The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Xtreme Drilling and Coil Services Reports Record Quarterly and Full Year 2013 Financial and Operating Results

Wednesday, March 05, 2014

Xtreme Drilling and Coil Services Reports Record Quarterly and Full Year 2013 Financial and Operating Results

04:17 EST Wednesday, March 05, 2014

CALGARY, ALBERTA--(Marketwired - March 5, 2014) - Xtreme Drilling and Coil Services Corp. (TSX:XDC) (" Xtreme", the "Company ") announce fourth quarter and full year 2013 financial and operating results. It is anticipated that filing will take place on SEDAR of audited Consolidated Financial Statements and Notes to the audited Consolidated Financial Statements and Management's Discussion and Analysis for the twelve months ended December 31, 2013, by Monday, March 10, 2014.

Highlights

  • Record adjusted EBITDA of $19.7 million in the fourth quarter of 2013, an increase of 11% over the previous quarter and 31% over the fourth quarter of 2012. The record quarter was driven by better operating margins in both the Drilling and Coil Services segments. For the year ended December 31, 2013, adjusted EBITDA increased 110% to $73.7 million as compared to $35.1 million for the prior year.

  • Record revenue of $62.7 million in the fourth quarter of 2013, an increase of 5% over the previous quarter and 21% over the fourth quarter of 2012. For the year ended December 31, 2013, the Company recognized revenue of $229.8 million, an increase of 28%, or $50.4 million from 2012. In addition, total operating days for 2013 increased to 8,063 as compared to 6,550 in 2012. The increase in revenue for the year was a function of 23%, or 1,513, more operating days in 2013 and an increase in average revenue per day to $29,277 from $27,387 in 2012.

  • For the fourth quarter, the Drilling Segment achieved utilization of 93% on 1,801 operating days. This was comprised of a 96% utilization rate for the 18 rig US XDR fleet and 75% for the three rig Canadian XDR fleet. For the year ended 2013, the Drilling Segment achieved utilization of 89% on 6,829 days. This was comprised of a 93% utilization rate for the 18 rig US XDR fleet and 66% for the three rig Canadian XDR fleet.

  • For the fourth quarter, the Coil Services Segment achieved utilization of 76% on 340 operating days. This was comprised of a 98% utilization rate for the two XSR units in Saudi Arabia and an 81% utilization rate for the three actively marketed XSR units in the US. Included in the Coil Services utilization is one additional unit that is currently idle in the US, but is actively being marketed both in the US and internationally. The US XSR units for the quarter averaged 18 operating days per month on each unit. For the year ended 2013, the Coil Services Segment achieved utilization of 65% on 1,234 operating days. This was comprised of a 98% utilization rate in for the two XSR units in Saudi Arabia and a 64% utilization rate for the three actively marketed XSR units in the US. As a reminder, the Company now uses 22 days as total available operating days for the US XSR units when calculating utilization.

  • The Drilling Segment (which includes US and Canada) increased operating profit to $64.4 million in 2013 as compared to $45.5 million in the previous year. This was driven by the US division which generated higher operating profits on higher utilization and increased operating efficiency, which resulted in an operating margin of 37.2% as compared to 32.1% in 2012.

  • The Coil Services segment (which includes US and Saudi Arabia) increased operating profit to $20.6 million in 2013 as compared to $6.0 million in the previous year. This was driven by the US division which had higher demand and pricing coupled with strong cost control and the Saudi Arabia division which increased profitability on higher pricing in 2013; primarily a result of the new contract signed in the third quarter of 2013. Overall operating margin as a percent of revenue increased to 36.3% in 2013 from 15.8% in 2012.

  • The Company completed a new $150 million credit facility in in the fourth quarter and finished 2013 with $117 million in net debt (total debt less cash) and a funded debt to EBITDA ratio of 1.7. This represents significant improvement from the peak funded debt to EBITDA ratio of 5.7 at June 30, 2012, and 3.6 at year end 2012.

