Xtreme Drilling Corp.
(TSX:XDC) (
“Xtreme” or the
“Company”) announces its fourth quarter 2017
financial and operating results. It is anticipated that filing will
take place on SEDAR of Consolidated Financial Statements as well as
Management's Discussion and Analysis for the three and twelve
months ended December 31, 2017, by March 9, 2018. All reported
amounts are in Canadian dollars ("CAD"), unless otherwise noted.
The recent trend of strong utilization for
Xtreme’s XDR 500 rig fleet continued in the fourth quarter of 2017.
All nine of the available XDR 500 rigs worked during the quarter.
Two of these rigs were released from well to well contracts in
November and commenced operations with a new customer in January
2018 on one-year term contracts. Along with strong utilization in
the fourth quarter, the average revenue per operating day increased
by approximately 12 percent from the prior quarter. Xtreme
increased contract backlog days to nearly 3,900 at the end of 2017
as compared to approximately 300 at the end of 2016. The current
contract backlog represents approximately $77 million US dollars
("USD") in revenue.
In 2017 the Company re-activated four XDR 500
rigs which had been idled in prior years. As a reference point, the
bottom of the US market was in the second quarter of 2016 when less
than 375 drilling rigs were operating. During this period Xtreme’s
activity decreased to four active XDR 500 rigs. Today approximately
965 drilling rigs are operating in the United States. The majority
of rigs that have returned to work are the most efficient and
technologically advanced. The increased requirement on efficiency
and depth capacity will continue to reward drilling contractors
with innovative technology and the highest quality fleets.
The development and build of the first
generation of Xtreme’s Evolution Series 850XE rig represents a
significant competitive leap forward for the Company. The 850XE was
designed to meet all of the leading-edge requirements from US
resource play operators. The goal of the initial design and
engineering of the 850XE was to optimize the mechanization of the
drilling rig, all while increasing drilling depth capability and
pad efficiency. It is Xtreme’s belief that the 850XE represents the
highest capacity and most technologically advanced rig in today’s
US land market.
The first 850XE commenced operations in January
2018 on a two-year term contract. The second 850XE is currently in
transit to the Utica play in Southwestern Ohio and the final 850 XE
should begin mobilization to the same customer in Ohio by the end
of March. The Company took more time than was initially estimated
to commission the 850XE rigs in order to make certain that the
cutting-edge technology and rig componentry were optimized. While
the additional time had the effect of increasing overall project
cost to near $19 million USD per rig, the end result is a rig with
proprietary technology and limited rivals in today’s market. In
addition, the 850 XE design gives Xtreme a very strong platform to
meet the future demands of ever increasing well depths and operator
requirements.
Upon completion of the final 850XE, Xtreme will
have executed on the announced strategy of transforming the Company
into a pure play, high specification US drilling contractor. The
entire 12 rig marketed fleet will consist of tier 1 AC electric
rigs with 1,500hp or greater capacity. As part of the strategic
transition to a high spec drilling contractor, the Company
continues to actively hold for sale four XDR 300 rigs. These are
heavy single AC rigs with 600 hp draw works that have historically
worked in Canada, Mexico, India and the United States.
Xtreme president and CEO Matt Porter commented
on the progress, “Our transformation to a high spec US driller is
nearing completion. We are excited to develop additional
opportunities around our industry leading technology and 850XE rig
design in 2018 and beyond. Our belief is the winners in the next
cycle will be drilling contractors that can deliver the highest
level of capacity, efficiency and technology to their customer. We
believe Xtreme is well positioned to compete with anyone.”
Q4 2017 Highlights
- Operating days for the quarter were 707, a decrease from 851in
the third quarter. The decrease in operating days from the prior
quarter was based on two XDR 500 rigs that released from well to
well contracts earlier than anticipated in November. Both rigs were
subsequently contracted to one-year term contracts and began
operations in January of 2018. In addition, in the third quarter
the Company had approximately 19 days related to rigs working in
Canada. These rigs were sold on September 30, 2017. Utilization was
77 percent for the fourth quarter.
- For the three months ended December 31, 2017, the Company
reported revenue of $16.3 million as compared to $18.2 million in
the previous quarter. Revenue per day increased to $23,088 in the
fourth quarter from $21,354 in the third quarter of 2017.
