CALGARY,
April 27, 2016 /CNW/ - AKITA
Drilling Ltd.'s net income for the three months ended March 31, 2016 was $18,173,000 ($1.01
per share basic & diluted) on revenue of $41,991,000 compared to net income of
$4,218,000 ($0.24 per share basic; $0.23 per share diluted) on revenue of
$46,715,000 for the corresponding
period in 2015. Funds flow from operations for the quarter ended
March 31, 2016 was $25,368,000 compared to $14,059,000 in the corresponding quarter in 2015.
The current year to date results included significant contract
cancellation revenue relating to an early termination of a
multi-year contract.
During the first quarter of 2016, crude oil
prices remained volatile with price fluctuations for West Texas
Intermediate ("WTI") ranging from $26.21 USD
to $41.45 USD, pricing that was significantly below the 5
year WTI average. Natural gas prices (as per AECO spot prices) were
also considerably weaker with a 30% reduction over the
corresponding period of 2015. Prolonged low commodity prices have
drastically reduced the capital spending by oil and gas companies,
which has greatly impacted the level of drilling activity in
western Canada. During the first
quarter of 2016 the western Canadian active rig count was the
lowest in over 15 years, declining from an average of 291 active
rigs in Q1 of 2015 to 153 active rigs in Q1 of 2016. Weak
market conditions had a correspondingly significant impact on
AKITA's activity levels and overall profitability from drilling
operations, achieving only 598 operating days in the first quarter
of 2016 compared to 1,635 operating days in the corresponding
period of 2015. AKITA also experienced reductions in day rates
ranging from 15% to 25% per rig category over the same time frame.
AKITA's pad rig activity represented 78% of the total operating
days, a percentage that was comparable to the first quarter of
2015.
Management's focus during 2015 and into 2016 has
been to improve AKITA's already strong balance sheet. The Company
improved working capital from $5,350,000 at March 31,
2015 to $30,759,000 at
March 31, 2016. Included in the
Company's March 31, 2016 working
capital balance are cash and term deposits of $22,034,000. In addition, the Company has a
$100,000,000 credit facility and no
outstanding debt. Management has taken steps to reduce operating
and capital costs wherever prudent. Capital expenditures for the
first three months of 2016 were $373,000 compared to $5,017,000 for the corresponding period of
2015.
Management anticipates 2016 to continue to be a
challenging year for the Company and the contract drilling industry
as a whole. Despite current challenges, management believes that it
has the resources to manage through this downturn while continuing
to look for growth opportunities.
Selected information from AKITA Drilling Ltd.'s
Management Discussion and Analysis from the Quarterly Report as
follows:
Basis of Analysis in this MD&A,
Non-Standard and Additional GAAP Items
The Company reports its joint venture activities
in the financial statements in accordance with International
Financial Reporting Standards ("IFRS"), 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 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 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-standard information ("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.
During the three months ended March 31, 2016, the Company included a material
contract cancellation fee in revenue. The effect of this fee has
been excluded in the Company's adjusted revenue and operating
margin analysis.
Operating margin, revenue per operating day,
operating and maintenance expenses per operating day and operating
margin per operating day are not recognized measures under
IFRS. Management and certain investors may find such
operating margin data to be a useful measurement tool, however, 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 revenue and
operating margin indicate pricing strength while 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 as an
additional GAAP measure 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 as well as equity income from joint
ventures adjusted for income tax amounts paid 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.