  • Total capital expenditures were approximately $23 million, $22.5 million net of dispositions, during 2013. This is down significantly from total capital expenditures of $115 million in 2011 and $112 million in 2012. In 2014 capital expenditures are budgeted to be between $55 million and $60 million with approximately $25 million of this budgeted for existing fleet maintenance, spares and upgrades. The remaining capital will be spent on two new XSR deep coiled tubing units, the preparation and deployment of two XDR 300 drilling rigs to India, and the purchase of the 20% interest from the partner in the Company's Saudi Arabian joint venture. At year end, the Company had significant liquidity with approximately $28 million available on the credit facility and $42.1 million in working capital which includes $12.2 million of cash. Xtreme anticipates that 2014 capital expenditures will be funded through operating cash flow.

  • During the fourth quarter Xtreme recognized several one-time non-cash charges that impacted earnings. Absent these one-time charges and an additional $6.5 million in non-cash unrealized foreign exchange losses for 2013, pre-tax income would have been approximately $21.5 million as compared to the $4.9 million as reported for the year. In addition, earnings per share would have been approximately $0.16 as compared to $0.00 as reported. The fourth quarter non-recurring charges are detailed as follows:

    • As part of the normal review of fixed asset carrying values, it was determined that the Company would write off the value of certain spare, surplus and rig equipment. The total charge recognized during the quarter was $4.5 million which is equivalent to roughly 0.8% of total asset value. In addition, the Company re-evaluated the remaining useful lives of certain spare, surplus and rig equipment. This had the effect of increasing depreciation by approximately $2.9 million for the fourth quarter. Both of these are reflected in the depreciation expense of $20.8 million for the quarter. In 2014 the Company anticipates that depreciation expenses will average $11 to $12 million per quarter.

    • The Company also recognized a $1.5 million charge as part of the requirement under IFRS 13 to adjust to fair value the liability on the balance sheet relating to the 20% non-controlling interest in the Company's Saudi Arabian joint venture. This adjustment will not be necessary in 2014 as the Company closed the transaction to purchase the 20% interest in February.

    • Finally, Xtreme wrote-off $1.2 million of unamortized deferred loan costs related to the extinguishment of the previous debt facility. These expenses were being amortized over the life of the previous facility and are included in interest expense in the fourth quarter.

  • The Board is pleased to announce the appointment of J. William Franklin, Jr. as an independent director of Xtreme. Mr. Franklin is replacing Mr. Saad Bargach on the Board of Directors as representative for Lime Rock Partners. Mr. Franklin joined Lime Rock Partners in 2003 and was named a Managing Director in 2008. Currently based in Houston, Mr. Franklin has worked in the firm's Houston, Calgary, and Westport, Connecticut locations and has played a leadership role in the firm's investment efforts in the energy service and exploration and production sectors in North America and internationally.

Before joining Lime Rock Partners, he had experience in private equity, energy company operations, and energy finance at Riverstone Holdings from 2000 to 2003, Simmons & Company from 1996 to 1998, and Parker & Parsley Petroleum Company from 1995 to 1996. Mr. Franklin currently serves on the board of directors of Acoustic Zoom, GEODynamics, IDM Group, PDC Mountaineer, Shelf Drilling and UTEC International. He previously served on the board of directors of Hercules Offshore, Marauder Resources, PanGeo Subsea and Slate River Resources. He is a graduate of the University of Texas at Austin (B.A., B.B.A.) and Harvard Business School (M.B.A.).

Conference Call Details

Xtreme has scheduled a conference call to discuss results with investors, analysts, and stakeholders on Wednesday, March 5, 2014, beginning promptly at 10:00 am MT (11:00 am CT, 12:00 pm ET).

Tom Wood, Chief Executive Officer, will host the conference call with participation from Matt Porter, Chief Financial Officer.