- Operating expenses include all direct and indirect costs
associated with the operation, maintenance and support of the
drilling operations. Direct costs are tied and to operating levels;
however, indirect costs are often not affected by changes in
operating days and utilization as they are more fixed in nature.
For the three months ended December 31, 2017, operating expenses
were $18,919 per operating day, an increase from $17,310 per
operating day in the previous quarter. Operating expenses per
operating day increased in the fourth quarter primarily due to an
increase in personnel costs, a slight increase in repair and
maintenance, along with a decrease in operating days.
- General and Administrative expenses decreased from $2.4 million
for the third quarter to $2.1 million for the fourth quarter of
2017. The decrease from the previous quarter is due to lower
professional fees related to legal and infrastructure costs and
lower administrative costs related to international offices. 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.
- Adjusted EBITDA was $0.8 million for the fourth quarter, a
slight decrease from what was reported in the third quarter of $1.0
million. This was primarily due to decrease in revenue and rig
utilization.
- The Company entered into an agreement with an equipment finance
company to borrow $6 million USD- equivalent secured by one of the
850XE rigs. The loan has an implied interest rate of 12.46 percent
and amortized over a 42-month period. There are no restrictive
covenants associated with this debt. On February 27, 2018, the
Company amended its agreement with a commercial lender to provide
an additional amount of $3 million USD under the collateralized
debt agreement. The loan was funded on March 1, 2018.
- The Company’s USD revenue and
expenses are impacted by the exchange rate between the US dollar
and Canadian dollar. For the three months ended December 31, 2017,
the average exchange rate used to convert the USD-denominated
revenues and expenses to CAD was $1.27/$1 USD ($1.25 for the
previous quarter).
- Capital expenditures for the fourth
quarter were $9.1 million, which included approximately $8.8
million related to the 850XE upgrade program. Through December 31,
2017, total capital expenditures amounted to $75.7 million. It is
anticipated that the Company will have capital expenditures of
$10.0 to $12.0 million in the first quarter, relating primarily to
remaining costs for the 850XE rigs and associated ancillary
equipment and drill pipe.
Selected Quarterly Financial Information from Continuing
Operations
| |
|
|
|
|
|
Three months ended |
Dec 31, 2017 |
|
Sep 30, 2017 |
|
Jun 30, 2017 |
|
Mar 31, 2017 |
|
| Revenue |
16,323 |
|
18,172 |
|
15,141 |
|
12,379 |
|
| Adjusted EBITDA |
818 |
|
1,008 |
|
(1,630 |
) |
(78 |
) |
| Adjusted EBITDA as a
percentage of revenue |
5 |
% |
6 |
% |
(11 |
)% |
(1 |
)% |
| Net loss |
(9,564 |
) |
(8,673 |
) |
(48,366 |
) |
(12,168 |
) |
| Net loss per share -
basic ($) |
(0.13 |
) |
(0.12 |
) |
(0.61 |
) |
(0.14 |
) |
| Operating cash flows
from continuing operations |
(3,403 |
) |
(3,096 |
