Xtreme Drilling Corp.
(TSX:XDC)
(
“Xtreme” or the
“Company”) announces its third quarter 2017
financial and operating results. It is anticipated that
filing will take place on SEDAR of interim Consolidated Financial
Statements as well as Management's Discussion and Analysis for the
three and nine months ended September 30, 2017, by November 3,
2017. All reported amounts are in Canadian dollars ("CAD"), unless
otherwise noted.
The third quarter of 2017 represented Xtreme’s
highest level of operating days, revenue and adjusted EBITDA since
the fourth quarter of 2015. The Company completed the re-activation
of one additional XDR 500 rig during the period, which increased
the total number of operating rigs to nine of 10 available.
The Company had approximately 2,800 operating days under term
contract at quarter end and after recent contract extensions
currently has approximately 3,300 days under term contract.
These contracted days represent a revenue backlog of approximately
$83 million. The increase in activity levels along with the
lack of rig re-activation costs should improve the Company’s daily
operating costs in the coming quarters.
Xtreme President and CEO Matt Porter commented,
“We have accomplished a significant amount since the sale of our
XSR coil business in the summer of 2016. Our team has worked
diligently to transform Xtreme into a premier US resource play
focused drilling contractor. With the design, development and
build of the industry leading Evolution Series 850XE drilling rig
and the optimization of our XDR 500 rig fleet, I believe Xtreme is
positioned ideally to compete in today’s US drilling market.”
As part of the Company’s strategic plan to focus
on US resource plays and its larger 1,500hp AC drilling fleet, the
Company announced in the second quarter that it would actively
market the XDR 200 and 300 rigs for sale. Xtreme closed on
the first step of this plan in the third quarter with the sale of
the four XDR 200 drilling rigs for total consideration of $9.2
million. The Company continues to actively market the XDR 300
rigs to several parties as well as explore other paths to
monetization. This segment of the Xtreme fleet has shallower depth
capacities and are not core to the Company’s future strategy.
The three new-build 850XE rigs are nearing
completion with the first rig, rig 801, anticipated to be in the
field within the next five weeks. Minor commissioning
delays along with time lost due to Hurricane Harvey in Houston have
pushed back the commencement date of the rig. The second and
third rigs, 802 and 803, are anticipated to be in the field by
early January and February 2018, respectively. The Evolution
Series 850XE rig design and leading-edge drilling technology is an
important component of Xtreme’s strategy to focus on deeper US
resource basins with increasingly complex well design. The
850XE rig offers a suite of technology and efficiencies not
achievable on other rigs in the US drilling industry.
Xtreme’s unique technologies that have been developed and
engineered into this rig include:
- X-Rack™ System: A Patent pending offline stand
building system that allows the customer to buildup and rack back
triple stands of drill pipe, drill collars or casing while the rig
is actively drilling. With this new capability, Xtreme’s 850XE rigs
feature this dual activity rig floor, which is unique for land rigs
of any classification. Rig’s with this system will be more
efficient than those without this system.
- X-Pad Optimizer™: A patent pending rig walking
system developed to reduce the total time required for well to well
moves on a drilling pad. This system will develop the optimal
walking path for the rig, taking into account existing well heads
and new well locations.
- X-Driller™: Xtreme’s rigs utilize a
proprietary, programmable drilling software suite. The X-Driller™
system provides precise Auto-Driller controls through the PLC
equipment communication and monitoring with programmable alarms and
limits. Overall, it allows for smoother flow of power with a
greater sensitivity to applying weight on bit and rotary
speed.
- Noise-X™: The Evolution Series 850XE rigs are
equipped with advanced sound attenuation features including noise
control generator buildings, VFD blower motor controls and noise
mitigation layouts. Noise reductions greater than 30% in the
back yard, on the drilling floor, in auxiliary buildings and in the
drillers cabin have been achieved.
- ARMS™: Xtreme’s Advanced Reliability
& Maintenance System (ARMS™) is a comprehensive computerized
reliability and maintenance software system. This proprietary
system combines all aspects of preventative maintenance,
scheduling, inspections, audits, equipment inventories, status and
transfers. This system is utilized in conjunction with
Xtreme’s embedded analytical systems to optimize equipment
reliability and maintenance with condition based monitoring.