Conference operator dial‐in numbers

To participate in the conference call, please dial in as follows approximately ten minutes before the start time in your time zone.

+1 866-226-1798 (North America Toll‐Free) or +1 416‐340-2220 (Alternate)

Webcast link: http://www.gowebcasting.com/5239

An audio replay of the call will be available until Tuesday, March 12, 2014. To access the replay, call +1 800‐408‐3053 or +1 905‐694‐9451 and enter pass code 4828220.

Selected Quarterly Financial Information

Three months ended Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013
Restated Restated Restated
Revenue 62,681 59,692 53,268 54,182
Adjusted EBITDA 19,734 17,783 16,847 19,234
Adjusted EBITDA as a percentage of revenue 31 30 32 35
Adjusted EBITDA per share - basic ($) 0.24 0.22 0.21 0.24
Net (loss) income (7,441) 3,281 240 4,487
Net (loss) income per share - basic ($) (0.09) 0.04 0.00 0.06
Capital assets 412,523 416,887 431,294 417,431
Total assets 515,720 504,728 520,326 508,823
Operating days 2,141 2,062 1,911 1,949
Utilization (percentage) - XDR 93 90 85 89
Utilization (percentage) - XSR 76 76 65 60
Utilization (percentage) - Total 90 87 81 83
Weighted average rigs in service 28.0 28.0 28.0 28.0
Total rigs, end of quarter 28 28 28 28
Dec 31, 2012 Sep 30, 2012 Jun 30, 2012 Mar 31, 2012
Restated Restated Restated Restated
Revenue 51,813 48,948 40,180 38,446
Adjusted EBITDA 15,029 4,459 7,695 7,909
Adjusted EBITDA as a percentage of Revenue 29 9 19 21
Adjusted EBITDA per share - basic ($) 0.19 0.07 0.12 0.12
Net (loss) income 3,827 (2,935) (2,059) 1,689
Net (loss) income per share - basic ($) 0.05 (0.04) (0.03) 0.03
Capital assets 415,354 425,364 425,397 379,710
Total assets 506,551 511,318 512,254 464,453
Operating days 1,891 1,742 1,494 1,423
Utilization (percentage) - XDR 85 86 74 84
Utilization (percentage) - XSR 58 45 69 63
Utilization (percentage) - Total 80 77 73 81
Weighted average rigs in service 26.8 26.0 23.4 19.8
Total rigs, end of quarter 28 28 27 18

Excerpt from Management's Discussion and Analysis for the twelve months ended December 31, 2013

OUTLOOK

As a company founded to break through traditional barriers in our industry, Xtreme Drilling and Coil Services has been setting records almost since inception. However, nothing in our history quite compares to 2013. It was an exceptional year on many fronts as we established new industry benchmarks with our field performance and surged past previous high-water marks for the company, both operationally and financially.

Our primary goal for 2013 was optimizing our operations and maximizing efficiency to capitalize on the aggressive fleet expansion we undertook in 2011 and 2012. We are proud to report we accomplished that mission. Last year was our busiest and most productive ever for both the Drilling (XDR) and Coil Service (XSR) segments of our company. Our operating days topped 8,000 for the first time ever, pushing our revenue to a record $229.8 million even as we maintained a similar rig count to 2012. Other key financial metrics hit historic levels as well, including operating profit margins and EBITDA.

Xtreme also made great strides in strengthening the balance sheet, using our growing free cash flows to substantially reduce leverage incurred during our $200+ million capital expansion program. We are pleased that the marketplace recognized this progress, as our share price increased by 118% in 2013.

Also of note, our business came full circle in an important sense in 2013. Xtreme's history is deeply rooted in driving innovation in coiled tubing drilling technology, and we have numerous patents to show for it. However, in recent years we shifted our focus almost entirely to traditional jointed pipe drilling in response to the rapid proliferation of horizontal wells in North American resource plays. Now we are excited to be putting that breakthrough coiled tubing technology to work again; this time for ultra-deep completions in those same long-lateral wells.

