CALGARY, April 27, 2018 /CNW/ - AKITA Drilling Ltd.'s net
loss for the three months ended March 31,
2018 was $1,912,000 (net loss
of $0.11 per share basic and diluted)
on revenue of $27,089,000, compared
to a net loss of $4,975,000 (net loss
of $0.28 per share basic and diluted)
on revenue of $19,193,000 for
the corresponding period in 2017. Funds flow from operations
for the quarter ended March 31, 2018
was $4,519,000 compared to
$1,824,000 in the corresponding
quarter of 2017.
AKITA had improved results in the first quarter of 2018, with
drilling activity across the Western Canadian Sedimentary Basin
continuing to increase when compared to the same period in 2017,
resulting in improved results for the Company. The increased
activity was due to higher crude oil prices, with West Texas
Intermediate (WTI) remaining above $50
USD since October of last year. The Company's heavy oil rigs
were very active in the quarter generating over half of the
Company's revenue for the first quarter of 2018. Although day
rates have begun to increase they have been slow to recover from
the downturn. There is still insufficient demand in the Canadian
market to create significant upward pricing pressure. During
the quarter AKITA moved a second rig to the United States, which began drilling in
March. The Company has been successful in relocating and
contracting idle rigs from Canada
to the US Permian Basin at minimal capital cost.
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 of both crude oil and natural gas.
Average West Texas Intermediate (WTI) crude oil prices increased
22% when comparing the first quarter of 2018 to the first quarter
of 2017, while Alberta Energy Company (AECO) natural gas spot
prices decreased 22% over the same time period. This shift in
commodity prices has increased the demand for the Company's rigs
drilling for oil while at the same time reducing demand for the
Company's rigs drilling for dry gas. As AKITA is typically
more active in heavy oil drilling, the increase in demand due to
crude oil prices increased the Company's utilization for the first
quarter of 2018 compared to the first quarter of 2017.
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 frozen ground,
which makes 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.
Fleet and Rig Utilization
AKITA had 28 drilling rigs at March 31,
2018, including five that operated under joint ventures
(26.750 net to AKITA), the same as at March
31, 2017. During the first quarter of 2018, a second rig was
moved to the United States. The
Company currently has 26 rigs in Canada and two in the United States.
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Operating
days
|
1,174
|
961
|
213
|
22%
|
Utilization
rate
|
47%
|
38%
|
9
|
24%
|
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 that the majority of the Company's rig fleet are
high-demand pad drilling rigs.
The following table compares first quarter utilization for AKITA
to the industry for 2018 and 2017:
Utilization Rates
Expressed in Percentages
|
AKITA
|
Industry(1)
|
2018 January to
March
|
47%
|
41%
|
2017 January to
March
|
38%
|
39%
|
The improvement in utilization in the first quarter of 2018
compared to the first quarter of 2017 was driven by AKITA's fleet
of pad triple drilling rigs obtaining more operating days in 2018,
while other rig categories obtained similar results as in the prior
year.
Revenue and Operating & Maintenance Expenses
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Contract drilling
revenue
|
27.1
|
19.2
|
7.9
|
41%
|
Operating &
maintenance expenses
|
20.4
|
17.7
|
2.7
|
15%
|
|
|
|
|
|
$Dollars
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
AKITA and joint
ventures' revenue per operating day(1)
|
29,363
|
26,367
|
2,996
|
11%
|
AKITA and joint
ventures' operating & maintenance expenses per operating
day(1)
|
21,848
|
22,625
|
(778)
|
(3%)
|
AKITA and joint
ventures' operating margin per operating
day(1)
|
7,515
|
3,742
|
3,773
|
101%
|
|
|
(1)
|
AKITA and joint
ventures' revenue per operating day, AKITA and joint ventures'
operating & maintenance expenses per operating day and AKITA
and joint ventures' 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".
|
During the first quarter of 2018, revenue increased to
$27,089,000 from $19,193,000 in the first quarter of 2017, due to
increases in both utilization as well as revenue per day. Revenue
per operating day increased to $29,363 (for AKITA including joint ventures)
year-to-date in 2018 from $26,367 for
the same period in 2017. The increase in revenue per operating day
was a result of a slight strengthening of rates in the Canadian
industry as well as the mix of rigs AKITA operated in the quarter.
Pad triple drilling rigs, which generally demand higher day rates
than other conventional drilling rigs, achieved more operating days
in the first quarter of 2018 compared to the same period of
2017.