) |
(4,957 |
) |
101 |
|
| Capital assets |
205,456 |
|
203,316 |
|
196,704 |
|
245,267 |
|
| Total assets |
251,573 |
|
253,171 |
|
272,798 |
|
348,083 |
|
| Net
debt |
(2,389 |
) |
(19,144 |
) |
(41,682 |
) |
(88,152 |
) |
| Operating days |
707 |
|
851 |
|
683 |
|
583 |
|
| Utilization
(percentage) |
77 |
% |
93 |
% |
75 |
% |
36 |
% |
| Weighted average number
of rigs in service |
10 |
|
10 |
|
10 |
|
18 |
|
| Total number of
available rigs, end of quarter |
10 |
|
10 |
|
10 |
|
18 |
|
|
|
Dec 31, 2016 |
|
Sep 30, 2016 |
|
Jun 30, 2016 |
|
Mar 31, 2016 |
|
| Revenue |
9,929 |
|
8,468 |
|
7,369 |
|
16,266 |
|
| Adjusted EBITDA |
(148 |
) |
(1,423 |
) |
(5,449 |
) |
784 |
|
| Adjusted EBITDA as a
percentage of revenue |
(1 |
)% |
(17 |
)% |
(74 |
)% |
5 |
% |
| Net loss |
(11,122 |
) |
(29,542 |
) |
(28,699 |
) |
(7,350 |
) |
| Net loss per share -
basic ($) |
(0.13 |
) |
(0.35 |
) |
(0.34 |
) |
(0.09 |
) |
| Operating cash flows
from continuing operations |
(1,032 |
) |
(1,168 |
) |
(10,849 |
) |
(615 |
) |
| Capital assets |
240,656 |
|
243,564 |
|
266,188 |
|
276,521 |
|
| Total assets |
366,762 |
|
373,104 |
|
409,794 |
|
316,270 |
|
| Net
debt |
(113,882 |
) |
(118,863 |
) |
(110,794 |
) |
90,242 |
|
| Operating days |
479 |
|
433 |
|
355 |
|
564 |
|
| Utilization
(percentage) |
25 |
% |
22 |
% |
19 |
% |
30 |
% |
| 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, March 9, 2018, 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/38vw9vuo
Conference ID: 1087317An audio replay of the call
will be available until 4:00, March 14, 2018. To access the replay,
call +1 (855) 859-2056 or +1 (404) 537-3406 and enter Conference ID
1087317.
Xtreme Drilling Corp.Consolidated Statements of
Financial Position(in thousands of Canadian
dollars)(unaudited)
|
|
|
|
|
|
Dec 31, 2017 |
|
Dec 31, 2016 |
|
|
Assets |
|
|
| Current assets |
|
|
| Cash and
cash equivalents |
15,450 |
|
113,829 |
|
| Accounts
receivable |
12,081 |
|
6,716 |
|
| Other
receivables |
1,782 |
|
1,830 |
|
|
Inventory |
1,703 |
|
2,810 |
|
|
Prepaid expenses |
1,140 |
|
921 |
|
| |
32,156 |
|
126,106 |
|
| Tax recoverable |
789 |
|
— |
|
| Assets held for
sale |
13,172 |
|
— |
|
| Property
and equipment |
205,456 |
|
240,656 |
|
|
Total Assets |
251,573 |
|
366,762 |
|
| Liabilities and
Equity |
|
|
| Current
liabilities |
|
|
| Accounts
payable and accrued liabilities |
12,214 |
|
14,827 |
|
| Current
tax payable |
219 |
|
6,464 |
|
| Secured
borrowings |
4,419 |
|
— |
|
| Current
portion of finance leases |
118 |
|
— |
|
|
Current portion of long-term debt |
1,569 |
|
— |
|
| |
18,539 |
|
21,291 |
|
| Finance leases |
514 |
|
— |
|
| Long-term
debt |
5,755 |
|
— |
|
|
Total Liabilities |
24,808 |
|
21,291 |
|
| Shareholders’
equity |
|
|
| Share
capital |
298,262 |
|
339,448 |
|
|
Contributed surplus |
30,156 |
|
13,387 |
|
|
Accumulated deficit |
(180,439 |
) |
(101,670 |
) |
|
Foreign currency translation reserve |
78,786 |
|
94,306 |
|
| Total
Shareholders’ Equity |
226,765 |
|
345,471 |
|
|
Total Liabilities and Shareholders’ Equity |
251,573 |
|
366,762 |
|
| |
|
|
|
|
