Pantera Drilling Income Trust Announces Results for the Second Quarter Ended June 30, 2009 And Declares August Distribution
Thu Aug 13, 9:15 AM
(TSX: RIG-UN.TO)
CALGARY, Aug. 13 /CNW/ - Pantera Drilling Income Trust ("Pantera" or the "Trust") is pleased to release its second quarter 2009 financial and operating results. Additional information relating to the Trust, including the Trust's financial statements and management's discussion and analysis for the three and six months ended June 30, 2009 is available under the Trust's profile on SEDAR at www.sedar.com or the Trust's website at www.panteradrilling.com.
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HIGHLIGHTS
Three months ended June 30, Six months ended June 30,
FINANCIAL 2009 2008 Change 2009 2008 Change
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(000s, except for (%) (%)
units and per
unit amounts)
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Revenue 920 3,289 (72) 10,148 11,343 (11)
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Gross margin(1) (719) 740 (197) 3,133 3,808 (18)
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Net earnings
(loss) (1,672) (780) (114) 360 483 (26)
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Per unit - basic
and diluted (.19) (.12) (58) .04 .07 (43)
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Cash flow from
operating
activities 3,077 3,204 (4) 5,848 3,284 78
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Per unit - basic .34 .48 (29) .66 .50 32
- diluted .34 .46 (28) .64 .49 31
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Cash distributions
declared per basic
unit .09 .09 - .18 .18 -
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EBITDA(2) (1,351) (118) (1,045) 1,824 2,274 (20)
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Total assets
(end of
period) 57,151 56,572 1 57,151 56,572 1
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Total long-term
financial
liabilities
(end of
period) 18,000 23,754 (24) 18,000 23,754 (24)
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Units
outstanding
(end of
period) 9,114,876 6,664,017 37 9,114,876 6,664,017 37
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OPERATING
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Number of rigs
(end of
period) 7 7 - 7 7 -
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Operating
days(3) 49 111 (56) 357 433 (18)
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Industry
utilization
average(4) 7% 19% (63) 21% 37% (43)
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Pantera
utilization
rate 4% 18% (78) 26% 34% (24)
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Notes:
(1) Gross margin represents revenue less operating expenses. Readers
are cautioned that gross margin does not have a standardized
meaning prescribed by GAAP and therefore may not be comparable to
similar measures presented by other issuers. However, Pantera does
compute gross margin on a consistent basis for each reporting
period. Management believes gross margin is a useful supplemental
measure of operating performance and is particularly relevant to
readers within the investment community. Refer to "Non-GAAP
Measures" later in this discussion for a quantitative
reconciliation of these numbers.
(2) EBITDA means net earnings before interest, taxes, depreciation,
amortization, and gain or loss on disposal of property and
equipment. Readers are cautioned that EBITDA does not have a
standardized meaning prescribed by GAAP and therefore may not be
comparable to similar measures presented by other issuers.
However, Pantera does compute EBITDA on a consistent basis for
each reporting period. Management believes that, in addition to
net earnings, EBITDA is a significant indication of success for
Pantera and is particularly relevant to readers within the
investment community. Refer to "Non-GAAP Measures" later in this
discussion for a quantitative reconciliation of these numbers.
(3) Operating days is the total of all drilling days from spud to
release and excludes stand-by, moving, rig-up and rig-out days.
(4) Source: Canadian Association of Oilwell Drilling Contractors
(CAODC).
Pantera recorded a net loss of $1.7 million for the quarter ended June 30, 2009 as compared to a net loss of $780,100 for the same period in 2008. For the six months ended June 30, 2009, net earnings decreased to $359,700 from $483,100 in 2008, a decrease of 26%.
Rig activity in the second quarter is typically the lowest in the year. 2009 was no exception, with Pantera recording 49 operating days for the quarter. Load weight restrictions placed on secondary roads in the spring restrict rig movement until at least May. The large amount of snowfall this winter extended the break-up period into June, and Operators were not motivated to start up rig activities early, risking weather related costs and delays. As a result, second quarter utilization rates were negatively affected.
