CALGARY,
AB, Nov. 13, 2024 /CNW/ - Drilling Inc.
("Stampede" or the "Corporation") (TSXV: SDI) announces today its
consolidated financial and operational results for the three and
nine month periods ended September
30, 2024.
The following press release should be read in conjunction
with the December 31, 2023 audited
consolidated financial statements prepared in accordance with
International Financial Reporting Standards (IFRS) applicable
to the preparation of interim financial statements, under
International Accounting Standard 34, Interim Financial Reporting
(together, "IFRS Accounting Standards"), and the annual
information form ("AIF") for the year ended December 31, 2023, as well as the condensed
unaudited consolidated interim financial statements and notes for
the three and nine month periods ended September 30, 2024 and 2023. Additional
information regarding Stampede, including the AIF, is available on
SEDAR+ at www.sedarplus.ca.
All amounts or dollar figures are denominated in thousands of
Canadian dollars except for per share amounts, number of drilling
rigs, and operating days, or unless otherwise noted.
Estimates and forward-looking information are based on
assumptions of future events and actual results may vary from these
estimates. See "Forward-Looking Information" in this press release
for additional details.
THIRD QUARTER 2024 OPERATIONAL HIGHLIGHTS
- Revenue of $24,262 – a
decrease of $1,258 (5%) from
$25,520 in the corresponding 2023
period. The decrease was primarily due to the decreased number of
operating days.
- Gross Margin(1) of 31% – a decrease of 2%
from 33% in the corresponding 2023 period. The decrease was
primarily due to the reduction in operating days and revenue,
resulting in an increase in repair and maintenance costs per
day.
- Net Income of $1,787 – a
decrease of $1,772 (50%) from
$3,559 in the corresponding 2023
period. The decrease was primarily related to the decreased revenue
as a result of lower operating days and higher depreciation expense
compared to the corresponding period of 2023.
- Adjusted EBITDA(1) of $4,905 – a decrease of $1,296 (21%) from $6,201 in the corresponding 2023 period. The
decrease was primarily due to customer drilling program deferrals
and weather delays during the quarter resulting in a reduction in
operating days, and operating margin.
- Free Cash Flow(1) of $3,394 – an increase of $8,226 (170%) from ($4,832), primarily related to the decrease of
funds used in financing activities compared to the corresponding
2023 period.
- Repurchase of 3,145 common shares – In the third quarter
of 2024 the Corporation repurchased and cancelled 3,145 common
shares under its normal course issuer bid (the "NCIB") at a
weighted average price per common share of $0.22, for total consideration of $668. The total amount of common shares
repurchased and cancelled during the third quarter of 2024
represents 1.51% of the total issued and outstanding common shares
of the Corporation.
OUTLOOK
As of the date of this press release, Stampede
has 13 out of its 19 rigs operating. Stampede anticipates
maintaining this positive momentum into the fourth quarter of 2024
and into the winter drilling season.
Ongoing geopolitical challenges affecting global energy supply
and demand will likely continue to impact the volatility on
commodity prices, which we anticipate continuing into 2025.
However, increased tidewater access for Canadian producers from the
startup of the Trans Mountain pipeline expansion during the year
and LNG Canada planned for 2025 are anticipated to help alleviate
some of these pressures.
The Corporation ended the third quarter of 2024 with a debt to
EBITDA ratio of 1.09:1.00 as Stampede continues to demonstrate
prudent debt management, maintaining financial risk at manageable
levels.
With the NCIB program renewed on June 3,
2024, the Corporation can further return value to
shareholders through share buybacks, dependent on market conditions
and growth prospects. Notably, since January
1, 2024, the Corporation has repurchased 7,000 shares for
cancellation through its NCIB, spending a total of $1,556 at an average share price of $0.22 per share.