Revenue and Operating & Maintenance
Expenses
$Million
|
|
|
|
|
Three Months Ended
March 31
|
2016
|
2015
|
Change
|
%
Change
|
Revenue per Interim
Financial Statements
|
42.0
|
46.7
|
(4.7)
|
(10%)
|
Proportionate Share
of Revenue from Joint Ventures(1)
|
5.7
|
12.8
|
(7.1)
|
(55%)
|
Contract Cancellation
Revenue
|
(28.3)
|
-
|
(28.3)
|
N/A
|
Adjusted
Revenue(1)
|
19.4
|
59.5
|
(40.1)
|
(67%)
|
|
|
|
|
|
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Operating &
Maintenance Expenses per Interim Financial Statements
|
9.2
|
31.2
|
(22.0)
|
(71%)
|
Proportionate Share
of Operating & Maintenance Expenses from Joint
Ventures(1)
|
3.1
|
8.3
|
(5.2)
|
(63%)
|
Adjusted Operating
& Maintenance Expenses (1)
|
12.3
|
39.5
|
(27.2)
|
(69%)
|
|
|
|
|
|
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Adjusted
Revenue(1)
|
19.4
|
59.5
|
(40.1)
|
(67%)
|
Adjusted Operating
& Maintenance Expenses(1)
|
12.3
|
39.5
|
(27.2)
|
(69%)
|
Adjusted Operating
Margin(1)(2)
|
7.1
|
20.0
|
(12.9)
|
(65%)
|
|
|
|
|
|
$Dollars
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Adjusted Revenue per
Operating Day(1)
|
32,462
|
36,393
|
(3,931)
|
(11%)
|
Adjusted Operating
& Maintenance Expenses per Operating
Day(1)
|
20,564
|
24,165
|
(3,601)
|
(15%)
|
Adjusted Operating
Margin per Operating Day(1)
|
11,898
|
12,228
|
(330)
|
(3%)
|
(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-standard
accounting measures. See commentary in "Basis of Analysis in
this MD&A, Non-Standard and Additional GAAP
Items".
|
(2)
|
Adjusted operating
margin is the difference between adjusted revenue and adjusted
operating & maintenance expenses.
|
During the first quarter of 2016, adjusted
revenue decreased to $19,412,000
($32,462 per day) from $59,502,000 ($36,393 per day) during the first quarter of
2015. This reduction in adjusted revenue was directly
attributable to weaker market conditions that broadly influenced
AKITA's financial results. Revenue generated by pad triples
decreased by 66% in the first quarter of 2016 when compared to the
corresponding period of 2015, which had the largest impact on
adjusted revenue as revenue from this rig category accounted for
71% of total adjusted revenue. Market conditions were weak enough
that AKITA's conventional triples and pad doubles generated no
revenue in the first quarter of 2016. Weaker market conditions
affected both the amount of work for each rig category as well as
the rates that were achieved which is highlighted by the reduction
in adjusted revenue per day.
While overall adjusted revenue for the first
quarter of 2016 declined by 67% compared to the corresponding
quarter in 2015, unadjusted revenue per the financial statements
decreased by only 10%. Offsetting the reduction in adjusted revenue
was contract cancellation revenue of $28,250,000 (Q1, 2015 - $0) relating to a multi-year contract that was
cancelled in January of 2016 for one of AKITA's pad triple rigs.
Payment of the contract cancellation fee was divided into three
payments, including the first which was received during the first
quarter. The remaining amounts are included in current and
long-term receivables on the Company's Statement of Financial
Position.
Adjusted operating and maintenance costs are tied
to revenue and amounted to $12,297,000 ($20,564 per operating day) during the first
quarter of 2016 compared to $39,509,000 ($24,165 per operating day) during the same period
of the prior year. While the reduction in adjusted operating and
maintenance costs as a whole is related to fewer operating days,
the reduction in the per operating day amount relative to the
comparative period in 2015 was a result of enhanced cost controls
implemented by AKITA over the last year combined with the change in
the mix of rigs that worked.
The adjusted operating margin for the Company
decreased to $7,115,000 in the first
quarter of 2016 from $19,993,000
during the corresponding quarter of 2015. The reduction in
adjusted operating margin directly resulted from weaker drilling
activity during the quarter. When considered on a "per operating
day basis", the adjusted operating margin during the first quarter
of 2016 was only 3% lower than during the corresponding first
quarter of 2015 as cost controls and rig mix had a greater effect
on AKITA's operating costs on a per day basis compared to the
reduction in adjusted revenue per day which decreased 15% over the
same period.
Depreciation and Amortization Expense
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Depreciation and
Amortization Expense
|
6.3
|
9.1
|
(2.8)
|
(31%)
|
Depreciation and amortization expense decreased
to $6,275,000 during the first
quarter of 2016 from $9,068,000
during the corresponding period in 2015. AKITA depreciates
its rig fleet on a unit of production basis and the reduction in
depreciation and amortization was directly correlated to the
reduction in overall drilling days. In the first quarter of
2016, drilling rig depreciation accounted for 96% of total
depreciation expense (Q1, 2015 - 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.