On July 7, 2009, the Canadian Association of Oilwell Drilling Contractors (CAODC) released a revised forecast of drilling activity for 2009. The CAODC now expects 8,787 wells to be drilled in 2009, as compared to the 16,844 wells drilled in 2008 and 19,167 wells drilled in 2007. This was a further downgrade in the outlook for 2009 from the unprecedented mid-winter forecast correction, issued on February 20, 2009 of 11,176 wells for 2009. This projected decline, driven by the dramatic weakening of the global economic environment and the resulting drop in commodity prices, is forecasted by CAODC to result in an expected average industry drilling utilization rate of 26% in 2009, down from the 40% rate experienced in 2008. An average of 219 rigs will be drilling in 2009 out of the 858 available.
The surplus availability of rigs in Western Canada has created tremendous downward pressure to day rates. The decrease in day rates coupled with lower utilization has and is expected to continue to negatively impact revenue.
Pantera has a fleet of seven drilling rigs and management expects to have five of its rigs working under term contracts for the remainder of 2009. Three of the Trust's six telescopic double rigs have been relocated to Mexico; drilling operations commenced in late June for one of the rigs and early July for the other two. The contracts provide guaranteed revenue with minimum day requirements, achieving more stability of the Trust's revenue stream in a time of lower industry activity and greater uncertainty than experienced in recent years. Of the Trust's three telescopic double rigs that remain in Western Canada, two are under term contracts that also provide guaranteed revenue with minimum day requirements. One of the contracts was recently extended into January 2011 at a lower day rate. Of the two remaining open market rigs, one (the Trusts only telescopic single) is being utilized in Ontario primarily drilling gas storage wells for two major gas distribution companies, and one rig is in Peace River being bid on projects in the Western Alberta and NE BC areas.
The Trust today declared a cash distribution relating to the period August 1, 2009 to August 31, 2009, in the amount of $0.03 per trust unit payable on September 15, 2009 to unitholders of record on August 31, 2009.
Cash distributions are not guaranteed and will fluctuate with the performance of its operating entity, Pantera Drilling LP, which is dependent upon oil and natural gas prices, the level of activity in the oil and gas industry, seasonal weather patterns, competition, major customers, third party suppliers, key personnel and workforce availability, among other risk factors.
Certain statements included in this release constitute forward-looking statements including, without limitation, such things as revenue expectations, capital expenditures, legislative changes, changes in industry conditions, the impact of weather and other seasonal factors that affect business operations, fluctuations in prevailing commodity prices, the competitive environment to which Pantera is, or may be, exposed in all aspects of its business and expected future availability and utilization of Pantera's rigs. Such forward-looking statements that involve unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Pantera, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, general economic and business conditions, the ability of Pantera to implement its business strategy, and changes in, or failure to comply with government regulations, especially health, safety and environment laws, regulations and guidelines. Additional information on these and other factors that could affect Pantera's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) under Pantera's profile. Forward-looking statements in this release may include, but are not limited to, revenue, commodity prices, rig utilization and availability, capital expenditures and legislative changes. For this purpose, any statements that are contained in this discussion that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects", "intends", and similar expressions. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Furthermore, the forward-looking statements contained herein are made as at the date hereof and Pantera does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
The Trust is an open-ended, investment trust governed by the laws of the Province of Alberta pursuant to the Deed of Trust. The Trust was established for the purpose of investing in property, including the securities of Pantera Drilling Limited Partnership and Pantera Drilling Inc. The beneficiaries of the Trust are the holders of the trust units. The business of Pantera involves the provision of contract drilling services to oil and natural gas exploration and production companies operating in Canada.
ContactsTerry RosentreterPresident and Chief Executive Officer or Lorna Pollock
Chief Financial Officer at: Ph: (403) 515-8400
Fax: (403) 515-8405
E-mail: terryr@panteradrilling.com
lpollock@panteradrilling.com