The Corporation has repurchased approximately 12% of its total
outstanding shares since the inception of its NCIB program which
began in August 2023.
|
(1) – Refer to
"Non-GAAP and Other Financial Measures" for further
information.
|
FINANCIAL SUMMARY
|
Three months ended,
September 30
|
Nine months ended,
September 30
|
|
|
|
(000's CAD $ except
per share amounts)
|
2024
|
2023
|
%
Change
|
2024
|
2023
|
%
Change
|
|
|
|
Revenue
|
24,262
|
25,520
|
(5 %)
|
61,679
|
65,015
|
(5 %)
|
|
|
|
Direct operating
expenses
|
16,753
|
17,069
|
(2 %)
|
41,321
|
43,934
|
(6 %)
|
|
|
|
Gross
margin(1)
|
7,509
|
8,451
|
(11 %)
|
20,358
|
21,081
|
(3 %)
|
|
|
|
Net income
|
1,787
|
3,559
|
(50 %)
|
4,476
|
7,265
|
(38 %)
|
|
|
|
Basic and diluted
income per share
|
0.01
|
0.02
|
(50 %)
|
0.02
|
0.03
|
(33 %)
|
|
|
|
Adjusted
EBITDA(1)
|
4,905
|
6,201
|
(21 %)
|
13,499
|
14,746
|
(8 %)
|
|
|
|
Funds from operating
activities
|
4,777
|
6,203
|
(23 %)
|
13,291
|
14,697
|
(10 %)
|
|
|
|
Free cash
flow(1)
|
3,394
|
(4,832)
|
(170 %)
|
7,654
|
(2,648)
|
(389 %)
|
|
|
|
Weighted average common
shares outstanding (000's)
|
210,627
|
227,561
|
(7 %)
|
211,816
|
226,984
|
(7 %)
|
|
|
|
Weighted average
diluted common shares outstanding (000's)
|
210,810
|
228,931
|
(8 %)
|
212,086
|
229,753
|
(8 %)
|
|
|
|
Capital
expenditures
|
3,125
|
2,681
|
17 %
|
12,937
|
9,637
|
34 %
|
|
|
|
Number of marketed
rigs
|
19
|
19
|
0 %
|
19
|
19
|
0 %
|
|
|
|
Drilling rig
utilization(2)
|
51 %
|
56 %
|
(5 %)
|
42 %
|
46 %
|
(4 %)
|
|
|
|
CAOEC industry average
utilization(3)
|
49 %
|
33 %
|
16 %
|
43 %
|
34 %
|
9 %
|
|
|
|
(1) Refer to "Non-GAAP
and Other Financial Measures" for further information.
(2) Drilling rig utilization is calculated based on operating days
(spud to rig release).
(3) Source: The Canadian Association of Energy Contractors
("CAOEC") monthly Contractor Summary. The CAOEC industry average is
based on operating days divided by total available drilling
days.
|
|
|
|
|
|
|
DESCRIPTION OF STAMPEDE'S BUSINESS
Stampede is an energy services company
that provides premier
contract drilling services in Western Canada.
Stampede operates a fleet of 18 telescopic double drilling
rigs and 1 high spec triple drilling rig suited for most formations
within the Western Canadian Sedimentary Basin ("WCSB"). The
Corporation's head office is located in Calgary, Alberta with operations based out of
Nisku, Alberta and Estevan, Saskatchewan. The Corporation's
common shares trade on the TSX Venture Exchange (the "TSXV") under
the symbol "SDI".
RESULTS FROM OPERATIONS FOR THE NINE MONTH PERIOD ENDED
SEPTEMBER 30,
2024
|
Nine months ended,
September 30
|
|
|
|
(000's CAD $
)
|
2024
|
2023
|
%
Change
|
|
|
|
Revenue
|
61,679
|
65,015
|
(5 %)
|
|
|
|
Direct operating
expenses
|
41,321
|
43,934
|
(6 %)
|
|
|
|
Gross
margin(1)
|
20,358
|
21,081
|
(3 %)
|
|
|
|
Gross margin
%(1)
|
33 %
|
32 %
|
1 %
|
|
|
|
Net income
|
4,476
|
7,265
|
(38 %)
|
|
|
|
General and
administrative expenses
|
8,183
|
7,574
|
8 %
|
|
|
|
Adjusted
EBITDA(1)
|
13,499
|
14,746
|
(8 %)
|
|
|
|
Drilling rig operating
days(2)
|
2,197
|
2,404
|
(9 %)
|
|
|
|
Drilling rig revenue
per day(3)
|
28.1
|
27.0
|
4 %
|
|
|
|
Drilling rig
utilization(4)
|
42 %
|
46 %
|
(4 %)
|
|
|
|
CAOEC industry
average utilization(5)
|
43 %
|
34 %
|
9 %
|
|
|
|
(1) Refer to
"Non-GAAP and Other Financial Measures" for further
information.