Therefore, the joint ventures do not hold any property, plant, or
equipment assets directly. Consequently, the depreciation
balance reported above includes depreciation on assets involved in
both wholly owned and joint ventured activities.
Selling and Administrative Expense
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Selling &
Administrative Expense per Interim Financial Statements
|
4.0
|
4.7
|
(0.7)
|
(15%)
|
Proportionate Share
of Selling & Administrative Expense from Joint
Ventures(1)
|
0.1
|
0.1
|
-
|
0%
|
Adjusted Selling
& Administrative Expense(1)
|
4.1
|
4.8
|
(0.7)
|
(15%)
|
(1)
|
Proportionate
share of selling and administrative expense from joint ventures and
adjusted selling and administrative expense are non-standard
accounting measures. See commentary in "Basis of Analysis in
this MD&A, Non-Standard and Additional GAAP
Items".
|
Adjusted selling and administrative expenses were
21% of adjusted revenue in the first quarter of 2016 compared to
8.1% of adjusted revenue in the first quarter of 2015, largely as a
result of decreased adjusted revenue in 2016 and the fixed nature
of most selling and administrative expenses. Salaries and benefits
accounted for 51% of these expenses (58% in Q1, 2015).
Equity Income from Joint Ventures
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Proportionate Share
of Revenue from Joint Ventures(1)
|
5.7
|
12.8
|
(7.1)
|
(55%)
|
Proportionate Share
of Operating & Maintenance Expenses from Joint
Ventures(1)
|
3.1
|
8.3
|
(5.2)
|
(63%)
|
Proportionate Share
of Selling & Administrative Expense from Joint
Ventures(1)
|
0.1
|
0.1
|
-
|
0%
|
Equity Income from
Joint Ventures
|
2.5
|
4.4
|
(1.9)
|
(43%)
|
(1)
|
Proportionate
share of revenue from joint ventures, proportionate share of
operating & maintenance expenses from joint ventures and
proportionate share of selling & administrative expense from
joint ventures are non-standard accounting measures. See
commentary in "Basis of Analysis in this MD&A, Non-Standard 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. Joint venture activities are often located in some
of the most prospective regions in Canada. Two thirds of rigs
utilized by AKITA's joint ventures are pad drilling rigs.
Other Income (Losses)
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Total Other Income
(Losses)
|
0.0
|
(0.1)
|
(0.1)
|
(100%)
|
The Company invests any cash balances in excess
of its ongoing operating requirements in bank guaranteed highly
liquid investments. Interest income increased to $248,000 in the first three months of 2016 from
$31,000 in the corresponding period
of 2015 as a result of higher cash balances and the investment in
term deposit balances as well as accrued interest on a long term
receivable relating to the contract cancellation discussed
above.
In the first quarter of 2016, the Company
recorded interest expense of $40,000
related to the future cost of the Company's unfunded defined
benefit pension plan. During the corresponding quarter in 2015,
AKITA recorded interest expense of $206,000 as a result of the Company's
indebtedness as well as to accrue the related future cost of the
Company's unfunded defined benefit pension plan.
During the first quarter of 2016, the Company
sold ancillary assets for proceeds of $60,000 that resulted in a loss of $27,000 during the quarter. During the
corresponding quarter of 2015, assets were sold for $705,000 resulting in a loss of $190,000.
Of the amounts recorded as "Net Other Gains
(Losses)" during the first quarter of 2016, $197,000 related to the discount of the long term
receivable associated with the contract cancellation fee. During
the corresponding quarter in 2015, approximately 80% ($184,000) of amounts recorded as "Net Other
Gains" during the first quarter were related to foreign exchange,
both realized and unrealized, that were associated with ongoing rig
construction.
Income Tax Expense
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Current Tax
Expense
|
6.1
|
1.4
|
4.7
|
336%
|
Deferred Tax
Expense
|
0.8
|
0.3
|
0.5
|
167%
|
Income Tax
Expense
|
6.9
|
1.7
|
5.2
|
306%
|
Income tax expense increased to $6,895,000 in the first quarter of 2016 compared
to $1,717,000 in the corresponding
period in 2015 due to higher pre-tax earnings.