The flattening of the US rig count in recent
months make Xtreme’s differentiated rig design and technology even
more important. The slowdown in the rig count growth is due
to several factors in our estimation. US oil production has
surged over the past 18 months and recently E&P companies have
begun to signal they will prioritize spending within their cash
flow in 2018. This has not historically been the case, as the
majority of operator’s outspent their cash flow in prior
years. If this proves to be true in 2018, then it may be
challenging for the rig count to increase much higher than current
levels. In addition, it may make pushing through day rate
increases difficult. This is one of the primary reasons that
Xtreme has invested so heavily in optimizing it’s XDR 500 fleet and
developed the premier spec rig design of the 850XE. Once the
850XE rig build program is complete in early 2018 the Xtreme fleet
will be among the highest spec rig fleets in the US land drilling
business.
As the industry moves forward in an environment
of $50 oil, Xtreme’s belief is that drilling contractors with the
highest quality rigs and leading technology should be able to
maintain their utilization levels. The fact that Xtreme has
positioned itself as a pure play high spec US drilling contractor
should lead to a higher than industry level of utilization in an
ever evolving market.
Q3 2017 Highlights
- On September 30, 2017, the Company closed on the sale of four
XDR 200 drilling rigs to a private party in Canada. Total gross
proceeds were $9.2 million and included rigs 3, 4, 5 and 10 along
with associated spares and inventory. With the sale of these rigs,
the Company no longer has any rigs or operations in Canada.
At September 30, 2017, assets held for sale of $13.1 million
included the four remaining XDR 300 series drilling rigs, certain
rig components, and related spares and inventory. With the sale of
the XDR 200 drilling rigs, the Company closed the quarter with
$20.5 million in cash and cash equivalents.
- For the three months ended September 30, 2017, the Company
reported revenue of $18.2 million as compared to $15.1 million in
the previous quarter. Revenue per day decreased to $21,354
from $22,168 in the second quarter of 2017. The decrease is
primarily due to impact of foreign exchange rate due to a stronger
Canadian dollar impacting the Company's USD based contracts.
Adjusted EBITDA was $1.0 million for the third quarter, an increase
from what was reported in the second quarter of $(1.6)
million. This was primarily due to increase in revenue, rig
utilization, lower operating costs, and a decrease in general and
administrative expenses.
- Operating expenses are tied to operating levels and were
$17,308 per operating day for the quarter ended September 30,
2017, a decrease from $19,695 per operating day in the previous
quarter. Operating expenses decreased in the third quarter
primarily due to lower costs related to rig
re-activation.
- General and Administrative expenses decreased from $3.3 million
for the second quarter to $2.4 million for the third quarter of
2017. The decrease from the previous quarter is due to lower
legal cost and lower severance costs. On a go forward basis,
the Company expects the General and Administrative expenses to be
in the range of $2.2 to $2.4 million per quarter.
- The Company’s US dollar ("USD") revenue and expenses are
impacted by the exchange rate between the US dollar and Canadian
dollar. For the three months ended September 30, 2017,
the average exchange rate used to convert the USD-denominated
revenues and expenses to CAD was $1.23/$1 USD ($1.32 for the
previous quarter).
- Capital expenditures for the third quarter were $26.7 million,
which included approximately $24.2 million related to the 850XE
upgrade program. Through September 30, 2017, total
capital expenditures amounted to $66.5 million. It is anticipated
that the Company will have capital expenditures of $16.0 to $17.0
million in the fourth quarter of 2017.
- On July 31, 2017, the Company entered into an agreement with a
third party to sell the outstanding shares of the Mexican
subsidiary. With the sale of the shares, the Company has
transferred all rights and obligations of the subsidiary to the
buyer. The sale, net of legal expenses, resulted in a loss of
approximately $1.6 million and is reflected in the third quarter
results. Included in the loss on sale is $0.7 million of non-cash
cumulative foreign currency translation adjustments that were
required under IFRS to be reclassified from OCI to income on
disposal of the Mexican subsidiary.
- On August 3, 2017, the Company signed a commitment with a
financial institution that will provide a working capital line of
credit for up to $10 million USD. The line of credit is secured by
accounts receivable and is for a period of 18 months.