DRILLING SERVICES (XDR)

After growing our XDR drilling fleet dramatically in prior years, we maximized utilization levels on an unprecedented scale in 2013. At year-end, all 21 of these Tier 1 rigs were working, mostly on long-term contracts. Total operating days for the XDR division reached an all-time high of 6,834 days and utilization was 89% for 2013 as compared to 82% in the prior year.

Geographically, we continued to focus on two of North America's most prolific resource plays. Our largest presence is in the Niobrara Shale in Colorado and Wyoming, where 12 XDR rigs were working at year-end. There, our high-specification rigs continued to set the performance standard with superior mobility that accelerates drilling and reduces move times between well pads. We also further grew our presence in the Bakken Shale in North Dakota, where we had six rigs working at year-end. The other three XDR rigs were working in Canada.

"Our leading-edge technology and outstanding service quality truly set us apart in the XDR division's core operating areas of Colorado and North Dakota," Chief Executive Officer Tom Wood noted. "The market remains strong for Xtreme's drilling services in the Bakken and Niobrara, as our operational efficiency and best-in-class mobilization times continue to drive down costs for our customers."

The XDR division's high utilization levels are expected to continue into the future, as our large backlog of contracted days was in excess of 5,800 at the beginning of 2014.

COIL SERVICES (XSR)

Last year was full of accomplishment for our XSR coiled tubing division. After launching our extended-reach completion services in 2012, we have rapidly established ourselves as a market leader in the Eagle Ford Shale in South Texas. We are also the longest-reach provider in this basin, which ranks second in production volume among shale oil plays in the US. In fact, we set an Eagle Ford record in 2013 by reaching a total measured depth of 20,344 feet with coiled tubing-including a lateral length over 10,000 feet. These distinctions allowed us to increase both our service rates and utilization levels, as total operating days for the XSR division reached a new high of 1,234.

In addition to superior reach, Xtreme has established a reputation for outstanding performance with our proprietary large-diameter coil. XSR units are substantially accelerating completion plug millouts and reducing stuck-in-hole incidents. The XSR division had in excess of 16.8 million round trip run in feet with coiled tubing in 2013 without ever leaving pipe down hole. We are especially proud of that last accomplishment, as it highlights the unmatched reliability of our coiled tubing services. With that stellar track record, Xtreme is not only completing ultra-deep wells, but also gaining traction in the 14,000-16,000 foot market, as operators seek to mitigate risk.

Xtreme is achieving these successes by leveraging innovations we originally developed for coiled tubing drilling. For example, our XSR units utilize electric injectors and PLC-based controls for greater power and precision, and 2-5/8" coiled tubing for extended lateral reach. Recognizing the advantages, the market is increasingly favoring these technologies over traditional features such as hydraulic power and smaller-diameter coil. We believe this clearly differentiates Xtreme in the marketplace and offers our customers a value proposition no other company can match.

Additionally, two XSR units continue to perform re-entry drilling in Saudi Arabia, where we signed new three-year contracts with the operators we have worked there with since 2010. This project has been a tremendous technical and financial success for Xtreme.

After keeping the rig count unchanged and concentrating on our core markets last year, Xtreme's focus will return to growth in 2014-for both our fleet and geographical footprint.

Our XSR division will add new coiled tubing units as it seeks to meet demand in the Eagle Ford of South Texas, and looks at potential expansion into the Permian Basin in West Texas. We anticipate funding this initiative entirely with free cash, given the strength of our operating margins.

"As our reputation for excellence in coiled tubing services continued to build in 2013, customer demand in the Eagle Ford began to consistently outstrip our capacity," Chief Executive Officer Tom Wood commented. "Xtreme is moving quickly to meet that demand-and pursue expansion into other markets-by making new-build XSR units the focus of our 2014 capital investment program."

