants to allow for more flexibility in
accessing the facility in the current low earnings environment.
The financial covenants of the old facility were:
- Funded debt to EBITDA shall not be greater than 3.00 to 1;
- EBITDA to interest expense shall not be less than 3.00 to 1;
and
- Tangible assets to funded debt shall not be less than 2.25 to
1.
The new credit facility has the following financial
covenants:
- EBITDA to interest expense shall not be less than 2.00 to
1.
The borrowing base of the new facility is based
on1:
- 75% of good accounts receivable; plus
- 40% of the aggregate book value of the consolidated eligible
fixed assets.
1Readers
should be aware that each of the EBITDA, interest expense, good
accounts receivable and consolidated eligible fixed assets have
specifically set out definitions in the loan facility agreement and
are not necessarily defined by or consistent with either GAAP or
determinations by other users for other purposes.
|
Although the facility may be utilized to finance general
corporate needs, management intends to access this facility
primarily to enable the Company to explore expansion opportunities
or to fund new rig construction requirements related to drilling
contracts that it might be awarded. The interest rate on the
facility is 1.25% over prime interest rates or 2.5% over guaranteed
notes, depending on the preference of the Company. The Company
did not have any borrowings from this facility at March 31, 2017.
The Company's objectives when managing capital are:
- to safeguard the Company's ability to continue as a going
concern so that it can continue to provide returns for shareholders
and benefits for other stakeholders; and
- to augment existing resources in order to meet growth
opportunities.
The Company manages its capital structure and makes adjustments
to it in light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain
or adjust its capital structure, the Company may adjust the amount
of dividends paid to shareholders, repurchase shares, issue new
shares, sell assets or take on long-term debt. Since 1999,
dividend rates have increased eight times with no
decreases. The last dividend increase was declared on
March 5, 2014.
The Company did not have a normal course issuer bid in place
during the first quarter of 2017 or 2016.
During the 10 year period since 2007, AKITA has repurchased and
cancelled 455,108 Class A Non-Voting shares through normal course
issuer bids and issued 122,200 Class A Non-Voting shares upon
exercise of stock options.
The Company had two rigs under multi-year contracts at
March 31, 2017. Of these
contracts, one is scheduled to expire in 2017 and one in 2018.
From time to time, the Company may provide guarantees for bank
loans to joint venture partners in respect of sales of rig
interests to joint venture partners. At March 31, 2017, AKITA provided $2,613,000 in deposits with its bank for those
purposes (March 31, 2016 -
$5,317,000 and December 31, 2016 - $2,969,000). AKITA's security from its
partners for these guarantees includes interests in specific rig
assets. These balances have been classified as restricted cash
on the Interim Consolidated Statements of Financial
Position.
Basis of Analysis in this MD&A, Non-GAAP and Additional
GAAP Items
The Company reports its joint venture activities in the
financial statements in accordance with IFRS 11 "Joint
Arrangements". In determining the classification of its Joint
Arrangements, AKITA considers whether the Joint Arrangements are
structured through separate vehicles, if the legal form of the
separate vehicles confers upon the parties direct rights to assets
and obligations for liabilities relating to the Joint Arrangements,
whether the contractual terms between the parties confer upon them
rights to assets and obligations for liabilities relating to the
arrangements as well as if other facts and circumstances lead to
rights for assets and obligations for liabilities being conferred
upon the parties to the Joint Arrangement prior to concluding that
AKITA's joint ventures are properly classified as joint ventures
rather than joint operations. Under IFRS 11, AKITA is required
to report its joint venture assets, liabilities and financial
activities using the equity method of accounting. However, for
purposes of analysis in this MD&A, the proportionate share of
assets, liabilities and financial activities is included as
non-GAAP financial measure ("Adjusted") where appropriate. The
Company provides the same drilling services and utilizes the same
management, financial and reporting controls for its joint venture
activities as are in place for its wholly-owned
operations. None of AKITA's joint ventures are individually
material in size when considered in the context of AKITA's overall
operations.
Adjusted operating margin, adjusted revenue per operating day,
adjusted operating and maintenance expenses per operating day and
adjusted operating margin per operating day are not recognized GAAP
measures under IFRS. Management and certain investors may find
such operating margin data to be a useful measurement tool, as it
provides an indication of the profitability of the business prior
to the influence of depreciation, overhead expenses, financing
costs and income taxes. Management and certain investors may
find "per operating day" measures for adjusted revenue and adjusted
operating margin indicate pricing strength while adjusted operating
and maintenance expenses per operating day demonstrates a degree of
cost control and provides a proxy for specific inflation rates
incurred by the Company. Readers should be cautioned that in
addition to the foregoing, other factors, including the mix of rigs
that are utilized between conventional and pad and singles, doubles
and triples can also influence these results. Readers should
also be aware that AKITA includes standby revenue in its
determination of "per operating day" results.