Net Income, Funds Flow and Net Cash From Operating
Activities
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Net Income
|
18.2
|
4.2
|
14.0
|
333%
|
Funds Flow From
Operations(1)
|
25.4
|
14.1
|
11.3
|
80%
|
(1)
|
Funds flow from
operations is an additional GAAP measure under IFRS. See
commentary in "Basis of Analysis in this MD&A, Non-Standard and
Additional GAAP Items".
|
Net income attributable to shareholders increased
to $18,173,000 ($1.01 basic and diluted earnings per share) for
the first quarter of 2016 from $4,218,000 ($0.24
basic earnings per share / $0.23
diluted earnings per share) in the first quarter of 2015.
Funds flow from operations increased to $25,368,000 in the first quarter of 2016 from
$14,059,000 during the corresponding
quarter in 2015. Higher net income in 2016 was directly
attributable to contract cancellation revenue and lower
depreciation expense which more than offset the effects of
reductions in drilling activity and reduced day rates. Funds
flow from operations was similarly affected by the contract
cancellation revenue; however, as funds flow from operations is not
affected by depreciation expense, the increase in funds flow
compared to the corresponding quarter during 2015 was less than the
increase to net income.
The following table reconciles funds flow and cash flow from
operations:
$Million
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Funds Flow from
Operations(1)
|
25.4
|
14.1
|
11.3
|
80%
|
Change in Non-Cash
Working Capital
|
(3.6)
|
(3.5)
|
(0.1)
|
(3%)
|
Equity Income from
Joint Ventures
|
(2.5)
|
(4.4)
|
1.9
|
43%
|
Change in Long-term
Receivable
|
(9.3)
|
-
|
(9.3)
|
N/A
|
Interest
Paid
|
-
|
(0.2)
|
0.2
|
100%
|
Current Income Tax
Expense
|
6.1
|
1.4
|
4.7
|
336%
|
Income Tax
Recoverable
|
(3.3)
|
(1.4)
|
(1.9)
|
(136%)
|
Net Cash from
Operating Activities
|
12.8
|
6.0
|
6.8
|
113%
|
(1)
|
Funds flow from
operations is an additional GAAP measure under IFRS. See
commentary in "Basis of Analysis in this MD&A, Non-Standard and
Additional GAAP Items".
|
Fleet and Rig Utilization
AKITA had 31 drilling rigs during the first
quarter of 2016, including ten that operated under joint ventures
(27.725 net to AKITA), compared to 35 rigs (31.725 net) during the
corresponding period of 2015 (1 new rig added and 5 rigs
decommissioned). There were no changes to the Company's rig
fleet during the first quarter of 2016.
|
|
|
|
|
Three Months
Ended March 31
|
2016
|
2015
|
Change
|
%
Change
|
Operating
Days
|
598
|
1,635
|
(1,037)
|
(63%)
|
Utilization
Rate
|
21.2%
|
51.9%
|
(30.7)
|
(59%)
|
Liquidity and Capital Resources
Cash used for capital expenditures totalled
$373,000 in the first quarter of 2016
(Q1 2015 - $5,017,000). Current
year-to-date capital expenditures were related to routine items.
Approximately 70% of the prior year's first quarter capital
expenditures was related to construction of a new pad rig which was
completed in mid-2015.
At March 31, 2016,
AKITA's Statement of Financial Position included working capital
(current assets minus current liabilities) of $30,759,000 compared to working capital of
$5,350,000 at March 31, 2015 and working capital of
$16,002,000 at December 31, 2015. 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,
2016 improved compared to March 31,
2015 as a result of cost control over capital and operating
expenses as well as inclusion of the contract cancellation first
payment receipt and receivables.
The Company did not have a normal course issuer
bid in place during the first quarter of 2016 or 2015.
The Company chooses to maintain a conservative
Statement of Financial Position due to the cyclical nature of the
industry. In addition to its cash and term deposit balances,
the Company has an operating loan facility with its principal
banker totalling $100,000,000 that is
available until 2020. Although the facility has been provided
in order to finance general corporate needs, capital expenditures
and acquisitions, 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 varies based upon the actual amounts borrowed, and ranges
from 0.45% to 1.45% over prime interest rates or 1.45% to 2.45%
over guaranteed notes, depending on the preference of the
Company. The Company did not have any borrowings from this
facility at March 31, 2016.
