Business
AKITA Drilling Ltd. Announces 2008 Earnings and Funds Flow
CALGARY, March 18 /CNW/ - Earnings for the year ended December 31, 2008 were $14,847,000 or $0.81...
About this update from Akita Drilling Ltd. Class A
[{"type":"text","content":"\n\n\n\nCALGARY, March 18 /CNW/ - Earnings for the year ended December 31, 2008\nwere $14,847,000 or $0.81 per share on revenue of $137,246,000. Comparative\nfigures for 2007 were $20,752,000 or $1.14 per share on revenue of\n$141,962,000. Funds flow from continuing operations for the current year was\n$34,149,000 as compared to $37,143,000 in 2007.\n\n\nThe Company's rig utilization in 2008 was 42.2% compared to the industry\naverage of 41.7% and AKITA's utilization of 40.9% in 2007. This weak industry\nwide level of rig utilization dramatically influences the Company's ability to\nobtain premium pricing for its services. Consequently, AKITA turned some of\nits attention to new opportunities as a means of optimizing its strong asset\nbase. Early in the year, one rig was deployed from Alaska to Colorado,\nrepresenting the first time AKITA moved a rig south of Canada. The Company is\nalso performing drilling services for customers having a focus on potash\nrather than AKITA's traditional oil and natural gas markets.\n\n\nDuring the year, the Company took several steps to strengthen its overall\nfleet. In the first quarter, one 2,000 metre double rig was retired. AKITA\ndisposed of one of its 5,000 metre triple rigs in the second quarter as well\nas its well servicing business. These reductions related to underperforming\nassets. During the third quarter, AKITA entered into a multi-year contract\nwith a major customer and spent the balance of the year upgrading two of its\nrigs in order to fulfil this obligation. In the fourth quarter, a new 3,200\nmetre double rig was completed at a cost of $7.3 million.\n\n\nIn addition to operational strength, the Company maintains significant\nfinancial strength, which has placed the Company in a strong position to\nweather the current market conditions. At December 31, 2008 the Company had\n$63.1 Million in working capital ($3.46 per share) including $42.2 Million in\ncash ($2.31 per share) and no long-term debt. As well, the carrying value for\nthe Company's fleet was only $146.9 Million ($3.9 Million per rig). Although\nthe evaluation of replacement cost for AKITA's fleet has not been performed,\nmanagement is confident that the cost to replace the Company's fleet is\nsignificantly higher than its carrying value.\n\n\nManagement does not anticipate a significant improvement in market\ncondi...