Also in 2014, the XDR division will look for opportunities to optimize the existing fleet and potentially move shallower depth capacity drilling rigs into new markets as the push toward deeper wells and larger equipment continues in the US. These efforts were already yielding results early in the year, when we signed a multi-year contract to relocate two XDR 300 rigs to India. We anticipate that these rigs will commence operations in the third quarter of 2014.

Finally, even with all that we accomplished last year, we see opportunities to further optimize our operations and drive profit margins. These efforts will continue in 2014, as we focus on pushing to greater depths and new heights while emphasizing capital discipline and ultimately working to maximizing value to our shareholders.

Xtreme Drilling and Coil Services Corp.

Consolidated Statements of Financial Position

At December 31, 2013, December 31, 2012 and January 1, 2012

(in thousands of Canadian dollars)
Dec 31, 2013 Dec 31, 2012 Jan 1, 2012
(Restated - Note 3) (Restated - Note 3)
Assets
Current assets
Cash and cash equivalents 12,220 5,921 6,873
Accounts receivable 60,084 44,878 46,653
Other receivables 1,306 2,975 1,636
Prepaid expenses and other 2,491 2,047 2,114
Assets held for sale - 9,308 -
Income tax recoverable 462 368 928
Inventory 8,181 6,474 6,470
84,744 71,971 64,674
Non-current assets
Deferred tax asset 14,536 15,006 7,576
Property and equipment 412,523 415,354 348,148
Intangible assets 3,917 4,220 4,523
Total Assets 515,720 506,551 424,921
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness - 7,834 -
Accounts payable and accrued liabilities 28,051 27,904 26,902
Fair value of non-controlling interest liability 12,763 - -
Current portion of long-term debt 669 14,201 500
41,483 49,939 27,402
Long-term liabilities
Fair value of non-controlling interest liability 1,596 12,878 13,707
Long-term debt 128,407 125,727 81,936
Total Liabilities 171,486 188,544 123,045
Shareholders' equity
Share capital 328,416 327,197 310,296
Share option reserve 12,419 11,572 10,338
Accumulated deficit (12,697) (12,370) (12,212)
Foreign currency translation reserve 15,143 (11,314) (8,209)
Total Shareholders' Equity 343,281 315,085 300,213
Non-controlling interest 953 2,922 1,663
Total Liabilities and Shareholders' Equity 515,720 506,551 424,921

Xtreme Drilling and Coil Services Corp.

Consolidated Statements of Income

For the years ended December 31, 2013 and 2012

(in thousands of Canadian dollars, except share and per share data)
2013 2012
(Restated - Note 3)
Revenue 229,823 179,387
Expenses
Operating expenses 144,873 127,835
General and administrative expenses 11,280 10,226
Depreciation of property and equipment 51,192 27,266
Amortization of intangibles 303 303
Stock-based compensation 1,321 1,245
Foreign exchange loss (gain) 6,494 (1,790)
(Gain) loss on sale of equipment (132) 257
Change in value of non-controlling interest liability 1,481 (829)
Impairment of accounts receivable 72 6,235
Impairment of assets held for sale - 3,133
Loss on damage of property and equipment - 538
Other expense 153 175
Interest expense 7,866 7,919
Income (loss) before tax for the year 4,920 (3,126)
Tax expense (recovery)
Current 3,870 2,775
Deferred 483 (7,175)
Total tax expense (recovery) 4,353 (4,400)
Net income for the year 567 1,274
Net (loss) income for the year attributable to:
Owners of the parent (327) (155)
Non-controlling interest 894 1,429
567 1,274
Net (loss) per common share attributable to equity owners of the parent
- basic (0.00) (0.00)
- diluted (0.00) (0.00)
Weighted average number of common shares
- basic 80,881,799 69,618,457
- diluted 81,351,825 69,759,835

Xtreme Drilling and Coil Services Corp.

