AKITA Drilling Ltd. Announces Year-to-Date Earnings and Cash Flow
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.
Darcy Reynolds, Vice President, Finance, (403) 292-7530
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