Operating and maintenance expenses are directly related to
operating days and amounted to $20,389,000 ($21,848 per operating day for AKITA including
joint ventures) during the first quarter of 2018, compared to
$17,735,000 ($22,625 per operating day for AKITA including
joint ventures) during the same period of the prior year. The
increase in operating and maintenance expenses is due to more
operating days in the first quarter of 2018 compared to the first
quarter of 2017. High rig start-up costs incurred in the first
quarter of 2017 were the main factor behind the per day decrease in
operating and maintenance expense in the first three months of
2018.
Depreciation and Amortization Expense
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Depreciation and
amortization expense
|
5.9
|
6.7
|
(0.8)
|
(12%)
|
Depreciation and amortization expense decreased to $5,927,000 during the first quarter of 2018 from
$6,736,000 during the corresponding
period in 2017, primarily due to the asset write down and
impairment loss recorded in the fourth quarter of 2017 which
reduced the Company's depreciable property by $29,123,000. Also affecting depreciation in 2018
is a change in the Company's method of calculating depreciation. On
January 1, 2018, AKITA changed its
depreciation method to a straight-line calculation from a unit of
production basis. The rationale for this change was to have rig
depreciation more closely match the new lifecycle of rigs.
Historically, rigs would last until they wore out. However,
technology is a large part of modern drilling rigs and today
drilling rigs' useful lives are reduced as new technologies are
invented for modern drilling programs. As result, the passage of
time plays a more significant part than operating days in
determining a drilling rig's life. The straight-line depreciation
method matches the new lifecycle more accurately than the unit of
production depreciation method. In the first quarter of
2018, drilling rig depreciation accounted for 97% of total
depreciation expense (Q1 2017 - 97%).
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 venture activities.
Selling and Administrative Expenses
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Selling and
administrative expenses
|
4.4
|
4.0
|
0.4
|
10%
|
Selling and administrative expenses increased to $4,419,000 in the first quarter of 2018 (16% of
revenue) from $3,978,000 (16% of
revenue) in the first quarter of 2017, due to a combination of
increased administrative expenses and costs relating to US
operations. Salaries and benefits accounted for 50% of these
expenses (Q1 2017 - 43%).
Equity Income from Joint Ventures
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Proportionate share
of revenue from joint ventures
|
7.4
|
6.1
|
1.3
|
21%
|
Proportionate share
of operating & maintenance expenses from joint
ventures
|
5.3
|
4.0
|
1.3
|
33%
|
Proportionate share
of selling and administrative expenses from joint
ventures
|
0.1
|
-
|
0.1
|
100%
|
Equity income from
joint ventures
|
2.0
|
2.1
|
(0.1)
|
(5%)
|
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 increase in both revenue and expenses for the
Company's proportionate share of joint ventures is related to
increased activity for the Company's joint venture rigs in the
first quarter of 2018 compared to the first quarter of 2017.
Although there was more activity in the joint ventures in the first
quarter of 2018 compared to the same period in the prior year, the
average revenue per day decreased due to more rigs working at
market rates in 2018 versus long term contract rates in 2017.
Other Income (Loss)
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Total other income
(loss)
|
0.1
|
0.2
|
(0.1)
|
(50%)
|
Total other income (loss) 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 $17,000 in the first quarter of 2018 from
$120,000 in the same period of 2017,
due to the collection of the interest-bearing long-term receivable
held related to a contract cancellation fee recorded in 2016.
In the first quarter of 2018, the Company incurred interest
expense of $83,000 with $41,000 relating to interest on the Company's
line of credit (Q1 2017 – nil) and $42,000 relating to the future cost of the
Company's defined benefit pension plan (Q1 2017-$42,000).
During the first quarter of 2018, the Company did not sell any
ancillary assets compared to the same period in 2017 when assets
were sold for proceeds of $80,000
that resulted in a gain of $76,000.
During the first quarter of 2018, net other gains of
$124,000 related to the sale of
previously written-off assets.
Income Tax Expense
(Recovery)
|
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Current tax
recovery
|
-
|
(2.0)
|
2.0
|
100%
|
Deferred tax
expense
|
0.3
|
-
|
0.3
|
-
|
Total income tax
expense (recovery)
|
0.3
|
(2.0)
|
2.3
|
115%
|
The Company recorded a deferred tax expense of $339,000 in the first quarter of 2018 compared to
a deferred tax recovery of $29,000
and current tax recovery of $2,046,000 in the corresponding period in 2017.