(2) Defined as contract drilling days, between spud to
rig release.
(3) Drilling rig revenue per day is calculated by
revenue divided by drilling rig operating days.
(4) Drilling rig utilization is calculated based on
operating days (spud to rig release).
(5) Source: The Canadian Association of Energy
Contractors ("CAOEC") monthly Contractor Summary. The CAOEC
industry average is based on Operating Days divided by total
available drilling days.
|
|
|
|
|
|
|
|
|
- Revenue of $61,679 – a
decrease of $3,336 (5%) from
$65,015 in the corresponding 2023
period. The decrease was primarily due to the decreased number of
operating days.
- Operating days of 2,197 – a decrease of 207 (9%) from
2,404 operating days in the corresponding 2023 period. Operating
days decreased due to customer drilling program deferrals and
weather delays in the nine months ended September 30, 2024, resulting in lower drilling
rig utilization compared to the corresponding period of 2023.
- Gross margin percentage of 33% – an increase of 1% from
32% in the corresponding 2023 period. The increase was primarily
due to a 4% increase in revenue per day, partially offset by a 3%
increase in operating expenses per day.
- Net income of $4,476 – a
decrease of $2,789 (38%) from
$7,265 in the corresponding 2023
period. The decrease was primarily related to the decreased revenue
as a result of lower operating days and higher depreciation expense
compared to the corresponding period of 2023.
- Adjusted EBITDA of $13,499
– a decrease of $1,247 (8%) from
$14,746 in the corresponding 2023
period. The decrease was primarily related to the reduction in
operating days.
- General and administrative expenses of $8,183 – an increase of $609 (8%) from $7,574 in the corresponding 2023 period. The
increase was primarily related to the increase in share-based
compensation expense and increased salary expenses in 2024.
RESULTS FROM OPERATIONS FOR THE THREE MONTH PERIOD ENDED
SEPTEMBER 30, 2024
|
Three months ended,
September 30
|
|
|
|
(000's CAD
$)
|
2024
|
2023
|
%
Change
|
|
|
|
Revenue
|
24,262
|
25,520
|
(5 %)
|
|
|
|
Direct operating
expenses
|
16,753
|
17,069
|
(2 %)
|
|
|
|
Gross
margin(1)
|
7,509
|
8,451
|
(11 %)
|
|
|
|
Gross margin
%(1)
|
31 %
|
33 %
|
(2 %)
|
|
|
|
Net Income
|
1,787
|
3,559
|
(50 %)
|
|
|
|
General and
administrative expenses
|
3,027
|
2,711
|
12 %
|
|
|
|
Adjusted
EBITDA(1)
|
4,905
|
6,201
|
(21 %)
|
|
|
|
Drilling rig operating
days(2)
|
898
|
978
|
(8 %)
|
|
|
|
Drilling rig revenue
per day(3)
|
27.0
|
26.1
|
4 %
|
|
|
|
Drilling rig
utilization(4)
|
51 %
|
56 %
|
(5 %)
|
|
|
|
CAOEC industry average
utilization(5)
|
49 %
|
33 %
|
16 %
|
|
|
|
(1) Refer to
"Non-GAAP and Other Financial Measures" for further
information.
(2) Defined as contract drilling days, between spud to
rig release.
(3) Drilling rig revenue per day is calculated by
revenue divided by drilling rig operating days.
(4) Drilling rig utilization is calculated based on
operating days (spud to rig release).
(5) Source: The Canadian Association of Energy
Contractors ("CAOEC") monthly Contractor Summary. The CAOEC
industry average is based on Operating Days divided by total
available drilling days.
|
|
|
|
|
|
|
|
|
- Revenue of $24,262 – a
decrease of $1,258 (5%) from
$25,520 in the corresponding 2023
period. The decrease was primarily due to the decreased number of
operating days.