Funds flow from operations is considered an additional GAAP item
under IFRS. AKITA's method of determining funds flow from
operations may differ from methods used by other companies and
includes cash flow from operating activities before working capital
changes, equity income from joint ventures, and income tax amounts
paid or recovered during the period. Management and certain
investors may find funds flow from operations to be a useful
measurement to evaluate the Company's operating results at year-end
and within each year, since the seasonal nature of the business
affects the comparability of non-cash working capital changes both
between and within periods.
Forward-Looking Statements
From time to time AKITA makes forward-looking
statements. These statements include but are not limited to
comments with respect to AKITA's objectives and strategies,
financial condition, results of operations, the outlook for the
industry and risk management.
By their nature, these forward-looking statements involve
numerous assumptions, inherent risks and uncertainties, both
general and specific, and the risk that the predictions and other
forward-looking statements will not be realized. Readers of
this MD&A are cautioned not to place undue reliance on these
statements as a number of important factors could cause actual
future results to differ materially from the plans, objectives,
estimates and intentions expressed in such forward-looking
statements.
Forward-looking statements may be influenced by factors such as
the level of exploration and development activity carried on by
AKITA's customers; world crude oil prices and North American
natural gas prices; weather; access to capital markets and
government policies. We caution that the foregoing list of
factors is not exhaustive and that investors and others should
carefully consider the foregoing factors as well as other
uncertainties and events prior to making a decision to invest in
AKITA. Except as required by law, the Company does not
undertake to update any forward-looking statements, whether written
or oral, that may be made from time to time by it or on its
behalf.
Selected Financial Information for the Company is as
follows:
|
|
|
|
|
AKITA Drilling
Ltd.
|
|
|
|
|
Interim Statements
of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
March
31,
|
March 31,
|
December
31,
|
$
Thousands
|
|
2017
|
2016
|
2016
|
Assets
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
10,499
|
$
|
6,034
|
$
|
14,250
|
|
Term
deposits
|
|
-
|
16,000
|
-
|
|
Accounts
receivable
|
|
25,926
|
16,410
|
28,220
|
|
Income taxes
recoverable
|
|
4,374
|
-
|
2,356
|
|
Prepaid expenses and
other
|
|
756
|
663
|
74
|
|
|
|
41,555
|
39,107
|
44,900
|
Non-current
Assets
|
|
|
|
|
|
Long-term
receivable
|
|
-
|
9,323
|
-
|
|
Restricted
cash
|
|
2,613
|
5,317
|
2,969
|
|
Other long-term
assets
|
|
907
|
989
|
894
|
|
Investment in joint
ventures
|
|
4,253
|
3,944
|
3,252
|
|
Property, plant and
equipment
|
|
203,776
|
210,686
|
205,892
|
Total
Assets
|
|
$
|
253,104
|
$
|
269,366
|
$
|
257,907
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
10,050
|
$
|
3,958
|
$
|
8,468
|
|
Dividends
payable
|
|
1,525
|
1,525
|
1,525
|
|
Income taxes
payable
|
|
-
|
2,865
|
-
|
|
|
|
11,575
|
8,348
|
9,993
|
Non-current
Liabilities
|
|
|
|
|
|
Financial
instruments
|
|
31
|
96
|
41
|
|
Deferred income
taxes
|
|
23,673
|
19,951
|
23,702
|
|
Deferred share
units
|
|
226
|
178
|
222
|
|
Pension
liability
|
|
4,392
|
3,880
|
4,303
|
Total
Liabilities
|
|
39,897
|
32,453
|
38,261
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
Class A and Class B
shares
|
|
23,871
|
23,871
|
23,871
|
|
Contributed
surplus
|
|
4,346
|
4,011
|
4,285
|
|
Accumulated other
comprehensive loss
|
|
(366)
|
(244)
|
(366)
|
|
Retained
earnings
|
|
185,356
|
209,275
|
191,856
|
Total
Equity
|
|
213,207
|
236,913
|
219,646
|
Total Liabilities
and Equity
|
|
$
|
253,104
|
$
|
269,366
|
$
|
257,907
|
|
|
|
|
|
AKITA Drilling
Ltd.
