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ALGARY, AB , March 24, 2022 /CNW/ – Stampede Drilling Inc. (“Stampede” or the “Corporation”) (TSXV: SDI) announces today its financial and operational results for the three months and year ended December 31, 2021 .
The following should be read in conjunction with the Corporation’s consolidated financial statements and the notes thereto for the year ended December 31, 2021 , related management’s discussion and analysis and annual information form, which are available on SEDAR at www.sedar.com .
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.
FINANCIAL SUMMARY
|
Three months ended |
Twelve months ended |
||||||||||||
|
(000’s CAD $ except per share amounts) |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2019 |
||||||
|
Revenue |
9,180 |
2,515 |
265% |
32,163 |
14,394 |
123% |
23,697 |
||||||
|
Direct operating expenses |
6,011 |
1,496 |
302% |
20,135 |
9,529 |
111% |
15,500 |
||||||
|
Gross margin (1) |
3,169 |
1,019 |
211% |
12,028 |
4,865 |
147% |
8,197 |
||||||
|
Net income (loss) |
372 |
(2,386) |
116% |
2,852 |
(4,042) |
171% |
(1,247) |
||||||
|
Basic income (loss) per share |
0.00 |
(0.01) |
nm |
0.02 |
(0.03) |
nm |
(0.01) |
||||||
|
Diluted income (loss) per share |
0.00 |
(0.01) |
nm |
0.02 |
(0.03) |
nm |
(0.01) |
||||||
|
Adjusted EBITDA (1) |
1,949 |
479 |
(307%) |
8,361 |
2,377 |
252% |
4,126 |
||||||
|
Weighted average common shares outstanding |
132,171 |
132,046 |
0% |
132,171 |
132,046 |
0% |
131,851 |
||||||
|
Weighted average diluted common shares outstanding |
144,972 |
132,046 |
10% |
144,972 |
132,046 |
10% |
131,851 |
||||||
|
Capital expenditures |
2,667 |
4 |
nm |
4,086 |
709 |
476% |
9,580 |
||||||
|
Average active rig count |
10 |
10 |
nm |
10 |
10 |
nm |
10 |
||||||
|
Drilling rig utilization (2) |
47% |
12% |
292% |
44% |
19% |
132% |
34% |
||||||
|
CAOEC industry average utilization (3) |
29% |
16% |
81% |
25% |
16% |
56% |
22% |
||||||
|
nm – not meaningful |
|||||||||||||
|
As at December 31, |
|||||||||||||
|
(000’s CAD $) |
2021 |
2020 |
% Change |
||||||||||
|
Current assets |
7,651 |
4,197 |
82% |
||||||||||
|
Total assets |
50,755 |
47,784 |
6% |
||||||||||
|
Total current liabilities |
10,129 |
10,008 |
1% |
||||||||||
|
Total non-current liabilities |
4,447 |
5,005 |
(11%) |
||||||||||
|
Shareholders’ equity |
36,179 |
32,771 |
10% |
||||||||||
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 10 telescopic double drilling rigs suited for most formations within the WCSB. The Corporation’s head office is located in Calgary, Alberta with operations based out of Nisku, Alberta and Estevan, Saskatchewan . The Corporation’s shares trade on the TSX Venture Exchange under the symbol “SDI”.
In 2021, Stampede operated in the provinces of Alberta , Saskatchewan and Manitoba .
2021 OPERATIONAL OVERVIEW
In 2021, Stampede recorded its highest ever annual adjusted EBITDA of $8,361 and net income of $2,852 . These record numbers were driven by revenue of $32,163 , which was an increase of 123% over 2020.
The turnaround in commodity prices that began in Q4 2020, and continued through 2021, was driven by short–term production cuts by Saudi Arabia and OPEC+ combined with lower producer capital expenditures and a renewed optimism for rising energy demand due to the successful roll-out of worldwide COVID–19 vaccination programs.
While industry demand did recover slightly in 2021, Stampede’s utilization rate of 44% was 81% higher than the CAOEC industry average utilization rate of 25% for the same corresponding period. Stampede’s superior utilization rates were a direct result of continued successful expansion of its customer base.
The Corporation continued to maintain a strong focus on safety, culture and performance. In addition to the usual industry safety programs, Stampede proactively advanced new programs to tackle the safety challenges associated with the COVID–19 pandemic to ensure the health and safety of all its personnel. The focus of the Corporation is safe, efficient and reliable operations at each of its drilling sites and management is very pleased with the results achieved to date.
OUTLOOK
Stampede’s strong 2021 results continued into 2022, with all 10 of our marketable rigs being fully crewed and operational during the first quarter, Stampede is anticipating that minimal reactivation costs will offset expected inflationary increases in operational costs. With crude hitting 7-year highs, producers are seeing increased cash flows from their operations. Stampede’s 2022 outlook remains positive as our client’s financial positions continue to improve and the increasing forward curve for commodities provides further confidence for capital expenditure increases.
