Xtreme Drilling and Coil Services Reports Third Quarter 2015 Financial Results
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 11/04/15 -- (TSX: XDC) - Xtreme Drilling and Coil Services Corp. ("Xtreme", the "Company") announce third quarter 2015 financial and operating results. It is anticipated that filing will take place on SEDAR of unaudited Consolidated Financial Statements and Notes to the unaudited Consolidated Financial Statements as well as Management''s Discussion and Analysis for the three months ended September 30, 2015, by Thursday November 5, 2015.
Q3 2015 Highlights
(amounts in thousands of Canadian dollars, unless otherwise noted)
(Stated in thousands of Canadian dollars, except per share, utilization, and rig amounts)
(unaudited)
Excerpt from Management''s Discussion and Analysis for the three and nine months ended September 30, 2015
OUTLOOK
The oilfield service market continued to remain challenged in the third quarter as the U.S. active rig count fell to 775 rigs and is now down by 1,154 units, or 60%, from this time last year. As mentioned by others in the industry, current pricing is down by 25% to 35% in the U.S. drilling market from this time twelve months ago. Along with the decrease in pricing there remains very little visibility into 2016 customer activity. Many customers are currently finalizing borrowing bases and attempting to forecast liquidity for next year. The combination of depressed oil and gas prices along with efficiency gains achieved through tier 1 drilling rigs should place a ceiling on the number of rigs required in 2016. For this reason Xtreme management continues to believe that North American drilling will likely not see a material increase in utilization until late 2016 with pricing likely to remain flat into 2017.
Xtreme currently has 10 of 21 XDR drilling rigs earning revenue in the United States, Canada and India with an 11th rig scheduled to commence operations in the next week. This level of activity, while down from last year, is better than the industry average. Although utilization and revenue have decreased, Xtreme''s XDR operations management team has done an excellent job reducing costs and building efficiencies in the business. Actual operating margins in the XDR segment through three quarters of 2015 are similar to the same period in 2014. The Company anticipates that as activity levels approach a trough over the next couple of quarters that XDR operating margins will slightly decrease with activity and pricing.
While the outlook for domestic drilling is muted the resiliency of the US XSR business has been very encouraging. This division has exceeded forecasted revenue and operating margin year to date and the remainder of the fourth quarter looks to continue that trend. The market appears to be validating Xtreme''s technological advantage over other coiled tubing providers. This is evidenced by the fact that the Company has increased the customer base by 100% over the past 12 months as there are now 62 E&P companies that the Company has active master service agreements with in South and West Texas. When operators begin to complete the large inventory of drilled but uncompleted wells Xtreme should be strongly positioned to increase activity levels and gain market share.
The US XSR division recently completed several technical achievements that created significant value for the respective customer and continued to add to the Company''s impressive track record. In the third quarter the Company milled out plugs in a horizontal section of 12,450 feet with 2 5/8" coiled tubing from a vertical kick off point of 6,500 feet. In addition, the Company recently milled 52 plugs without a short trip utilizing a single bottom hole assembly. In total Xtreme has performed more than 75 million round trip running feet with 2 5/8" coiled tubing since commencing operations in Texas in 2012. Over this period the trend in most major resource plays has been to increase the length of the horizontal section in order to increase well productivity. In response to customer demand Xtreme has continued to improve its industry leading technology and recently introduced a trailer configuration that is able to transport 27,000 feet of 2 5/8" coiled tubing. Unlike other large coil providers Xtreme has the ability to deploy to these depths due to its technologically advanced A/C injector and proprietary electronic logic control system. In the fourth quarter the Company anticipates performing work on a well that is in excess of 24,000 feet and will represent the longest length reached in Xtreme''s history.
In the third quarter the Company continued to aggressively strengthen the balance sheet by paying down $18 million USD of debt and finished with $83.5 million USD of funded debt and $72 million USD of net debt. The funded debt to EBITDA ratio was 1.6x at quarter end well below the 2.75 threshold in the Company''s credit facility. This is significantly better than many of Xtreme''s publicly traded oilfield service peers. Management will continue to emphasize de-leveraging and maintaining optimal liquidity through the current industry downturn.
Conference Call Details
The Company expects to announce third quarter 2015 financial and operating results after market close on Wednesday, November 4, 2015 with a follow-up conference call planned for Thursday, November 5, 2015 at 9:00 am MDT, 10:00 am CT. Tom Wood, Chief Executive Officer, will host the conference call with participation from Matt Porter, President and Chief Financial Officer, and will answer questions from analysts and investors. To participate in the conference call, please dial in as follows approximately ten minutes before the start time in your time zone.
+1 800-396-7098 (North America Toll-Free) or +1 416-340-8530 (Alternate)
Webcast link:
An audio replay of the call will be available until Thursday, November 12, 2015. To access the replay, call +1 800-408-3053 or +1 905-694-9451 and enter pass code 5530799.
Reader Advisory
This news release contains forward-looking statements ("FLS"). The use of the words "may", "believe", "could", "would", "might", "will be taken", "occur" or "be achieved" and similar expressions identify FLS. More particularly, this news release contains statements that may relate to contracting, marketing, financing, construction, modifications, deployment, operation, utilization of drilling rigs in the Company''s current and future fleet. Although Xtreme believes expectations reflected in these FLS 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 FLS not to be correct, including risks and uncertainties inherent in the Company''s business.
These statements are based on certain factors and assumptions including, but not limited to: the assessment of current and projected future operations; ongoing and future strategic business alliances, negotiations and opportunities to enter new, extend or complete existing contracts; the availability and cost of financing; foreign 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 component equipment, services and supplies, including labor, in a cost-effective and timely manner; the issuance of applied-for patents; changes in tax 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 4, 2015, ultimately the assumptions may prove to be incorrect.
Forward-looking statements are 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, foreign currency exchange rates, and commodity prices; access to credit and to equity markets; the availability of qualified personnel; vendor-provided rig components; and, competition for customers.
Management''s assumptions considered the following: compliance with the terms of the Company''s current and proposed new credit facility; ongoing access to key supplies and components required to continue operating and maintaining equipment, 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 or multi-well 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, management considered the following risk factors: fluctuations in crude oil and natural gas prices, supply and demand; fluctuation in foreign currency exchange and interest rates; financial stability of Xtreme''s customers; current and future applications for Xtreme''s proprietary technology; 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 political and military events.
Financial outlook information 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 FLS 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 FLS to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such FLS or otherwise, or to explain any material difference between subsequent actual events and such FLS.
About Xtreme
Xtreme Drilling and Coil Services Corp. ("XDC" on the Toronto Stock Exchange) designs, builds, and operates a fleet of high specification drilling rigs and coiled tubing well service units featuring leading-edge proprietary technology including AC high capacity coil injectors, deep re-entry drilling capability, modular transportation systems and continuous integration of in-house advances in methodologies.
Currently Xtreme operates two service lines: Drilling Services (XDR) and Coil Services (XSR) under contracts with oil and natural gas exploration and production companies and integrated oilfield service providers in Canada, the United States, Saudi Arabia and India. For more information about the Company, please visit .
Contacts:
Xtreme Drilling and Coil Services Corp.
Matt Porter
President and Chief Financial Officer
+1 281 994 4600
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Datum: 04.11.2015 - 17:57 Uhr
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