|
|
|
|
|
Interim Statements
of Net Income (Loss) and Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
Three Months
Ended March 31
|
$ Thousands except
per share amounts
|
|
|
2017
|
2016
|
|
|
|
|
|
Revenue
|
|
|
$
|
19,193
|
$
|
41,991
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
Operating and
maintenance
|
|
|
17,735
|
9,154
|
|
Depreciation and
amortization
|
|
|
6,736
|
6,275
|
|
Selling and
administrative
|
|
|
3,978
|
3,963
|
Total costs and
expenses
|
|
|
28,449
|
19,392
|
|
|
|
|
|
Revenue less costs
and expenses
|
|
|
(9,256)
|
22,599
|
|
|
|
|
|
Equity income from
joint ventures
|
|
|
2,062
|
2,455
|
|
|
|
|
|
Other income
(loss)
|
|
|
|
|
|
Interest
income
|
|
|
120
|
248
|
|
Interest
expense
|
|
|
(42)
|
(40)
|
|
Gain (loss) on sale
of assets
|
|
|
76
|
(27)
|
|
Net other gains
(losses)
|
|
|
19
|
(167)
|
Total other income
(loss)
|
|
|
173
|
14
|
|
|
|
|
|
Income (loss)
before income taxes
|
|
|
(7,021)
|
25,068
|
|
|
|
|
|
Income
taxes
|
|
|
(2,046)
|
6,895
|
|
|
|
|
|
Net income (loss)
and comprehensive income (loss) for the period attributable to
shareholders
|
|
|
$
|
(4,975)
|
$
|
18,173
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per Class A and Class B Share
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.28)
|
$
|
1.01
|
|
Diluted
|
|
|
$
|
(0.28)
|
$
|
1.01
|
|
|
|
|
AKITA Drilling
Ltd.
|
|
|
|
Interim Statements
of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
Three Months
Ended March 31
|
$
Thousands
|
|
2017
|
2016
|
|
|
|
|
|
Operating
Activities
|
|
|
|
Net income (loss) and
comprehensive income (loss)
|
|
$
|
(4,975)
|
$
|
18,173
|
Non-cash items
included in net income (loss) and comprehensive income
(loss):
|
|
|
|
Depreciation and
amortization
|
|
6,736
|
6,275
|
|
Deferred income tax
expense (recovery)
|
|
(29)
|
748
|
|
Defined benefit
pension plan expense
|
|
113
|
94
|
|
Stock options and
deferred share units expense
|
|
65
|
72
|
|
(Gain) loss on sale
of assets
|
|
(76)
|
27
|
|
Unrealized gain on
financial guarantee contracts
|
|
(10)
|
(21)
|
Funds flow from
operations
|
|
1,824
|
25,368
|
Change in non-cash
working capital
|
|
5,679
|
(6,883)
|
Equity income from
joint ventures
|
|
(2,062)
|
(2,455)
|
Change in long-term
receivable
|
|
-
|
(9,323)
|
Post-employment
benefits
|
|
(24)
|
(8)
|
Interest
paid
|
|
(1)
|
-
|
Income tax expense -
current (recoverable)
|
|
(2,017)
|
6,147
|
Income taxes
paid
|
|
-
|
(3)
|
Net cash from
operating activities
|
|
3,399
|
12,843
|
|
|
|
|
|
Investing
Activities
|
|
|
|
Capital
expenditures
|
|
(4,587)
|
(373)
|
Change in non-cash
working capital related to capital
|
|
(2,485)
|
(1,353)
|
Net distributions
from investment in joint ventures
|
|
1,061
|
2,452
|
Change in cash
restricted for joint ventures
|
|
356
|
661
|
Change in term
deposits
|
|
-
|
(16,000)
|
Proceeds on sale of
assets
|
|
80
|
60
|
Net cash used in
investing activities
|
|
(5,575)
|
(14,553)
|
|
|
|
|
|
Financing
Activities
|
|
|
|
Dividends
paid
|
|
(1,525)
|
(1,525)
|
Loan commitment fee
paid
|
|
(50)
|
(100)
|
Net cash used in
financing activities
|
|
(1,575)
|
(1,625)
|
|
|
|
|
|
Decrease in
cash
|
|
(3,751)
|
(3,335)
|
Cash, beginning of
period
|
|
14,250
|
9,369
|
|
|
|
|
|
Cash, End of
Period
|
|
$
|
10,499
|
$
|
6,034
|
SOURCE AKITA Drilling Ltd.