Le Lézard
Classified in: Business
Subject: EARNINGS

Xtreme Drilling Corp. Announces Fourth Quarter 2017 Financial and Operating Results



CALGARY, Alberta, March 08, 2018 (GLOBE NEWSWIRE) -- 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

Selected Quarterly Financial Information from Continuing Operations

     
Three months endedDec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 
Revenue16,323 18,172 15,141 12,379 
Adjusted EBITDA818 1,008 (1,630)(78)
Adjusted EBITDA as a percentage of revenue5%6 %(11)%(1)%
Net loss(9,564)(8,673)(48,366)(12,168)
Net loss per share - basic ($)(0.13)(0.12)(0.61)(0.14)
Operating cash flows from continuing operations(3,403)(3,096)(4,957)101 
Capital assets205,456 203,316 196,704 245,267 
Total assets251,573 253,171 272,798 348,083 
Net debt(2,389)(19,144)(41,682)(88,152)
Operating days707 851 683 583 
Utilization (percentage)77%93%75%36%
Weighted average number of rigs in service10 10 10 18 
Total number of available rigs, end of quarter10 10 10 18 
 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016 Mar 31, 2016 
Revenue9,929 8,468 7,369 16,266 
Adjusted EBITDA(148)(1,423)(5,449)784 
Adjusted EBITDA as a percentage of revenue(1)%(17)%(74)%5%
Net loss(11,122)(29,542)(28,699)(7,350)
Net loss per share - basic ($)(0.13)(0.35)(0.34)(0.09)
Operating cash flows from continuing operations(1,032)(1,168)(10,849)(615)
Capital assets240,656 243,564 266,188 276,521 
Total assets366,762 373,104 409,794 316,270 
Net debt(113,882)(118,863)(110,794)90,242 
Operating days479 433 355 564 
Utilization (percentage)25%22%19%30%
Weighted average number of rigs in service21 21 21 21 
Total number of rigs, end of quarter21 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: 1087317
An 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 equivalents15,450 113,829 
Accounts receivable12,081 6,716 
Other receivables1,782 1,830 
Inventory1,703 2,810 
Prepaid expenses1,140 921 
 32,156 126,106 
Tax recoverable789 ? 
Assets held for sale13,172 ? 
Property and equipment205,456 240,656 
Total Assets251,573 366,762 
Liabilities and Equity  
Current liabilities  
Accounts payable and accrued liabilities12,214 14,827 
Current tax payable219 6,464 
Secured borrowings4,419 ? 
Current portion of finance leases118 ? 
Current portion of long-term debt1,569 ? 
 18,539 21,291 
Finance leases514 ? 
Long-term debt5,755 ? 
Total Liabilities24,808 21,291 
 

Shareholders' equity
  
Share capital298,262 339,448 
Contributed surplus30,156 13,387 
Accumulated deficit(180,439)(101,670)
Foreign currency translation reserve78,786 94,306 
Total Shareholders' Equity226,765 345,471 
Total Liabilities and Shareholders' Equity251,573 366,762 
     

Xtreme Drilling Corp.
Consolidated Statements of Loss
For 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 expenses51,368 34,183 
General and administrative expenses10,528 18,596 
Depreciation expense27,488 44,920 
Impairment of property and equipment and assets held for sale30,195 11,895 
Stock-based compensation716 3,285 
Foreign exchange loss (gain)256 (1,171)
Loss on disposal of equipment and assets held for sale23,775 4,344 
Other income(74)(19)
Interest expense337 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  
? basic0.00 0.66 
? diluted0.00 0.66 
Net loss per common share  
? basic(0.99)(0.25)
? diluted(0.99)(0.25)
Weighted average number of common shares  
? basic79,173,515 84,115,077 
? diluted79,173,515 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)

 Share
capital
 Contributed
surplus
 ccumulated
deficit
 Foreign
currency
translation
reserve
 Total
shareholders'
equity
 
Balance at January 1, 2016333,515  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, 2016339,448  13,387  (101,670 )94,306  345,471  
            
Balance at January 1, 2017339,448 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, 2017298,262 30,156 (180,439)78,786 226,765 

Xtreme Drilling Corp.
Consolidated Statements of Cash Flows

For 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 expense27,488 44,920 
Impairment of property and equipment and assets held for sale30,195 11,895 
Stock-based compensation716 3,285 
Loss on disposal of equipment and assets held for sale23,775 4,344 
Provision for doubtful accounts? 892 
Interest expense322 2,142 
Interest paid(132)(2,142)
Amortization of debt issuance costs15 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 debt7,641 ? 
Repayment of long-term debt? (100,774)
Debt issuance cost(207)(1,409)
Purchase of common shares(25,245)? 
Proceeds from exercise of stock options112 73 
Net cash used in financing activities(13,293)(102,110)
Investing activities  
Proceeds from sale of equipment and assets held for sale, net8,722 137 
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 items1,773 (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 period113,829 11,223 
Cash and cash equivalents - end of period15,450 113,829 
     

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 expense337 ? 337 4,114 
Depreciation6,038 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 compensation106 191 716 3,285 
Foreign exchange loss (gain)169 35 256 (1,171)
Loss (gain) on disposal of equipment4,645 2,784 23,775 4,344 
Total non-cash items4,920 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 EBITDA818 (148)119 (6,236)
         

Adjusted EBITDA from Discontinued Operations
(unaudited)

     
 Three months ended Twelve months ended
 Dec 31, 2017Dec 31, 2016 Dec 31, 2017Dec 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 EBITDA818 (1,032)119 8,091 
Adjusted EBITDA as a percentage of revenue5%(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:

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:

Management's assumptions considered the following:

In preparing this news release, the following risk factors were considered:

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 INFORMATION
Xtreme Drilling Corp.
Matt Porter
President and Chief Executive Officer
+1 281 994 4600
ir@xdccorp.com
http://www.xtremedrillingcorp.com


These press releases may also interest you

at 01:00
Panaseer positioned to accelerate growth with advanced analytics managing and improving cybersecurity risk posture Panaseer, a cyber security software company, today announced it has secured $10 million in Series A funding. The financing round was...

at 00:00
SAN FRANCISCO, June 18, 2018 /PRNewswire-PRWeb/ -- For many small and midsized companies, collecting cash on a timely basis from customers is one of the greatest challenges a business faces. It is often a delicate balance between maintaining good...

17 jun 2018
Hawksford has acquired People & Projects Ltd (P&P), an acquisition which will significantly strengthen its current presence in Hong Kong and Singapore, and provide it with an extensive footprint across major cities in China. The transaction...

17 jun 2018
Series A round led by Balderton Capital and Accel  Annual revenues up by 400 per cent year-on-year  Clients include Schroders, Man Group & 70+ leading UK law firms  Tessian, the UK-based machine intelligence start-up transforming the way...

17 jun 2018
StudyCo is expanding all over the globe, continuing its commitment to the service of finding students universities that match their educational qualifications. Besides partnering with more than 200 universities, they have teams placed all over the...

17 jun 2018
An AJC delegation conveyed Eid al-Fitr greetings to senior Jordanian officials and discussed regional political and security challenges as a new government was sworn in following weeks of protests over the country's economic conditions. The group,...




News published on 8 march 2018 at 20:33 and distributed by: