AKITA's Acquisition of Xtreme Results in Improved Performance in the First Quarter of 2019

CALGARY, May 1, 2019

CALGARY, May 1, 2019 /CNW/ - AKITA's September 11, 2018 acquisition of US based Xtreme Drilling Corp. ("Xtreme") and the strategy to integrate the two companies into one premium pure play drilling company with operations in Canada and the US is proving to be successful.  The realization of corporate synergies is on track to meet targets.  Post-acquisition, AKITA commands a total fleet of 40 rigs, comprised of 17 rigs in its US fleet and 23 rigs in its Canadian fleet.

AKITA announced that adjusted funds flow from operations for the quarter ended March 31, 2019 increased 73% to $7,828,000 compared to $4,519,000 in the corresponding quarter of 2018.  AKITA's improved results in the first quarter of 2019, when compared to the same period in 2018, are directly attributable to the Company's acquisition of Xtreme in the fall of 2018, increasing its US fleet from just 2 rigs in Q1 of 2018 to 17 rigs in Q1 of 2019. During the first quarter of 2019 AKITA achieved 1,140 operating days in the US. In Canada, however, results were much weaker than in the prior year as operating days dropped by 47% to 604 days in 2019 compared to 1,133 in 2018. These results translated to a consolidated net loss for the three months ended March 31, 2019 of $1,470,000 (or $0.04 per share) compared to a net loss of $1,912,000 (or $0.11 per share) for the corresponding period in 2018.

Karl Ruud, AKITA's President and Chief Executive Officer stated: "During the quarter, AKITA continued executing its plan to optimize performance, through cost control, operational excellence and continued dedication to safety, across its recently expanded US operational division and existing Canadian operations."

United States Drilling Division

AKITA's 1,140 operating days in the US equated to utilization of 74% in the first quarter of 2019 compared to 43 operating days and 23% utilization in the same period of 2018. The delta between the US results in 2019 compared to 2018 is attributable to the aforementioned Xtreme acquisition. In the first quarter of 2019, 16 of AKITA's 17 US based rigs operated compared to only two rigs operating in 2018 in the same quarter. Revenue from AKITA's US division increased to $34,500,000 in the first quarter of 2019 from $1,150,000 in the same period of 2018. With oil prices increasing from the dramatic decrease in the fourth quarter of 2018, AKITA is optimistic about its investment in its US operations. In 2019, the focus for the Company in the US will be on consolidation of operations into higher demand basins, cost rationalization, improving margins and exploring additional opportunities.

United States Drilling Division Results