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
requirements.
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.
During the 10 year period since 2006, AKITA has
repurchased 739,908 Class A Non-Voting shares through normal course
issuer bids and issued 140,200 Class A Non-Voting shares upon
exercise of stock options.
The Company had two rigs under multi-year
contracts at March 31, 2016. Of
these contracts, one is anticipated 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, 2016, AKITA provided
$5,317,000 in deposits with its bank
for those purposes (March 31, 2015 -
$9,381,000 and December 31, 2015 - $5,978,000). 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 Consolidated Statements of Financial
Position.
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 as follows:
AKITA Drilling
Ltd.
|
|
|
|
|
|
|
Interim
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
Unaudited
|
|
March
31
|
|
March 31
|
|
December
31
|
$
Thousands
|
|
2016
|
|
2015
|
|
2015
|
Assets
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash
|
$
|
6,034
|
$
|
1,354
|
$
|
9,369
|
|
Term
deposits
|
|
16,000
|
|
-
|
|
-
|
|
Accounts
receivable
|
|
16,410
|
|
38,604
|
|
14,310
|
|
Income taxes
recoverable
|
|
-
|
|
1,800
|
|
3,279
|
|
Prepaid expenses and
other
|
|
663
|
|
983
|
|
75
|
|
|
|
39,107
|
|
42,741
|
|
27,033
|
|
|
|
|
|
|
|
Non-current
Assets
|
|
|
|
|
|
|
Long-term
receivable
|
|
9,323
|
|
-
|
|
-
|
Restricted
cash
|
|
5,317
|
|
9,381
|
|
5,978
|
Other long-term
assets
|
|
989
|
|
998
|
|
917
|
Investment in joint
ventures
|
|
3,944
|
|
3,976
|
|
3,941
|
Property, plant and
equipment
|
|
210,686
|
|
274,126
|
|
216,647
|
Total
Assets
|
$
|
269,366
|
$
|
331,222
|
$
|
254,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
Operating loan
facility
|
$
|
-
|
$
|
19,814
|
$
|
-
|
|
Accounts payable and
accrued liabilities
|
|
3,958
|
|
15,925
|
|
9,506
|
|
Deferred
revenue
|
|
-
|
|
127
|
|
-
|
|
Dividends
payable
|
|
1,525
|
|
1,525
|
|
1,525
|
|
Income taxes
payable
|
|
2,865
|
|
-
|
|
-
|
|
|
8,348
|
|
37,391
|
|
11,031
|
|
|
|
|
|
|
|
Non-current
Liabilities
|
|
|
|
|
|
|
Financial
instruments
|
|
96
|
|
195
|
|
117
|
Deferred income
taxes
|
|
19,951
|
|
27,409
|
|
19,203
|
Deferred share
units
|
|
178
|
|
76
|
|
171
|
Pension
liability
|
|
3,880
|
|
3,534
|
|
3,794
|
Total
Liabilities
|
|
32,453
|
|
68,605
|
|
34,316
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
Class A and Class B
shares
|
|
23,871
|
|
23,871
|
|
23,871
|
Contributed
surplus
|
|
4,011
|
|
3,640
|
|
3,946
|
Accumulated other
comprehensive loss
|
|
(244)
|
|
(280)
|
|
(244)
|
Retained
earnings
|
|
209,275
|
|
235,386
|
|
192,627
|
Total
Equity
|
|
236,913
|
|
262,617
|
|
220,200
|
Total Liabilities
and Equity
|
$
|
269,366
|
$
|
331,222
|
$
|
254,516
|
AKITA Drilling
Ltd.