The Canadian market is tightening, and Stampede’s customers are looking to secure equipment and crews to ensure the success of their 2022 capital programs. Availability of labour continues to be a significant concern for all service providers, and we are strongly focused on retaining existing staff and attracting new talent.
As previously announced on January 4, 2022 , Stampede entered into an agreement with a well-established private Alberta based company (“AlbertaCo”) to combine Stampede’s extensive drilling operations experience with AlbertaCo’s technology of E-line coil tubing directional tools, tool deployment system, integrated drilling control systems, pumping systems, automated live wellbore modeling system, coil tubing injectors and reels.
Stampede believes the agreement will enhance the Corporation’s strategy in the provision of industry leading services for ESG extraction of hydrocarbons from bypassed reserves, low pressure reservoirs, and extend the reach of underbalanced short radius wells using through-tubing re-entry drilling applications in the future. Beta testing on the new underbalanced coil drilling rig and related technology is expected to be completed by the end of the second quarter in 2022.
The Corporation will continue to focus on maintaining financial resiliency, in order to best position the Corporation for organic and acquisition growth.
RESULTS FROM OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2021
|
Twelve months ended |
|||
|
(000’s CAD $ except operating days) |
2021 |
2020 |
% Change |
|
Revenue |
32,163 |
14,394 |
123% |
|
Direct operating expenses |
20,135 |
9,529 |
111% |
|
Gross margin (1) |
12,028 |
4,865 |
147% |
|
Gross margin % (1) |
37% |
34% |
9% |
|
Net income (loss) |
2,852 |
(4,042) |
171% |
|
General and administrative expenses |
4,503 |
3,101 |
45% |
|
Adjusted EBITDA (1) |
8,361 |
2,377 |
252% |
|
Drilling rig operating days (2) |
1,620 |
681 |
138% |
|
Drilling rig revenue per day (3) |
19.8 |
21.1 |
(6%) |
|
Drilling rig utilization (4) |
44% |
19% |
132% |
|
CAOEC industry average utilization (5) |
25% |
16% |
56% |
|
nm – not meaningful |
|||
RESULTS FROM OPERATIONS FOR THE THREE MONTH PERIOD ENDED DECEMBER 31, 2021
|
Three months ended |
|||
|
(000’s CAD $ except per day amounts) |
2021 |
2020 |
% Change |
|
Drilling rig revenue |
9,180 |
2,515 |
265% |
|
Direct operating expenses |
6,011 |
1,496 |
302% |
|
Gross margin (1) |
3,169 |
1,019 |
211% |
|
Gross margin % (1) |
35% |
41% |
(15%) |
|
Net income (loss) |
372 |
(2,386) |
116% |
|
General and administrative expenses |
1,488 |
653 |
128% |
|
Adjusted EBITDA (1) |
1,949 |
479 |
(307%) |
|
Drilling rig operating days (2) |
434 |
114 |
281% |
|
Drilling rig revenue per day (3) |
21.2 |
22.0 |
(4%) |
|
Drilling rig utilization (4) |
47% |
12% |
292% |
|
CAOEC industry average utilization (5) |
29% |
16% |
81% |
|
nm – not meaningful |
|||
NON-GAAP AND OTHER FINANCIAL MEASURES
This MD&A contains references to (i) Adjusted EBITDA, (ii) Gross margin (iii) Gross margin percentage and Working capital (excluding debt). These financial measures are not measures that have any standardized meaning prescribed by IFRS and are therefore referred to as non-GAAP (Generally Accepted Accounting Principles) 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 (loss) 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, 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 (loss), 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 (loss) and comprehensive income (loss) determined in accordance with IFRS 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. |
The following table reconciles the Corporation’s net income (loss), being the most directly comparable financial measure disclosed in the Corporation’s Annual Financial Statements, to adjusted EBITDA:
|
Three months ended |
Twelve months ended |
|||||||
|
(000’s CAD $) |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2019 |
|
|
Net income (loss) |
372 |
(2,386) |
116% |
2,852 |
(4,042) |
171% |
(1,247) |
|
|
Depreciation |
1,122 |
1,922 |
(42%) |
4,486 |
4,838 |
(7%) |
4,274 |
|
|
Write-down of property and equipment |
– |
720 |
(100%) |
– |
720 |
(100%) |
– |
|
|
Finance costs |
161 |
143 |
13% |
670 |
687 |
(2%) |
684 |
|
|
Other income |
(93) |
(4) |
2,225% |
(101) |
(56) |
80% |
(123) |
|
|
Gain on asset disposals |
– |
– |
nm |
(301) |
– |
nm |
(27) |
|
|
Share-based payments |
187 |
19 |
884% |
515 |
214 |
141% |
428 |
|
|
Transaction costs |
210 |
41 |
nm |
210 |
76 |
176% |
156 |
|
|
Foreign exchange gain (loss) |
(10) |
24 |
(142%) |
30 |
24 |
nm |
(19) |
|
|
Gain on extinguishment of convertible debenture |
– |
– |
nm |
– |
(84) |
nm |
– |
|
|
Adjusted EBITDA |
1,949 |
479 |
(307%) |
8,361 |
2,377 |
252% |
4,126 |
|
|
nm – not meaningful |
||||||||
|
(ii) |
Gross margin – is defined as “gross profit from services revenue from operations before depreciation”. 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 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 following table reconciles the Corporation’s net income (loss) from operations, being the most directly comparable financial measure disclosed in the Corporation’s Annual Financial Statements, to gross margin:
