third quarter results and extension to credit facility CALGARY, AB, Nov. 4, 2021 /CNW/ - AKITA Drilling Ltd. (TSX: AKT.A)
AKITA Drilling Ltd. (the "Company") announces results for the nine months ended September 30, 2021.
As prices for crude oil and natural gas increased, demand for drilling services continued to improve into the third quarter. Operating days increased to 1,169 in the third quarter of 2021 compared to 531 in the third quarter of 2020. In the third quarter of 2021, the Company recorded a net loss of $6,433,000, compared to a net loss of $8,203,000 in the same period of 2020. Adjusted funds flow from operations increased to $252,000 in the third quarter of 2021 from a loss of $669,000 in the same period of 2020 and adjusted EBITDA decreased to $1,395,000 from $1,635,000 over the same period in 2020. Increased activity did have a positive effect on the Company's results but low day rates, which decreased on average between the two quarters, tempered the potential of increased activity. To a lesser extent, startup costs in Canada of $540,000 also impacted results. Activity levels have reached a level whereby the Company is able to secure higher day rates which will go into effect in the fourth quarter of 2021.
On October 29, the Company completed the extension of its covenant relief period out to June 30, 2023 with a step down of financial covenants from a debt to EBITDA ratio of 5.00:1.00 at the fiscal quarter ended September 30, 2022 to 3.00:1.00 at the fiscal quarter ended September 30, 2023. With activity increasing and day rates improving, moving towards normalized financial covenants is a positive sign for the Company.
Linda Southern-Heathcott, AKITA's Executive Chair and Chief Executive Officer stated: "The significant improvement in the Canadian market is very exciting and is expected have an impact on the Company's results going forward. This improvement, combined with steady increases in activity and day rates in the United States, should translate to an improved 2022 for AKITA".