Xtreme Drilling Corp. Consolidated Statements of LossFor
the year ended December 31, 2017 and 2016(in thousands of
Canadian dollars, except share and per share data)(unaudited)
|
|
|
|
|
|
|
|
2017 |
|
2016 |
|
|
Revenue (Note 19) |
62,015 |
|
42,032 |
|
|
Expenses |
|
|
| Operating
expenses |
51,368 |
|
34,183 |
|
| General
and administrative expenses |
10,528 |
|
18,596 |
|
|
Depreciation expense |
27,488 |
|
44,920 |
|
|
Impairment of property and equipment and assets held for sale |
30,195 |
|
11,895 |
|
|
Stock-based compensation |
716 |
|
3,285 |
|
| Foreign
exchange loss (gain) |
256 |
|
(1,171 |
) |
| Loss on
disposal of equipment and assets held for sale |
23,775 |
|
4,344 |
|
| Other
income |
(74 |
) |
(19 |
) |
|
Interest expense |
337 |
|
4,114 |
|
|
Loss |
(82,574 |
) |
(78,115 |
) |
|
Tax recovery Current recovery |
(3,805 |
) |
(1,402 |
) |
| Total tax
recovery |
(3,805 |
) |
(1,402 |
) |
| Net loss from
continuing operations |
(78,769 |
) |
(76,713 |
) |
| Net
income from discontinued operations, net of tax |
— |
|
55,874 |
|
|
Net loss |
(78,769 |
) |
(20,839 |
) |
| Net loss per
common share from continuing operations |
|
|
| –
basic |
(0.99 |
) |
(0.91 |
) |
| –
diluted |
(0.99 |
) |
(0.91 |
) |
| Net income per common
share from discontinued operations |
|
|
| –
basic |
0.00 |
|
0.66 |
|
| –
diluted |
0.00 |
|
0.66 |
|
| Net loss per common
share |
|
|
| –
basic |
(0.99 |
) |
(0.25 |
) |
| –
diluted |
(0.99 |
) |
(0.25 |
) |
| Weighted average number
of common shares |
|
|
| –
basic |
79,173,515 |
|
84,115,077 |
|
| –
diluted |
79,173,515 |
|
84,115,077 |
|
|
|
|
|
|
|
Xtreme Drilling Corp.Consolidated Statements of
Comprehensive Loss For the year ended December 31,
2017 and 2016(in thousands of Canadian
dollars)(unaudited)
|
|
2017 |
|
2016 |
|
|
Net loss |
(78,769 |
) |
(20,839 |
) |
| Other comprehensive
loss |
|
|
|
|
| Items that may be
subsequently reclassified to profit or loss: |
|
|
|
|
|
Unrealized loss on translating financial statements of foreign
operations |
(14,811 |
) |
(8,765 |
) |
|
Currency translation adjustment on disposal of foreign
operation |
(709 |
) |
— |
|
|
Comprehensive loss |
(94,289 |
) |
(29,604 |
) |
| Total comprehensive
(loss) income arising from: |
|
|
|
Continuing operations |
(94,289 |
) |
(76,420 |
) |
|
Discontinued operations |
— |
|
46,816 |
|
|
Comprehensive loss |
(94,289 |
) |
(29,604 |
) |
Xtreme Drilling Corp.Consolidated Statements of Changes
in Equity For the year ended December 31, 2017 and
2016(in thousands of Canadian dollars)(unaudited)
| |
Sharecapital |
|
Contributed surplus |
|
ccumulated deficit |
|
Foreign currency translation reserve |
|
Total shareholders' equity |
|
| Balance at January 1, 2016 |
333,515 |
|
15,478 |
|
(80,831 |
) |
103,071 |
|
371,233 |
|
| Other comprehensive loss: |
|
|
|
|
|
|
| Currency translation differences |
- |
|
- |
|
- |
|
(8,765 |
) |
(8,765 |
) |
| Total comprehensive loss |
- |
|
- |
|
(20,839 |
) |
(8,765 |
) |
(29,604 |
) |
| Value of employee services |
- |
|
3,769 |
|
- |
|
- |
|
3,769 |
|
| Transfer from share option |
5,860 |
|
(5,860 |
) |
- |
|
- |
|
- |