Selected Quarterly Financial Information
from Continuing Operations
Three months ended |
|
Sep 30, 2017 |
|
Jun 30, 2017 |
|
Mar 31, 2017 |
|
Dec 31, 2016 |
Revenue |
|
18,172 |
|
|
15,141 |
|
|
12,379 |
|
|
9,929 |
|
Adjusted EBITDA |
|
1,008 |
|
|
(1,630 |
) |
|
(78 |
) |
|
(148 |
) |
Adjusted EBITDA as a
percentage of revenue |
|
6 |
% |
|
(11 |
)% |
|
(1 |
)% |
|
(1 |
)% |
Net loss |
|
(8,673 |
) |
|
(48,366 |
) |
|
(12,168 |
) |
|
(11,122 |
) |
Net loss per share -
basic ($) |
|
(0.12 |
) |
|
(0.61 |
) |
|
(0.14 |
) |
|
(0.13 |
) |
Operating cash flows
from continuing operations |
|
(3,096 |
) |
|
(4,957 |
) |
|
101 |
|
|
(1,032 |
) |
Capital assets |
|
203,316 |
|
|
196,704 |
|
|
245,267 |
|
|
240,656 |
|
Total assets |
|
253,171 |
|
|
272,798 |
|
|
348,083 |
|
|
366,762 |
|
Net debt |
|
(20,453 |
) |
|
(41,682 |
) |
|
(88,152 |
) |
|
(113,882 |
) |
Operating days |
|
851 |
|
|
683 |
|
|
583 |
|
|
479 |
|
Utilization
(percentage) |
|
86 |
% |
|
70 |
% |
|
36 |
% |
|
25 |
% |
Weighted average number
of rigs in service |
|
10 |
|
|
10 |
|
|
18 |
|
|
21 |
|
Total number of
available rigs, end of quarter |
|
10 |
|
|
10 |
|
|
18 |
|
|
21 |
|
|
|
Sep 30, 2016 |
|
Jun 30, 2016 |
|
Mar 31, 2016 |
|
Dec 31, 2015 |
Revenue |
|
8,468 |
|
|
7,369 |
|
|
16,266 |
|
|
23,370 |
|
Adjusted EBITDA |
|
(965 |
) |
|
(10,418 |
) |
|
784 |
|
|
753 |
|
Adjusted EBITDA as a
percentage of revenue |
|
(11 |
)% |
|
(141 |
)% |
|
5 |
% |
|
3 |
% |
Net loss |
|
(29,542 |
) |
|
(28,699 |
) |
|
(7,350 |
) |
|
(36,069 |
) |
Net loss per share -
basic ($) |
|
(0.35 |
) |
|
(0.34 |
) |
|
(0.09 |
) |
|
(0.44 |
) |
Operating cash flows
from continuing operations |
|
(1,168 |
) |
|
(10,849 |
) |
|
(615 |
) |
|
3,059 |
|
Capital assets |
|
243,564 |
|
|
266,188 |
|
|
276,521 |
|
|
305,060 |
|
Total assets |
|
373,104 |
|
|
396,505 |
|
|
316,270 |
|
|
361,809 |
|
Net debt |
|
(118,863 |
) |
|
(110,794 |
) |
|
90,242 |
|
|
96,123 |
|
Operating days |
|
433 |
|
|
354 |
|
|
565 |
|
|
932 |
|
Utilization
(percentage) |
|
22 |
% |
|
19 |
% |
|
30 |
% |
|
48 |
% |
Weighted average number
of rigs in service |
|
21 |
|
|
21 |
|
|
21 |
|
|
21 |
|
Total
number of rigs, end of quarter |
|
21 |
|
|
21 |
|
|
21 |
|
|
21 |
|
Conference Call Details
Xtreme has scheduled a conference call to
discuss results with investors, analysts, and stakeholders on
Friday, November 3, 2017, beginning promptly at
10:00 am MT (11:00 am CT, 12:00 am ET).
Matt Porter, President and Chief Executive
Officer, will host the conference call.
Conference operator dial in
numbers
To participate in the conference call, please dial in as follows
approximately ten minutes before the start time in your time
zone.
