ALGARY, June 24 /CNW/ - Precision Drilling Corporation is pleased to
report their audited financial results for the year ended April 30, 1999.
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CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
Unaudited Audited
Three Months Ended Twelve Months Ended
CDN $000's, except April 30, April 30,
per share amounts 1999 1998 1999 1998
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Revenue $ 151,112 $ 238,433 $ 693,855 $ 1,012,503
Expenses:
Operating 97,899 145,182 450,135 620,265
General and
administrative 12,838 16,171 51,114 59,329
Depreciation and
amortization 18,101 14,179 75,941 71,744
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128,838 175,532 577,190 751,338
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Operating earnings 22,274 62,901 116,665 261,165
Net interest expense 3,930 4,545 18,860 17,093
Gain on disposal of
subsidiary and investment (25,050) - (34,755) (1,923)
Reduction of carrying
amount of investments 10,947 - 10,947 -
Reduction of carrying amount
of property, plant and
equipment 10,200 - 10,200 -
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Earnings before income
taxes 22,247 58,356 111,413 245,995
Income taxes:
Current 28,874 6,557 96,902 29,210
Deferred (13,602) 24,507 (38,870) 99,260
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15,272 31,064 58,032 128,470
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Net earnings 6,975 27,292 53,381 117,525
Retained earnings, beginning
of period 253,325 185,339 206,919 97,358
Adjustment on purchase and
cancellation of share
capital - (5,712) - (7,598)
Dividends on preferred shares - - - (366)
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Retained earnings, end of
period $ 260,300 $ 206,919 $ 260,300 $ 206,919
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Earnings per share
Basic $ 0.17 $ 0.65 $ 1.27 $ 2.82
Fully diluted $ 0.16 $ 0.64 $ 1.22 $ 2.67
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Weighted averages shares
outstanding (000's) 42,086 41,517
Fully diluted shares outstanding (000's) 45,308 44,554
CONSOLIDATED BALANCE SHEETS
Audited
CDN $000's as at April 30,
1999 1998
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Assets
Current assets:
Cash $ 5,620 $ 41,446
Investment in short-term commercial paper 96,947 -
Accounts receivable 127,891 214,620
Inventory 30,701 36,678
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261,159 292,744
Property, plant and equipment, at cost less
accumulated depreciation 683,548 643,695
Goodwill, net of amortization
of $27,230; 1998 - $14,583 259,779 209,042
Investments 34,380 41,972
Deferred financing costs, net of
amortization of $2,070; 1998-$943 8,850 9,977
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$1,247,716 $1,197,430
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Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness $ 6,445 $ -
Accounts payable and accrued liabilities 74,680 107,597
Income taxes payable 72,139 5,702
Current portion of long-term debt 16,734 27,490
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169,998 140,789
Long-term debt 215,014 214,554
Deferred income taxes 94,393 145,517
Shareholders' equity:
Share capital 508,011 489,651
Retained earnings 260,300 206,919
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768,311 696,570
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$1,247,716 $1,197,430
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SEGMENT INFORMATION
Twelve Months Ended,
April 30,
CDN $000's 1999 1998
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Revenues
Contract Drilling Services $356,322 $690,109
Oilfield Specialty Services 94,912 57,549
Rental and Production Services 242,561 264,566
Corporate 60 279
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Total Revenues $693,855 $1,012,503
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Operating Earnings
Contract Drilling Services $ 78,130 $ 216,247
Oilfield Specialty Services 4,069 9,458
Rental and Production Services 38,883 49,715
Corporate (4,417) (14,255)
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Total Operating Earnings $116,665 $261,165
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OPERATING
For the Twelve Months Ended April 30,
1999 1998
Market Market
Precision Industry Share % Precision Industry Share %
Number of
drilling
rigs 214 582 36.8 207 574 36.1
Number of
operating
days (Spud
to release) 26,158 73,141 35.8 51,156 129,237 39.6
Wells
drilled 2,545 8,215 31.0 6,067 15,666 38.7
Metres drilled
(000's) 3,492 10,005 34.9 7,589 18,629 40.7
Rig utilization
rate (%) 33.6 34.8 69.2 68.7
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Included in the above results are certain non-recurring items as
described below.
On February 18, 1999, the Corporation sold its 100% owned subsidiary,
Certified Rentals Inc., and recognized a gain of $23.6 million.
The gain on disposal of investment relates to the Corporation's equity
investment in Western Rock Bit Company Limited (WRB) which sold substantially
all of its assets. During the year, the Corporation recorded a gain of $11.1
million from this investment.
During the fourth quarter, the Corporation undertook an extensive
analysis of the carrying value of its assets. This analysis indicated that of
the one billion dollars of assets acquired over the last three years, an
aggregate write-down of approximately 2% or $21 million was appropriate. This
write-down relates mainly to the carrying value of Computalog shares acquired
as part of the acquisition of Kenting Energy Services Inc. in fiscal year
1998, and oilfield trailers acquired in fiscal 1997 from Ducharme Oilfield
Rentals Inc.
Excluding the after tax effect of these non-recurring items, basic and
fully diluted earnings per share for the twelve months ended April 30, 1999
would have been $1.09 and $1.06 respectively, and for the fourth quarter would
have been $0.22 for both basic and fully diluted earnings per share.
The Corporation is cautiously optimistic that the recent oil price
recovery is sustainable. If sustained, higher oil prices and continued strong
natural gas prices should have a significant impact on oilfield services
activity later in the year.
This document contains forward-looking statements based upon current
expectations that involve a number of business risks and uncertainties. The
factors that could cause results to differ materially include, but are not
limited to, national and regional economic conditions, oil and gas prices,
weather conditions and the ability of oil and gas companies to raise capital
or other unforeseen conditions which could impact on the use of services
supplied by the Corporation.
Precision Drilling Corporation is listed on The Toronto Stock Exchange
under the ticker symbol PD and on the New York Stock Exchange under the ticker
symbol PDS.
%SEDAR: 00002052E
-30-
For further information: Dale E. Tremblay, Senior Vice President Finance
and Chief Financial Officer, (403) 716-4500, Fax: (403) 264-0251, website:
www.precisiondrilling.com
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