|
| Proceeds from shares issued |
73 |
|
- |
|
- |
|
- |
|
73 |
|
| Total transactions with owners |
5,933 |
|
(2,091 |
) |
- |
|
- |
|
3,842 |
|
| Balance at December 31, 2016 |
339,448 |
|
13,387 |
|
(101,670 |
) |
94,306 |
|
345,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at January 1, 2017 |
339,448 |
|
13,387 |
|
(101,670 |
) |
94,306 |
|
345,471 |
|
| Net loss |
- |
|
- |
|
(78,769 |
) |
- |
|
(78,769 |
) |
| Other comprehensive loss: |
|
|
|
|
|
|
| Currency translation differences |
- |
|
- |
|
- |
|
(15,520 |
) |
(15,520 |
) |
| Total comprehensive loss |
- |
|
- |
|
(78,769 |
) |
(15,520 |
) |
(94,289 |
) |
| Employee share option scheme: |
|
|
|
|
|
|
| Value of employee services |
- |
|
716 |
|
- |
|
- |
|
716 |
|
| Transfer from share option |
505 |
|
(505 |
) |
- |
|
- |
|
- |
|
| Proceeds from shares issued |
112 |
|
- |
|
- |
|
- |
|
112 |
|
| Repurchase of shares |
(41,803 |
) |
16,558 |
|
- |
|
- |
|
(25,245 |
) |
| Total transactions with owners |
(41,186 |
) |
16,769 |
|
- |
|
- |
|
(24,417 |
) |
| Balance at December 31, 2017 |
298,262 |
|
30,156 |
|
(180,439 |
) |
78,786 |
|
226,765 |
|
Xtreme Drilling Corp.Consolidated Statements of Cash
FlowsFor the year ended December 31, 2017 and
2016(in thousands of Canadian dollars)(unaudited)
|
|
|
|
|
|
|
|
2017 |
|
2016 |
|
| Cash flow
provided by: |
|
|
| Operating
activities |
|
|
| Net loss |
(78,769 |
) |
(76,713 |
) |
| Items not affecting
cash: |
|
|
|
Depreciation expense |
27,488 |
|
44,920 |
|
|
Impairment of property and equipment and assets held for sale |
30,195 |
|
11,895 |
|
|
Stock-based compensation |
716 |
|
3,285 |
|
| Loss on
disposal of equipment and assets held for sale |
23,775 |
|
4,344 |
|
| Provision
for doubtful accounts |
— |
|
892 |
|
| Interest
expense |
322 |
|
2,142 |
|
| Interest
paid |
(132 |
) |
(2,142 |
) |
|
Amortization of debt issuance costs |
15 |
|
1,972 |
|
|
Unrealized foreign exchange loss (gain) |
4 |
|
(2,119 |
) |
| Current
tax recovery |
(3,805 |
) |
(1,402 |
) |
|
Taxes paid |
(2,939 |
) |
(738 |
) |
| Operating cash flows
from continuing operations |
(3,130 |
) |
(13,664 |
) |
| Operating cash flows
from discontinued operations |
(446 |
) |
9,247 |
|
| Changes
in items of non-cash working capital |
(10,658 |
) |
27,004 |
|
|
Net cash (used) generated from operating
activities |
(14,234 |
) |
22,587 |
|
| Financing
activities |
|
|
| Drawdowns (repayments)
of secured borrowings |
4,436 |
|
— |
|
| Proceeds from long-term
debt |
7,641 |
|
— |
|
| Repayment of long-term
debt |
— |
|
(100,774 |
) |
| Debt issuance cost |
(207 |
) |
(1,409 |
) |
| Purchase of common
shares |
(25,245 |
) |
— |
|
| Proceeds
from exercise of stock options |
112 |
|
73 |
|
|
Net cash used in financing activities |
(13,293 |
) |
(102,110 |
) |
| Investing
activities |
|
|
| Proceeds from sale of
equipment and assets held for sale, net |
8,722 |
|
137 |
|
| Disposition of Mexico
subsidiary |
(883 |
) |
— |
|
| Capital
expenditures |
(75,656 |
) |
(11,091 |
) |
| Investing activities of
discontinued operations |
— |
|
195,597 |
|
| Changes