+1 844-889-6858 (North America Toll‐Free) or
+1 661-378-9711 (International)
Webcast: https://edge.media-server.com/m6/p/bot88w43
Conference ID: 95118505
An audio replay of the call will be available until 4:00,
November 8, 2017. To access the replay, call +1 (855)
859-2056 or +1 (404) 537-3406 and enter Conference ID 95118505.
Xtreme Drilling Corp. |
Interim Consolidated Statements of Financial
Position |
(in
thousands of Canadian dollars) |
|
|
|
|
|
|
|
|
Sep 30, 2017 |
|
Dec 31, 2016 |
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and
cash equivalents |
|
20,453 |
|
|
115,240 |
|
Accounts
receivable |
|
13,869 |
|
|
6,716 |
|
Other
receivables |
|
305 |
|
|
419 |
|
Inventory |
|
1,010 |
|
|
2,810 |
|
Prepaid
expenses |
|
1,114 |
|
|
921 |
|
Assets held for
sale |
|
13,104 |
|
|
— |
|
|
|
36,751 |
|
|
126,106 |
|
|
|
|
|
|
Property and
equipment |
|
203,316 |
|
|
240,656 |
|
Total Assets |
|
253,171 |
|
|
366,762 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts
payable and accrued liabilities |
|
17,807 |
|
|
14,827 |
|
Current
tax payable |
|
452 |
|
|
6,464 |
|
Total Liabilities |
|
18,259 |
|
|
21,291 |
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
Share
capital |
|
297,917 |
|
|
339,448 |
|
Contributed surplus |
|
30,448 |
|
|
13,387 |
|
Accumulated deficit |
|
(170,875 |
) |
|
(101,670 |
) |
Foreign currency translation reserve |
|
77,422 |
|
|
94,306 |
|
Total
Shareholders’ Equity |
|
234,912 |
|
|
345,471 |
|
Total
Liabilities and Shareholders’ Equity |
|
253,171 |
|
|
366,762 |
|
Xtreme Drilling Corp. |
Interim Consolidated Statements of Loss |
For the three and nine months ended September 30, 2017 and
2016 |
(in thousands of Canadian dollars, except share and per
share data) |
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
Sep 30, 2017 |
Sep 30, 2016 |
|
Sep 30, 2017 |
Sep 30, 2016 |
Revenue |
|
18,172 |
|
8,468 |
|
|
45,692 |
|
32,103 |
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
Operating
expenses |
|
14,729 |
|
7,450 |
|
|
37,992 |
|
25,509 |
|
General
and administrative expenses |
|
2,435 |
|
1,983 |
|
|
8,399 |
|
17,192 |
|
Depreciation expense |
|
5,218 |
|
15,115 |
|
|
21,450 |
|
34,321 |
|
Impairment of property and equipment |
|
4,213 |
|
11,895 |
|
|
30,196 |
|
11,895 |
|
Stock-based compensation |
|
151 |
|
1,112 |
|
|
611 |
|
3,094 |
|
Foreign
exchange loss (gain) |
|
(336 |
) |
32 |
|
|
87 |
|
(1,206 |
) |
Loss on
disposal of equipment |
|
3,440 |
|
921 |
|
|
19,129 |
|
1,562 |
|
Other
income |
|
(10 |
) |
(2 |
) |
|
(69 |
) |
— |
|
Interest expense |
|
— |
|
— |
|
|
— |
|
4,114 |
|
Loss |
|
(11,668 |
) |
(30,038 |
) |
|
(72,103 |
) |
(64,378 |
) |
|
|
|
|
|
|
|
Tax
expense |
|
|
|
|
|
|
Current |
|
(2,995 |
) |
(495 |
) |
|
(2,898 |
) |
1,212 |
|
Total tax expense |
|
(2,995 |
) |
(495 |
) |
|
(2,898 |
) |
1,212 |
|
|
|
|
|
|
|
|
Net loss from
continuing operations |
|
(8,673 |
) |
(29,543 |
) |
|
(69,205 |
) |
(65,590 |
) |
|
|
|
|
|
|
|
Net
income from discontinued operations, net of tax |
|
— |
|
(1,060 |
) |
|
— |
|
58,409 |
|
|
|