The shift from current tax to deferred tax between the quarters is
due to the Company having utilized all potential loss carry backs
in 2017.
Net Loss, Funds Flow and Net Cash From Operating
Activities
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Net loss
|
(1.9)
|
(5.0)
|
3.1
|
62%
|
Funds flow from
operations(1)
|
4.5
|
1.8
|
2.7
|
150%
|
|
|
(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 $1,912,000 ($0.11
loss per share basic and diluted) for the first quarter of 2018,
compared to a net loss of $4,975,000
($0.28 earnings per share basic and
diluted) in the first quarter of 2017. Funds flow from
operations increased to $4,519,000 in
the first quarter of 2018, from $1,824,000 during the corresponding quarter in
2017. The reduction in net loss and increase in funds flow is
attributable to increased activity and higher average day-rates in
the first quarter of 2018 compared to the same period in 2017.
The following table reconciles funds flow and cash flow from
operations:
$Millions
|
|
|
|
|
Three Months Ended
March 31
|
2018
|
2017
|
Change
|
% Change
|
Funds flow from
operations(1)
|
4.5
|
1.8
|
2.7
|
150%
|
Change in non-cash
working capital
|
0.4
|
5.7
|
(5.3)
|
(93%)
|
Equity income from
joint ventures
|
(2.0)
|
(2.1)
|
0.1
|
5%
|
Post-employee
benefits and interest paid
|
(0.1)
|
-
|
(0.1)
|
-
|
Current income tax
recovery
|
-
|
(2.0)
|
2.0
|
100%
|
Net cash from
operating activities
|
2.8
|
3.4
|
(0.6)
|
(17%)
|
|
|
(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 $1,685,000 in the first quarter of 2018 (Q1 2017
- $4,587,000). Year-to-date capital
spending relates to routine capital items (69%) and costs incurred
for the expansion into the US. The prior year's first quarter
capital expenditures largely related to routine items, while 33%
related to the construction of an AC double pad drilling rig which
commenced operations in the fourth quarter of 2017.
At March 31, 2018, AKITA's
Statement of Financial Position included working capital (current
assets minus current liabilities) of $16,111,000 compared to working capital of
$29,980,000 at March 31, 2017, and working capital of
$15,528,000 at December 31, 2017. 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,
2018 decreased compared to March 31,
2017, due to lower working capital balances at December 31, 2017 compared to December 31, 2016 ($34,907,000).
The Company chooses to maintain a conservative Statement of
Financial Position due to the cyclical nature of the
industry. In addition to its cash balances, the Company has
an operating loan facility with its principal banker totalling
$50,000,000 that is available until
2019. The facility has been provided in order to finance
general corporate needs, capital expenditures and acquisitions.
Management used the facility in the first quarter of 2018 to fund
working capital requirements. The first quarter of the year is
typically the quarter with the highest cash requirement of the year
due to increased drilling activity. The interest rate on the
facility is 1.25% over prime interest rate or 2.5% over guaranteed
notes, depending on the preference of the Company. The
Company had $6,500,000 drawn on the
facility at March 31, 2018 (no
amounts were drawn in 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
in light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to
maintain or adjust the capital structure, the Company may adjust
the amount of dividends paid to shareholders, repurchase or issue
new shares, sell assets or take on long-term debt. Since
1999, dividend rates have increased eight times with no
decreases.
During the 10 year period since 2007, AKITA has repurchased and
cancelled 443,208 Class A Non-Voting shares through normal course
issuer bids and has issued 122,200 Class A Non-Voting shares upon
exercise of stock options.
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, 2018, AKITA provided $1,158,000 in deposits with its bank for those
purposes (March 31, 2017 -
$2,613,000 and December 31, 2017 - $1,525,000). 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
AKITA and its joint ventures' revenue per operating day and
AKITA and its joint ventures' operating and maintenance expenses
per operating day are not recognized GAAP measures under
International Financial Reporting Standards ("IFRS").