- Operating days of 898 – a decrease of 80 (8%) from 978
operating days in the corresponding 2023 period. Operating days
decreased due to customer drilling program deferrals and weather
delays in the third quarter of 2024, resulting in lower drilling
rig utilization compared to the corresponding period of 2023.
- Gross margin percentage of 31% – a decrease of 2% from
33% in the corresponding 2023 period. The decrease was primarily
due to the reduction in operating days and revenue, resulting in an
increase in repair and maintenance costs per day.
- Net income of $1,787 – a
decrease of $1,772 (50%) from
$3,559 in the corresponding 2023
period. The decrease was primarily related to the decreased revenue
as a result of lower operating days and higher depreciation expense
compared to the corresponding period of 2023.
- Adjusted EBITDA of $4,905
– a decrease of $1,296 (21%) from
$6,201 in the corresponding 2023
period. The decrease was primarily due to the reduction in
operating days and operating margin.
- General and administrative expenses of $3,027 – an increase of $316 (12%) from $2,711 in the corresponding 2023 period. The
increase was primarily related to the increase in general
administrative expense and salary expense in the third quarter of
2024.
NON-GAAP AND OTHER FINANCIAL MEASURES
This press release contains references to (i) adjusted EBITDA,
(ii) gross margin (iii) gross margin percentage, and (iv) free cash
flow. These financial measures are not measures that have any
standardized meaning prescribed by IFRS Accounting Standards
and are therefore referred to as non-generally accepted
accounting principles ("non-GAAP") measures. The non-GAAP
measures used by the Corporation may not be comparable to similar
measures used by other companies.
|
(i)
|
Adjusted EBITDA
- is defined as "income from operations before interest income,
interest expense, taxes, transaction costs, depreciation and
amortization, share-based compensation expense, gains on asset
disposals, impairment expenses, other income, foreign exchange,
non-recurring restructuring charges, finance costs, accretion of
debentures and other income/expenses, foreign exchange gain and any
other items that the Corporation considers appropriate to adjust
given the irregular nature and relevance to comparable operations."
Management believes that in addition to net income, adjusted EBITDA
is a useful supplemental measure as it provides an indication of
the results generated by the Corporation's principal business
activities prior to consideration of how these activities are
financed, how assets are depreciated, amortized and impaired, the
impact of foreign exchange, or how the results are affected by the
accounting standards associated with the Corporation's stock-based
compensation plan. Investors should be cautioned, however, that
adjusted EBITDA should not be construed as an alternative to net
income and comprehensive income determined in accordance with IFRS
Accounting Standards as an indicator of the Corporation's
performance. The Corporation's method of
calculating adjusted EBITDA
may differ from that of other organizations and, accordingly, its adjusted EBITDA
may not be comparable to that of other companies.
|
|
|
|
Three months ended,
September 30
|
|
Nine months ended,
September 30
|
|
(000's CAD
$)
|
2024
|
2023
|
%
Change
|
|
2024
|
2023
|
%
Change
|
|
Net income
|
1,787
|
3,559
|
(50 %)
|
|
4,476
|
7,265
|
(38 %)
|
|
Depreciation
|
2,242
|
1,821
|
23 %
|
|
6,481
|
5,179
|
25 %
|
|
Finance
costs
|
511
|
569
|
(10 %)
|
|
1,534
|
1,471
|
4 %
|
|
Other income
|
(26)
|
(12)
|
117 %
|
|
(39)
|
(15)
|
160 %
|
|
Gain on asset
disposal
|
(31)
|
(80)
|
(61 %)
|
|
(52)
|
(93)
|
(44 %)
|
|
Share-based
payments
|
317
|
355
|
(11 %)
|
|
1,007
|
918
|
10 %
|
|
Transaction
costs
|
102
|
-
|
nm
|
|
108
|
29
|
272 %
|
|
Foreign exchange loss
(gain)
|
3
|
(11)
|
(127 %)
|
|
(16)
|
(8)
|
100 %
|
|
Adjusted
EBITDA
|
4,905
|
6,201
|
(21 %)
|
|
13,499
|
14,746
|
(8 %)
|
|
|
|
(ii)
|
Gross margin -
is defined as "Income from operations before depreciation of
property and equipment". Gross margin is a measure that provides
shareholders and potential investors additional information
regarding the Corporation's cash generating and operating
performance. Management utilizes this measure to assess the
Corporation's operating performance. Investors should be cautioned,
however, that gross margin should not be construed as an
alternative to net income (loss) determined in accordance with IFRS
Accounting Standards as an
indicator of the Corporation's performance. The Corporation's method of calculating gross margin may differ from
that
of other organizations and, accordingly, its gross margin
may not be comparable to that of other companies.