in items of non-cash working related to capital items |
1,773 |
|
(1,566 |
) |
|
Net cash (used in) provided by investing
activities |
(66,044 |
) |
183,077 |
|
| Effect of
exchange rate changes on cash and cash equivalents |
(4,808 |
) |
(948 |
) |
| (Decrease)
increase in cash and cash equivalents |
(98,379 |
) |
102,606 |
|
|
Cash and cash equivalents - beginning of
period |
113,829 |
|
11,223 |
|
|
Cash and cash equivalents - end of period |
15,450 |
|
113,829 |
|
| |
|
|
|
|
Adjusted EBITDA from Continuing
Operations(unaudited)
| |
|
|
|
|
|
|
Three months ended |
Twelve months ended |
|
|
Dec 31, 2017 |
|
Dec 31, 2016 |
|
Dec 31, 2017 |
|
Dec 31, 2016 |
|
| Net loss |
(9,564 |
) |
(11,122 |
) |
(78,769 |
) |
(76,713 |
) |
| Interest expense |
337 |
|
— |
|
337 |
|
4,114 |
|
| Depreciation |
6,038 |
|
10,599 |
|
27,488 |
|
44,920 |
|
| Tax
benefit |
(907 |
) |
(2,614 |
) |
(3,805 |
) |
(1,402 |
) |
|
Total |
(4,096 |
) |
(3,137 |
) |
(54,749 |
) |
(29,081 |
) |
|
Non-cash items: |
|
|
|
|
|
Impairment of property and equipment |
— |
|
— |
|
30,195 |
|
11,895 |
|
|
Stock-based compensation |
106 |
|
191 |
|
716 |
|
3,285 |
|
| Foreign
exchange loss (gain) |
169 |
|
35 |
|
256 |
|
(1,171 |
) |
|
Loss (gain) on disposal of equipment |
4,645 |
|
2,784 |
|
23,775 |
|
4,344 |
|
| Total
non-cash items |
4,920 |
|
3,010 |
|
54,942 |
|
18,353 |
|
|
Non-recurring items: |
|
|
|
|
| Other
income |
(6 |
) |
(21 |
) |
(74 |
) |
(19 |
) |
|
Termination revenue |
— |
|
— |
|
— |
|
(459 |
) |
|
Other management compensation related to XSR sale |
— |
|
— |
|
— |
|
4,970 |
|
| Total
non-recurring items |
(6 |
) |
(21 |
) |
(74 |
) |
4,492 |
|
|
|
|
|
|
|
| Adjusted
EBITDA |
818 |
|
(148 |
) |
119 |
|
(6,236 |
) |
| |
|
|
|
|
|
|
|
|
Adjusted EBITDA from Discontinued
Operations(unaudited)
| |
|
|
|
|
| |
Three months ended |
Twelve months ended |
|
|
Dec 31, 2017 |
Dec 31, 2016 |
|
Dec 31, 2017 |
Dec 31, 2016 |
|
| Net (loss) income |
— |
(2,535) |
|
— |
55,874 |
|
| Depreciation and
amortization |
— |
— |
|
— |
3,965 |
|
| Tax
expense |
— |
1,651 |
|
— |
6,156 |
|
|
Total |
— |
(884 |
) |
— |
65,995 |
|
| Non-cash
items: |
|
|
|
|
|
|
|
Gain on sale of equipment and assets held for sale |
— |
— |
|
— |
(51,668 |
) |
| Total
non-cash items |
— |
— |
|
— |
(51,668 |
) |
|
|
|
|
|
|
| Adjusted
EBITDA |
— |
(884 |
) |
— |
14,327 |
|
| |
|
|
|
|
|
|
Adjusted EBITDA from Continuing and Discontinued
Operations(unaudited)
| |
|
|
|
|
|
|
|
|
| |
Three months ended |
Twelve months ended |
|
|
Dec 31, 2017 |
|
Dec 31, 2016 |
|
Dec 31, 2017 |
|
Dec 31, 2016 |
|
| Adjusted
EBITDA |
818 |
|
(1,032 |
) |
119 |
|
8,091 |
|
| Adjusted
EBITDA as a percentage of revenue |
5 |
% |
(10 |
)% |
0 |
% |
10 |
% |
| Net
(loss) income per share ($) |
(0.13 |
) |
(0.37 |
) |
(0.99 |
) |
(0.25 |
) |
| |
|
|
|
|
|
|
|
|
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 this press release, 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
http://www.xtremedrillingcorp.com.
CONTACT INFORMATIONXtreme
Drilling Corp.Matt PorterPresident and Chief Executive Officer+1
281 994 4600ir@xdccorp.com http://www.xtremedrillingcorp.com