Management and certain investors may find "per operating day"
measures for AKITA and joint ventures' revenue indicate pricing
strength while AKITA and joint ventures' 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 drilling rigs that
are utilized can also influence these 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
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
Unaudited
|
March
31,
|
March 31,
|
December
31,
|
$
Thousands
|
2018
|
2017
|
2017
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
4,948
|
$
|
10,499
|
$
|
560
|
|
Accounts
receivable
|
25,729
|
25,926
|
27,024
|
|
Income taxes
recoverable
|
3,076
|
4,374
|
3,076
|
|
Prepaid expenses and
other
|
1,108
|
756
|
89
|
|
34,861
|
41,555
|
30,749
|
Non-current
Assets
|
|
|
|
|
Restricted
cash
|
1,158
|
2,613
|
1,525
|
|
Other long-term
assets
|
520
|
907
|
528
|
|
Investments in joint
ventures
|
5,006
|
4,253
|
4,096
|
|
Property, plant and
equipment
|
166,366
|
203,776
|
170,599
|
TOTAL
ASSETS
|
$
|
207,911
|
$
|
253,104
|
$
|
207,497
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
Liabilities
|
|
|
|
|
Operating loan
facility
|
$
|
6,500
|
$
|
-
|
$
|
-
|
|
Accounts payable and
accrued liabilities
|
10,725
|
10,050
|
13,696
|
|
Dividends
payable
|
1,525
|
1,525
|
1,525
|
|
18,750
|
11,575
|
15,221
|
Non-current
Liabilities
|
|
|
|
|
Financial
instruments
|
4
|
31
|
9
|
|
Deferred income
taxes
|
12,931
|
23,673
|
12,592
|
|
Deferred share
units
|
395
|
226
|
388
|
|
Pension
liability
|
4,927
|
4,392
|
4,832
|
Total
Liabilities
|
37,007
|
39,897
|
33,042
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Class A and Class B
shares
|
23,871
|
23,871
|
23,871
|
|
Contributed
surplus
|
4,545
|
4,346
|
4,500
|
|
Accumulated other
comprehensive loss
|
(475)
|
(366)
|
(495)
|
|
Retained
earnings
|
142,963
|
185,356
|
146,579
|
Total
Equity
|
170,904
|
213,207
|
174,455
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
207,911
|
$
|
253,104
|
$
|
207,497
|
AKITA Drilling
Ltd.
|
Interim
Consolidated Statements of Net Loss and Comprehensive
Loss
|
|
|
|
|
|
|
Unaudited
|
Three Months
Ended March 31
|
$ Thousands except
per share amounts
|
2018
|
2017
|
|
|
|
REVENUE
|
$
|
27,089
|
$
|
19,193
|
|
|
|
COSTS AND
EXPENSES
|
|
|
|
Operating and
maintenance
|
20,389
|
17,735
|
|
Depreciation and
amortization
|
5,927
|
6,736
|
|
Selling and
administrative
|
4,419
|
3,978
|
Total Costs and
Expenses
|
30,735
|
28,449
|
|
|
|
Revenue Less Costs
and Expenses
|
(3,646)
|
(9,256)
|
|
|
|
EQUITY INCOME FROM
JOINT VENTURES
|
2,015
|
2,062
|
|
|
|
OTHER INCOME
(LOSS)
|
|
|
|
Interest
income
|
17
|
120
|
|
Interest
expense
|
(83)
|
(42)
|
|
Gain on sale of
assets
|
-
|
76
|
|
Net other
gains
|
124
|
19
|
Total Other
Income
|
58
|
173
|
|
|
|
Income (Loss)
Before Income Taxes
|
(1,573)
|
(7,021)
|
|
|
|
INCOME
TAXES
|
339
|
(2,046)
|
|
|
|
NET LOSS AND
COMPREHENSIVE LOSS FOR THE PERIOD ATTRIBUTABLE TO
SHAREHOLDERS
|
$
|
(1,912)
|
$
|
(4,975)
|
|
Other comprehensive
income
|
20
|
-
|
|
|
|
Comprehensive loss
for the period attributable to shareholders
|
$
|
(1,892)
|
$
|
(4,975)
|
|
|
|
|
|
|
NET LOSS PER CLASS
A AND CLASS B SHARE
|
|
|
|
Basic
|
$
|
(0.11)
|
$
|
(0.28)
|
|
Diluted
|
$
|
(0.11)
|
$
|
(0.28)
|
AKITA Drilling
Ltd.