|
|
|
|
|
Net (loss) income |
|
(8,673 |
) |
(30,603 |
) |
|
(69,205 |
) |
(7,181 |
) |
|
|
|
|
|
|
|
Net loss per common
share from continuing operations |
|
|
|
|
|
|
–
basic |
|
(0.12 |
) |
(0.35 |
) |
|
(0.86 |
) |
(0.78 |
) |
–
diluted |
|
(0.12 |
) |
(0.35 |
) |
|
(0.86 |
) |
(0.78 |
) |
|
|
|
|
|
|
|
Net income per common
share from discontinued operations |
|
|
|
|
|
|
–
basic |
|
0.00 |
|
(0.01 |
) |
|
0.00 |
|
0.70 |
|
–
diluted |
|
0.00 |
|
(0.01 |
) |
|
0.00 |
|
0.70 |
|
|
|
|
|
|
|
|
Net (loss) income per
common share |
|
|
|
|
|
|
–
basic |
|
(0.12 |
) |
(0.37 |
) |
|
(0.86 |
) |
(0.09 |
) |
–
diluted |
|
(0.12 |
) |
(0.37 |
) |
|
(0.86 |
) |
(0.09 |
) |
|
|
|
|
|
|
|
Weighted average number
of common shares |
|
|
|
|
|
|
–
basic |
|
74,871,934 |
|
83,758,082 |
|
|
80,646,325 |
|
83,792,998 |
|
–
diluted |
|
74,871,934 |
|
83,758,082 |
|
|
80,646,325 |
|
83,792,998 |
|
Xtreme Drilling Corp. |
Interim Consolidated Statements of Comprehensive (Loss)
Income |
For the three and nine months ended September 30, 2017 and
2016 |
|
(in thousands of Canadian dollars) |
|
|
|
Three months ended |
|
Nine months ended |
|
|
Sep 30, 2017 |
|
Sep 30, 2016 |
|
Sep 30, 2017 |
|
Sep 30, 2016 |
Net loss |
|
(8,673 |
) |
|
(30,603 |
) |
|
(69,205 |
) |
|
(7,181 |
) |
Other comprehensive
(loss) income |
|
|
|
|
|
|
|
|
Items that may be
subsequently reclassified to profit or loss: |
|
|
|
|
|
|
|
|
Unrealized (loss) gain
on translating financial statements of foreign
operations |
|
(8,846 |
) |
|
5,091 |
|
|
(16,175 |
) |
|
(16,047 |
) |
Currency
translation adjustment on disposal of foreign operation (Note
11) |
|
(709 |
) |
|
— |
|
|
(709 |
) |
|
— |
|
Comprehensive (loss) income |
|
(18,228 |
) |
|
(25,512 |
) |
|
(86,089 |
) |
|
(23,228 |
) |
|
|
|
|
|
|
|
|
|
Total comprehensive
(loss) income arising from: |
|
|
|
|
|
|
|
|
Continuing operations |
|
(18,228 |
) |
|
(24,452 |
) |
|
(86,089 |
) |
|
(81,637 |
) |
Discontinued operations |
|
— |
|
|
(1,060 |
) |
|
— |
|
|
58,409 |
|
|
|
(18,228 |
) |
|
(25,512 |
) |
|
(86,089 |
) |
|
(23,228 |
) |
Xtreme Drilling Corp. |
Interim Consolidated Statements of Changes in
Equity |
For the nine months ended September 30, 2017 and
2016 |
(in thousands of Canadian dollars) |
|
|
Share capital |
Contributed surplus |
Accumulated deficit |
Foreign currency translation
reserve |
Total Shareholders’ Equity |
Balance at Jan 1, 2016 |
333,515 |
|
15,478 |
|
(80,831 |
) |
103,071 |
|
371,233 |
|
Net loss |
— |
|
— |
|
(7,181 |
) |
— |
|
(7,181 |
) |
Other comprehensive
loss: |
|
|
|
|
|
Currency translation differences |
— |
|
— |
|
— |
|
(16,047 |
) |
(16,047 |
) |
Total
comprehensive loss |
— |
|
— |
|
(7,181 |
) |
(16,047 |
) |
(23,228 |
) |
Employee share
option scheme: |
|
|
|
|
|
Value of
employee services |
— |
|
3,571 |
|
— |
|
— |
|
3,571 |
|
Transfer
from share option |
5,823 |
|
(5,823 |
) |
— |
|
— |
|
— |
|
Proceeds from shares issued |
42 |
|
— |
|
— |
|
— |
|
42 |
|
Total
transactions with owners |
5,865 |
|
(2,252 |
) |
— |
|
— |
|
3,613 |
|
Balance at Sep 30, 2016 |