|
Three months ended |
Twelve months ended |
|||||||
|
(000’s CAD $) |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2019 |
|
|
Income (loss) from operations |
2,128 |
(89) |
nm |
7,863 |
426 |
1,746% |
4,206 |
|
|
Depreciation of property and equipment |
1,041 |
1,108 |
(6%) |
4,165 |
4,439 |
(6%) |
3,991 |
|
|
Gross margin |
3,169 |
1,019 |
211% |
12,028 |
4,865 |
147% |
8,197 |
|
|
Gross margin % |
35% |
41% |
(15%) |
37% |
34% |
9% |
35% |
|
|
nm – not meaningful |
||||||||
|
(iv) |
Working capital (excluding debt) – is calculated based on total current assets less total current liabilities excluding current debt. The Corporation monitors working capital and its liquidity position on an ongoing basis and manages liquidity risk by regularly evaluating capital and operating budgets, forecasting cash flows and maintaining a sufficient credit facility to meet financing requirements. |
|
Three months ended |
Twelve months ended |
|||||||
|
(000’s CAD $) |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2019 |
|
|
Income (loss) from operations |
2,128 |
(89) |
nm |
7,863 |
426 |
1,746% |
4,206 |
|
|
Depreciation of property and equipment |
1,041 |
1,108 |
(6%) |
4,165 |
4,439 |
(6%) |
3,991 |
|
|
Gross margin |
3,169 |
1,019 |
211% |
12,028 |
4,865 |
147% |
8,197 |
|
|
Gross margin % |
35% |
41% |
(15%) |
37% |
34% |
9% |
35% |
|
|
nm – not meaningful |
||||||||
FORWARD-LOOKING INFORMATION
Certain statements contained in this New 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”, “believe”, “predict”, and “forecast” are intended to identify forward-looking information.
This News Release contains forward-looking information pertaining to, among other things: expectations associated with the Corporation’s outlook, including among other things, anticipated reactivation costs, improvements in the financial positions of the Corporation’s customers, expectations about industry activities, the forecasted increase in the capital expenditure of the Corporation’s customers, the anticipated benefits of the Corporation’s agreement with AlbertaCo and the expected timing for the completion of beta testing of equipment connected therewith; and the Corporation’s continued evaluation of ESG opportunities.
Forward-looking information is based on certain assumptions that Stampede has made in respect thereof as at the date of this News Release regarding, among other things: the Corporation’s anticipation that it will have the ability to adjust its capital structure by issuing new equity or debt, disposing of assets and making adjustments to its operating expenditures and capital expenditure program; that the Corporation’s principal sources of liquidity will be sufficient to fund its operations and other strategic opportunities; that the Corporation has adequate access to its demand loan facility to provide the necessary liquidity needed to manage fluctuations in the timing of receipt and/or disbursement of operating cash flows; that the Corporation’s financial risk management policies will ensure that all payables are paid within the pre-agreed credit terms; the belief that Adjusted EBITDA is a useful supplemental financial measure; the condition of the global economy, including trade, public health (including the impact of the COVID-19 pandemic) and other geopolitical risks; the stability of the economic and political environment in which the Corporation operates; the effect the stabilization of global crude prices will have on drilling and completion activities in Western Canada ; the creditworthiness of the Corporation’s customers; the ability of the Corporation to retain qualified staff; the ability of the Corporation to obtain financing on acceptable terms; 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 News 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: public health concerns (including the impact of the COVID-19 pandemic) and other geopolitical risks; the condition of the global economy and, specifically, the condition of the crude oil and natural gas industry and related commodity prices; other commodity prices; the ongoing significant volatility in world markets and the resulting impact on drilling and completions programs; the impact of increasing competition; fluctuations in operating results; currency, exchange and interest rates; labour and material shortages; cyber security risks; natural catastrophes; and certain other risks and uncertainties detailed in Stampede’s Annual Information Form and Management Discussion and Analysis, each dated March 24, 2022 , for the year ended December 31, 2021 and from time to time in Stampede’s public disclosure documents available at www.sedar.com .
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 News 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. The forward-looking information contained in this News Release is expressly qualified by this cautionary statement.
SOURCE Stampede Drilling Inc.
View original content: http://www.newswire.ca/en/releases/archive/March2022/24/c2388.html
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