|
Interim
Consolidated Statements of Net Income and Comprehensive
Income
|
|
Unaudited
|
|
Three Months
Ended March 31
|
$ Thousands except
per share amounts
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
Revenue
|
|
$
|
41,991
|
$
|
46,715
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
Operating and
maintenance
|
|
|
9,154
|
|
31,244
|
|
Depreciation and
amortization
|
|
|
6,275
|
|
9,068
|
|
Selling and
administrative
|
|
|
3,963
|
|
4,711
|
Total costs and
expenses
|
|
|
19,392
|
|
45,023
|
|
|
|
|
|
|
|
Revenue less costs
and expenses
|
|
|
22,599
|
|
1,692
|
|
|
|
|
|
|
|
Equity income from
joint ventures
|
|
|
2,455
|
|
4,379
|
|
|
|
|
|
|
|
Other income
(loss)
|
|
|
|
|
|
|
Interest
income
|
|
|
248
|
|
31
|
|
Interest
expense
|
|
|
(40)
|
|
(206)
|
|
Loss on sale of
assets
|
|
|
(27)
|
|
(190)
|
|
Net other (losses)
gains
|
|
|
(167)
|
|
229
|
Total other income
(loss)
|
|
|
14
|
|
(136)
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
|
25,068
|
|
5,935
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
6,895
|
|
1,717
|
|
|
|
|
|
|
|
Net income for the
period attributable to shareholders
|
|
|
18,173
|
|
4,218
|
|
Other comprehensive
income
|
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Comprehensive
income for the period attributable to
shareholders
|
|
$
|
18,173
|
$
|
4,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per Class
A and Class B Share
|
|
|
|
|
|
|
Basic
|
|
$
|
1.01
|
$
|
0.24
|
|
Diluted
|
|
$
|
1.01
|
$
|
0.23
|
AKITA Drilling
Ltd.
|
|
|
|
Interim
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
Unaudited
|
|
Three Months
Ended March 31
|
$
Thousands
|
|
2016
|
2015
|
|
|
|
|
|
Operating
Activities
|
|
|
|
Net income and
comprehensive income
|
|
$
18,173
|
$
4,218
|
Non-cash items
included in net income and comprehensive income:
|
|
|
|
|
Depreciation and
amortization
|
|
6,275
|
9,068
|
|
Deferred income taxes
expense
|
|
748
|
356
|
|
Defined benefit
pension plan expense
|
|
94
|
116
|
|
Stock options and
deferred share units expense
|
|
72
|
69
|
|
Loss on sale of
assets
|
|
27
|
190
|
|
Unrealized foreign
currency loss
|
|
-
|
73
|
|
Unrealized gain on
financial guarantee contracts
|
|
(21)
|
(31)
|
Funds flow from
operations
|
|
25,368
|
14,059
|
Change in non-cash
working capital
|
|
(3,604)
|
(3,487)
|
Equity income from
joint ventures
|
|
(2,455)
|
(4,379)
|
Change in long-term
receivable
|
|
(9,323)
|
-
|
Pension benefits
paid
|
|
(8)
|
(8)
|
Interest
paid
|
|
-
|
(170)
|
Income taxes
expense - current
|
|
6,147
|
1,361
|
Income taxes paid
(recoverable)
|
|
(3,282)
|
(1,361)
|
Net cash from
operating activities
|
|
12,843
|
6,015
|
|
|
|
|
|
Investing
Activities
|
|
|
|
Capital
expenditures
|
|
(373)
|
(5,017)
|
Change in non-cash
working capital related to capital
|
|
(1,353)
|
(7,267)
|
Net distributions
from investment in joint ventures
|
|
2,452
|
6,617
|
Change in cash
restricted for joint ventures
|
|
661
|
-
|
Change in term
deposits
|
|
(16,000)
|
-
|
Proceeds on sale of
assets
|
|
60
|
705
|
Net cash used in
investing activities
|
|
(14,553)
|
(4,962)
|
|
|
|
|
|
Financing
Activities
|
|
|
|
Change in operating
loan facility
|
|
-
|
(186)
|
Dividends
paid
|
|
(1,525)
|
(1,525)
|
Loan commitment fee
paid
|
|
(100)
|
-
|
Net cash used in
financing activities
|
|
(1,625)
|
(1,711)
|
|
|
|
|
|
Decrease in
cash
|
|
(3,335)
|
(658)
|
Cash, beginning of
period
|
|
9,369
|
2,012
|
|
|
|
|
|
Cash, End of
Period
|
|
$
6,034
|
$
1,354
|
SOURCE AKITA Drilling Ltd.