|
|
|
|
(iii)
|
Gross margin percentage - is calculated as gross margin divided by revenue. The Corporation believes
gross margin as a percentage of revenue is an important
measure to determine how the Corporation is managing its revenues
and corresponding cost of sales.
The Corporation's method of calculating gross margin percentage may differ from
that of other organizations and, accordingly, its gross margin
percentage may not be comparable to that of other
companies.
|
|
|
|
The following table
reconciles the Corporation's income from operations, being the most
directly comparable financial measure disclosed in the
Corporation's interim financial statements, to gross margin and
gross margin percentage:
|
|
Three months ended,
September 30
|
|
Nine months ended,
September 30
|
|
(000's CAD
$)
|
2024
|
2023
|
%
Change
|
|
2024
|
2023
|
%
Change
|
|
Income from
operations
|
5,373
|
6,736
|
(20 %)
|
|
14,194
|
16,223
|
(13 %)
|
|
Depreciation of
property and equipment
|
2,136
|
1,715
|
25 %
|
|
6,164
|
4,858
|
27 %
|
|
Gross margin
|
7,509
|
8,451
|
(11 %)
|
|
20,358
|
21,081
|
(3 %)
|
|
Gross margin
%
|
31 %
|
33 %
|
(2 %)
|
|
33 %
|
32 %
|
1 %
|
|
|
|
(iv)
|
Free cash flow -
is calculated based on funds from operating activities less
maintenance and sustaining capital, and interest and principal debt
repayments. The Corporation uses this measure to assess the
discretionary cash that management has to invest in growth capital,
asset acquisitions, or return capital to shareholders. The
Corporation's method of calculating free cash flow may differ from
that of other organizations and, accordingly, its free cash flow
may not be comparable to that of other companies. The following
table reconciles the Corporation's funds from operating activities
to free cash flow.
|
|
|
|
Three months ended,
September 30
|
|
Nine months ended,
September 30
|
|
(000's CAD
$)
|
2024
|
2023
|
%
Change
|
|
2024
|
2023
|
%
Change
|
|
Funds from operating
activities
|
4,777
|
6,203
|
(23 %)
|
|
13,291
|
14,697
|
(10 %)
|
|
Maintenance and
sustaining capital
|
(458)
|
(1,446)
|
(68 %)
|
|
(2,329)
|
(4,954)
|
(53 %)
|
|
Interest paid on
Demand Facility
|
(81)
|
(212)
|
(62 %)
|
|
(193)
|
(565)
|
(66 %)
|
|
BDC principal
payments
|
-
|
-
|
nm
|
|
-
|
(1,500)
|
nm
|
|
Interest on BDC
loan
|
-
|
-
|
nm
|
|
-
|
(91)
|
nm
|
|
Term Loan principal
payments
|
(463)
|
(9,167)
|
(95 %)
|
|
(1,926)
|
(9,667)
|
(80 %)
|
|
Interest on Term
Loan
|
(381)
|
(210)
|
81 %
|
|
(1,189)
|
(568)
|
109 %
|
|
Total free cash
flow
|
3,394
|
(4,832)
|
(170 %)
|
|
7,654
|
(2,648)
|
(389 %)
|
|
nm - not
meaningful
|
|
|
|
|
|
|
|
FORWARD-LOOKING INFORMATION
Certain statements contained in this press release constitute
forward-looking statements or forward-looking information
(collectively, "forward-looking information"). Forward-looking
information relates to future events or the Corporation's future
performance. All information other than statements of historical
fact is forward-looking information. The use of any of the words
"anticipate", "plan", "contemplate", "continue", "estimate",
"expect", "intend", "propose", "might", "may", "will", "could",
"should", "believe", "predict", and "forecast" are intended to
identify forward-looking information.