339,380 |
|
13,226 |
|
(88,012 |
) |
87,024 |
|
351,618 |
|
|
|
|
|
|
|
Balance at Jan 1, 2017 |
339,448 |
|
13,387 |
|
(101,670 |
) |
94,306 |
|
345,471 |
|
Net loss |
— |
|
— |
|
(69,205 |
) |
— |
|
(69,205 |
) |
Other comprehensive
loss: |
|
|
|
|
|
Currency translation
differences |
— |
|
— |
|
— |
|
(16,884 |
) |
(16,884 |
) |
Total comprehensive loss |
— |
|
— |
|
(69,205 |
) |
(16,884 |
) |
(86,089 |
) |
Employee share
option scheme: |
|
|
|
|
|
Value of employee
services |
— |
|
609 |
|
— |
|
— |
|
609 |
|
Transfer from share
option |
106 |
|
(106 |
) |
— |
|
— |
|
— |
|
Proceeds from shares
issued |
112 |
|
— |
|
— |
|
— |
|
112 |
|
Repurchase of shares |
(41,749 |
) |
16,558 |
|
— |
|
— |
|
(25,191 |
) |
Total
transactions with owners |
(41,531 |
) |
17,061 |
|
— |
|
— |
|
(24,470 |
) |
September 30, 2017 |
297,917 |
|
30,448 |
|
(170,875 |
) |
77,422 |
|
234,912 |
|
Xtreme Drilling Corp. Interim Consolidated
Statements of Cash Flows For the nine months ended
September 30, 2017 and 2016 |
(in
thousands of Canadian dollars) |
|
|
|
2017 |
2016 |
Cash flow provided by: |
|
|
|
Operating
activities |
|
|
|
Net loss |
|
(69,205 |
) |
(65,590 |
) |
Items not affecting
cash: |
|
|
|
Depreciation expense |
|
21,450 |
|
34,321 |
|
Impairment of property and equipment |
|
30,196 |
|
11,895 |
|
Stock-based compensation |
|
611 |
|
3,094 |
|
Loss
(gain) on disposal of assets |
|
19,129 |
|
1,562 |
|
Provision
for doubtful accounts |
|
199 |
|
(847 |
) |
Interest
expense |
|
— |
|
4,114 |
|
Interest
paid |
|
— |
|
(4,114 |
) |
Amortization of debt issuance costs |
|
— |
|
1,972 |
|
Unrealized foreign exchange loss (gain) |
|
274 |
|
(1,206 |
) |
Current
tax expense (benefit) |
|
(2,898 |
) |
1,212 |
|
Taxes paid |
|
(2,852 |
) |
(1,105 |
) |
Operating cash flows
from continuing operations |
|
(3,096 |
) |
(14,692 |
) |
Operating cash flows
from discontinued operations |
|
(446 |
) |
10,993 |
|
Changes
in items of non-cash working capital |
|
(9,081 |
) |
24,995 |
|
Net cash (used) generated from operating
activities |
|
(12,623 |
) |
21,296 |
|
Financing
activities |
|
|
|
Repayment of long-term
debt |
|
— |
|
(100,774 |
) |
Debt issuance cost |
|
— |
|
(1,409 |
) |
Purchase of common
shares |
|
(25,191 |
) |
— |
|
Proceeds
from exercise of stock options |
|
112 |
|
42 |
|
Net cash used in (provided by) financing
activities |
|
(25,079 |
) |
(102,141 |
) |
Investing
activities |
|
|
|
Proceeds from sale of
equipment and assets held for sale, net |
|
8,841 |
|
— |
|
Disposition of Mexico
subsidiary |
|
(866 |
) |
— |
|
Capital
expenditures |
|
(66,505 |
) |
(4,942 |
) |
Investing activities of
discontinued operations (Note 9) |
|
— |
|
195,990 |
|
Changes
in items of non-cash working related to capital items (Note
14) |
|
4,407 |
|
(502 |
) |
Net cash (used in) provided by investing
activities |
|
(54,123 |
) |
190,546 |
|
Effect of
exchange rate changes on cash and cash equivalents |
|
(2,962 |
) |
(883 |
) |
(Decrease)
Increase in cash and cash equivalents |
|
(94,787 |
) |
108,818 |
|