|
Interim
Consolidated Statements of Changes in Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
$
Thousands
|
|
Attributable to the
Shareholders of the Company
|
|
|
|
|
|
Total
|
|
Accumulated
|
|
|
|
Class
A
|
Class
B
|
Class A
and
|
|
Other
|
|
|
|
Non-Voting
|
Common
|
Class
B
|
Contributed
|
Comprehensive
|
Retained
|
Total
|
|
Shares
|
Shares
|
Shares
|
Surplus
|
Loss
|
Earnings
|
Equity
|
BALANCE AT
DECEMBER 31, 2016
|
$
|
22,505
|
$
|
1,366
|
$
|
23,871
|
$
|
4,285
|
$
|
(366)
|
$
|
191,856
|
$
|
219,646
|
Net loss for the
period
|
-
|
-
|
-
|
-
|
-
|
(4,975)
|
(4,975)
|
Stock options charged
to expense
|
-
|
-
|
-
|
61
|
-
|
-
|
61
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(1,525)
|
(1,525)
|
BALANCE AT MARCH
31, 2017
|
$
|
22,505
|
$
|
1,366
|
$
|
23,871
|
$
|
4,346
|
$
|
(366)
|
$
|
185,356
|
$
|
213,207
|
Net loss for the
period
|
-
|
-
|
-
|
-
|
-
|
(34,202)
|
(34,202)
|
Remeasurement of
pension liability
|
-
|
-
|
-
|
-
|
(129)
|
-
|
(129)
|
Stock options charged
to expense
|
-
|
-
|
-
|
154
|
-
|
-
|
154
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(4,575)
|
(4,575)
|
BALANCE AT
DECEMBER 31, 2017
|
$
|
22,505
|
$
|
1,366
|
$
|
23,871
|
$
|
4,500
|
$
|
(495)
|
$
|
146,579
|
$
|
174,455
|
January 1, 2018
increase in expected credit loss resulting from the implementation
of IFRS 9
|
-
|
|
-
|
-
|
|
(179)
|
(179)
|
Net loss for the
period
|
-
|
-
|
-
|
-
|
-
|
(1,912)
|
(1,912)
|
Foreign currency
translation adjustment
|
-
|
-
|
-
|
|
20
|
-
|
20
|
Stock options charged
to expense
|
-
|
-
|
-
|
45
|
-
|
-
|
45
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(1,525)
|
(1,525)
|
BALANCE AT MARCH
31, 2018
|
$
|
22,505
|
$
|
1,366
|
$
|
23,871
|
$
|
4,545
|
$
|
(475)
|
$
|
142,963
|
$
|
170,904
|
AKITA Drilling
Ltd.
|
Interim
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
Unaudited
|
Three Months
Ended March 31
|
$
Thousands
|
2018
|
2017
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
Net loss and
comprehensive loss
|
$
|
(1,912)
|
$
|
(4,975)
|
Non-cash items
included in net loss and comprehensive loss:
|
|
|
|
Depreciation and
amortization
|
5,927
|
6,736
|
|
Deferred income tax
expense (recovery)
|
339
|
(29)
|
|
Defined benefit
pension plan expense
|
118
|
113
|
|
Stock options and
deferred share units expense
|
52
|
65
|
|
Gain on sale of
assets
|
-
|
(76)
|
|
Unrealized gain on
financial guarantee contracts
|
(5)
|
(10)
|
Funds flow from
operations
|
4,519
|
1,824
|
Change in non-cash
working capital
|
379
|
5,679
|
Equity income from
joint ventures
|
(2,015)
|
(2,062)
|
Post-employment
benefits
|
(23)
|
(24)
|
Interest
paid
|
(41)
|
(1)
|
Income tax recovery -
current
|
-
|
(2,017)
|
Net Cash from
Operating Activities
|
2,819
|
3,399
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
Capital
expenditures
|
(1,685)
|
(4,587)
|
Change in non-cash
working capital related to capital
|
(3,213)
|
(2,485)
|
Net distributions
from investments in joint ventures
|
1,105
|
1,061
|
Change in cash
restricted for loan guarantees
|
367
|
356
|
Proceeds on sale of
assets
|
-
|
80
|
Net Cash used in
Investing Activities
|
(3,426)
|
(5,575)
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
Change in operating
loan facility
|
6,500
|
-
|
Dividends
paid
|
(1,525)
|
(1,525)
|
Loan commitment fee
paid
|
-
|
(50)
|
Net Cash from
(used in) Financing Activities
|
4,975
|
(1,575)
|
|
|
|
|
FOREIGN CURRENCY
TRANSLATION
|
20
|
-
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
4,388
|
(3,751)
|
Cash and cash
equivalents, beginning of period
|
560
|
14,250
|
|
|
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
$
|
4,948
|
$
|
10,499
|
SOURCE AKITA Drilling Ltd.