This press release contains forward-looking information
pertaining to, among other things: the Corporation's performance;
expectations associated with the Corporation's outlook, including among other things, anticipated commodity pricing and the volatility
thereof, expectations about industry activities, market conditions
and corresponding rig utilization; future projects and the
anticipated benefits thereof to the Corporation; factors impacting
global energy supply; the Corporation's ability to return value to
shareholders through repurchases of common shares under the NCIB;
and the expected effects of seasonality and weather on the
Corporation's operations and business.
Forward-looking information is based on certain assumptions that
Stampede has made in respect thereof as at the date of this press
release regarding, among other things: the Corporation's ability to
fully crew and contract its rigs; the success of the measures
implemented by the Corporation to ensure the safe, efficient and
reliable operations at each of its drilling sites; the
creditworthiness of the Corporation's customers and counterparties;
the effectiveness of the Corporation's financial risk management
policies at ensuring all payables are paid within the pre-agreed
credit terms; that the Corporation has adequate access to its
credit facility to provide the necessary liquidity needed to manage
fluctuations in the timing of receipt and/or disbursement of
operating cash flows; expectations regarding
Stampede's share price; the impact
of inflation, weather
conditions, and expectations regarding the duration
and overall impact of the continued
conflicts in Ukraine and the Middle East; the ability of the Corporation to retain qualified staff; the
ability of the Corporation to maintain key customers; the ability
of the Corporation to obtain financing on acceptable terms; the
belief that the Corporation's principal sources of liquidity will
be sufficient to service its debt and fund its operations and other
strategic opportunities; the ability to protect and maintain the
Corporation's intellectual property; and the regulatory framework
regarding
taxes and environmental matters in the jurisdictions in which the Corporation operates.
Forward-looking information is presented
in this press release
for the purpose of assisting
investors and others in understanding certain
key elements of the Corporation's financial results and business plan, as well as the objectives, strategic priorities and business outlook
of the Corporation, and in obtaining a better understanding of the
Corporation's anticipated operating environment. Readers are
cautioned that such forward-looking information may not be appropriate for other purposes.
While Stampede believes the expectations and material factors
and assumptions reflected in the forward-looking information is
reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct.
Forward-looking information is not a guarantee of future
performance and actual results or events could differ materially
from the expectations of the Corporation expressed in or implied by
such forward-looking information. Accordingly, readers should not
place undue reliance on forward-looking information. All
forward-looking information is subject to a number of known and
unknown risks and uncertainties including, but not limited to: the
condition of the global economy, including trade, inflation, the
ongoing conflict in Ukraine, the
Middle East and other geopolitical
risks; the condition of the crude oil and natural gas industry and
related commodity prices; other commodity prices and the potential
impact on the Corporation and the industry in which the Corporation
operates, including levels of exploration and development
activities; the impact of increasing competition; fluctuations in
operating results; the ongoing significant volatility in world
markets and the resulting impact on drilling and completions
programs; foreign currency exchange rates; interest rates; labour
and material shortages; cyber security risks; natural catastrophes;
and certain other risks and uncertainties detailed under the
heading "Risks and Uncertainties" in the Corporation's annual
MD&A and under the heading "Risk Factors" in the Corporation's
AIF, each dated March 14, 2024, for
the year ended December 31, 2023, and
from time to time in Stampede's public disclosure documents
available at www.sedarplus.ca.
This list of risk factors should not be construed as exhaustive.
Readers are cautioned that events or circumstances could cause
actual results to differ materially from those predicted,
forecasted, or projected. Statements, including forward-looking
information, are
made as of the date of this press release and the Corporation does not undertake any obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws. All forward-looking information contained in this press release
is expressly qualified by this cautionary
statement.
SOURCE Stampede Drilling Inc.