Cash and cash equivalents - beginning of
period |
|
115,240 |
|
11,223 |
|
Cash and cash equivalents - end of period |
|
20,453 |
|
120,041 |
|
Adjusted EBITDA from Continuing Operations
|
|
Three months ended |
Nine months ended |
|
|
Sep 30, 2017 |
Sep 30, 2016 |
Sep 30, 2017 |
Sep 30, 2016 |
Net loss |
|
(8,673 |
) |
(29,543 |
) |
(69,205 |
) |
(65,590 |
) |
Interest expense |
|
— |
|
— |
|
— |
|
4,114 |
|
Depreciation |
|
5,218 |
|
15,115 |
|
21,450 |
|
34,321 |
|
Tax
expense |
|
(2,995 |
) |
(495 |
) |
(2,898 |
) |
1,212 |
|
|
|
(6,450 |
) |
(14,923 |
) |
(50,653 |
) |
(25,943 |
) |
|
|
|
|
|
|
Non-cash
items: |
|
|
|
|
|
Impairment of property
and equipment |
|
4,213 |
|
11,895 |
|
30,196 |
|
11,895 |
|
Stock-based
compensation |
|
151 |
|
1,112 |
|
611 |
|
3,094 |
|
Foreign exchange loss
(gain) |
|
(336 |
) |
32 |
|
87 |
|
(1,206 |
) |
Loss (gain) on disposal
of equipment |
|
3,440 |
|
921 |
|
19,129 |
|
1,562 |
|
|
|
7,468 |
|
13,960 |
|
50,023 |
|
15,345 |
|
|
|
|
|
|
|
Non-recurring
items: |
|
|
|
|
|
Other income |
|
(10 |
) |
(2 |
) |
(69 |
) |
— |
|
|
|
(10 |
) |
(2 |
) |
(69 |
) |
0 |
|
|
|
|
|
|
|
Adjusted EBITDA |
|
1,008 |
|
(965 |
) |
(699 |
) |
(10,598 |
) |
Adjusted EBITDA from Discontinued
Operations
|
|
Three months ended |
Nine months ended |
|
|
Sep 30, 2017 |
Sep 30, 2016 |
Sep 30, 2017 |
Sep 30, 2016 |
Net income |
|
— |
|
(1,060 |
) |
— |
|
58,409 |
|
Depreciation and
amortization |
|
— |
|
— |
|
— |
|
3,965 |
|
Tax
expense |
|
— |
|
418 |
|
— |
|
4,505 |
|
|
|
— |
|
(1,060 |
) |
|
|
66,879 |
|
|
|
|
|
|
|
Non-cash
items: |
|
|
|
|
|
Gain on sale of
equipment and assets held for sale |
|
— |
|
— |
|
— |
|
(51,668 |
) |
|
|
— |
|
— |
|
— |
|
(51,668 |
) |
|
|
|
|
|
|
Adjusted EBITDA |
|
— |
|
(1,060 |
) |
— |
|
15,211 |
|
Adjusted EBITDA from Continuing and Discontinued Operations
|
|
Three months ended |
Nine months ended |
|
|
Sep 30, 2017 |
Sep 30, 2016 |
Sep 30, 2017 |
Sep 30, 2016 |
Adjusted
EBITDA |
|
1,008 |
|
(2,025 |
) |
(699 |
) |
4,613 |
|
Adjusted
EBITDA as a percentage of revenue |
|
6 |
% |
(24 |
)% |
(2 |
)% |
14 |
% |
Net
(loss) income per share ($) |
|
(0.12 |
) |
(0.37 |
) |
(0.86 |
) |
(0.09 |
) |
Reader Advisory
This news release, or documents incorporated
herein, contains forward-looking information (“FLI”). FLI is
typically contained in statements with words such as “anticipate”,
“believe”, “estimate”, “expect”, “plan”, “schedule”, “intend”,
“propose” or similar words suggesting future outcomes or an
outlook. More particularly, this NEWS RELEASE contains FLI
that may relate to contracting, marketing, financing, construction,
modifications, deployment, operation, and utilization of drilling
rigs in the Company’s current and future fleet. Although
Xtreme believes expectations reflected in such FLI are reasonable,
readers should not place undue reliance on them because Xtreme can
give no assurance they will prove to be correct. There are many
factors that could cause FLI not to be correct, including risks and
uncertainties inherent in the Company's business.
FLI is based on certain factors and assumptions
including, but not limited to:
- the assessment of current and projected future drilling and
related operations;
- ongoing and future strategic business alliances,
- negotiations and opportunities to enter new, extend or complete
existing contracts;
- the availability and cost of financing;
- currency exchange rates; timing and magnitude of capital
expenditures;
- expenses and other variables affecting rig operation,
modification and construction;
- the ability and commitment of vendors to provide rig equipment,
services and supplies, including labor, in a cost-effective and
timely manner;
- the issuance of applied-for patents;
- changes in tax structures and rates; and,
- government regulations.
Although Xtreme considers the assumptions used
to prepare this news release reasonable, based on information
available to management as of November 2, 2017, ultimately the
assumptions may prove to be
incorrect.
FLI is also subject to certain factors, including risks and
uncertainties, which could cause actual results to differ
materially from management's current expectations. These
factors include, but are not limited to:
- the cyclical nature of drilling market demand;
- currency exchange rates;
- commodity prices;
- access to credit and to equity markets;
- the availability and retention of qualified personnel;
- vendor-provided equipment components and services; and
- competition for customers.
Management’s assumptions considered the
following:
- ongoing access to key services, supplies and equipment required
to continue operating and maintaining the rigs, including
fuel;
- continued successful performance of drilling and related
equipment;
- expectations regarding gross margin;
- recruitment and retention of qualified personnel;
- continuation or extension of existing long-term, multi-well
contracts or other contracts;
- revenue expectations related to shorter-term drilling
opportunities;
- willingness and ability of customers to remit amounts owing to
Xtreme in accordance with normal industry practices; and,
- management of accounts receivable in direct relation to revenue
generation.
In preparing this news release, the following
risk factors were considered:
- fluctuations in crude oil and natural gas prices, as well as
supply and demand;
- fluctuation in currency exchange and interest rates;
- financial stability of Xtreme’s customers;
- current and future applications for Xtreme's proprietary
technology;
- related services provided by, and competition from, other
drilling contractors;
- regulatory and economic conditions in regions where Xtreme
operates;
- environmental constraints;
- changes to government legislation;
- international trade barriers or restrictions; and,
- where appropriate, global economic, political and military
events, as well as acts of terrorism, riots, strikes,
insurrections, revolutions and civil war.
FLI contained in this news release about
prospective results of operations, financial position or cash
provided by operating activities is based on assumptions about
future events, including economic conditions and proposed courses
of action, and on management’s assessment of relevant information
currently available. Readers are cautioned such financial
outlook information contained in this news release is not
appropriate for purposes other than for which it is disclosed here.
Readers should not place undue importance on FLI and should not
rely on this information as of any other date. Except as required
pursuant to applicable securities laws, Xtreme disclaims any
intention, and assumes no obligation, to update publicly or revise
FLI to reflect actual results, whether as a result of new
information, future events, changes in assumptions, changes in
factors affecting such FLI or otherwise.
About Xtreme
Xtreme Drilling Corp. ("XDC" on the Toronto
Stock Exchange) designs, builds, and operates a fleet of high
specification AC drilling rigs featuring leading-edge proprietary
technology. Currently Xtreme operates one service line -
Drilling Services (XDR) under contracts with oil and natural gas
exploration and production companies and integrated oilfield
service providers in Canada and the United States. For more
information about the Company, please
visit www.xdccorp.com.
CONTACT INFORMATIONXtreme Drilling
Corp.Matt PorterPresident and Chief Executive Officer+1 281 994
4600ir@xtremecoil.comwww.xtremecoil.com