Consolidated Statements of Comprehensive Income (Loss)

For the years ended December 31, 2013 and 2012

(in thousands of Canadian dollars)
2013 2012
(Restated - Note 3)
Net income for the year 567 1,274
Other comprehensive income (loss)
Items may be subsequently reclassified to profit or loss
Unrealized gain (loss) on translating
financial statements of foreign operations 26,751 (3,278)
Comprehensive income (loss) for the year 27,318 (2,004)

Xtreme Drilling and Coil Services Corp.

Consolidated Statements of Changes in Equity

For the years ended December 31, 2013 and 2012

(in thousands of Canadian dollars)
Equity attributable to the owners of the parent
Share capital Share option reserve Accumulated deficit Foreign currency translation reserve Total Non-controlling interest Total shareholders' equity
Balance at Jan 1, 2012 (Previously reported) 310,296 10,338 (4,325) (8,596) 307,713 - 307,713
Effect of change in accounting policies - - - 387 387 7,483 7,870
Balance at Jan 1, 2012 (Restated) 310,296 10,338 (4,325) (8,209) 308,100 7,483 315,583
Impact of fair value of non-controlling interest liability - - (7,887) (7,887) (5,820) (13,707)
310,296 10,338 (12,212) (8,209) 300,213 1,663 301,876
Net (loss) income for the year - - (158) - (158) 1,432 1,274
Other comprehensive loss
Currency translation differences - - - (3,105) (3,105) (173) (3,278)
Total comprehensive (loss) income - - (158) (3,105) (3,263) 1,259 (2,004)
Employee share option scheme:
Value of employees services 105 1,339 - - 1,444 - 1,444
Proceeds from shares issued 16,796 -105 - - 16,691 - 16,691
Total transactions with owners 16,901 1,234 - - 18,135 - 18,135
Balance at Dec 31, 2012 (Restated) 327,197 11,572 (12,370) (11,314) 315,085 2,922 318,007
Balance at Jan 1, 2013 (Restated) 327,197 11,572 (5,312) (11,314) 322,143 8,742 330,885
Impact of fair value of non-controlling interest liability - - (7,058) (7,058) (5,820) (12,878)
327,197 11,572 (12,370) (11,314) 315,085 2,922 318,007
Net (loss) income for the year - - (327) - (327) 894 567
Other comprehensive income
Currency translation differences - - - 26,457 26,457 294 26,751
Total comprehensive income - - (327) 26,457 26,130 1,188 27,318
Dividends (3,157) (3,157)
Employee share option scheme:
Value of employee services 478 1,325 - - 1,803 - 1,803
Proceeds from shares Issued, net of issue costs 741 (478) - - 263 - 263
Total transactions with owners 1,219 847 - - 2,066 (3,157) (1,091)
Balance at Dec 31, 2013 328,416 12,419 (12,697) 15,143 343,281 953 344,234

Xtreme Drilling and Coil Services Corp.

Consolidated Statements of Cash Flows

For the years ended December 31, 2013 and 2012

(in thousands of Canadian dollars)
2013 2012
(Restated - Note 3)
Cash flow provided by:
Operating activities
Net income for the year 567 1,274
Items not affecting cash:
Depreciation and amortization 51,495 27,569
Stock-based compensation 1,321 1,245
Unrealized foreign exchange loss (gain) 6,494 (1,659)
(Gain) loss on sale of equipment (132) 257
Change in fair value of non-controlling interest liability 1,481 (829)
Impairment on accounts receivable 72 6,235
Impairment on assets held for sale - 3,133
Loss on damage of property and equipment - 538
Interest expense 7,866 6,963
Interest paid (7,656) (6,491)
Amortization of debt issuance costs 1,380 966
Current tax expense 3,870 2,775
Deferred tax expense (recovery) 483 (7,175)
Taxes paid (217) -
Changes in items of working capital (5,122) (4,519)
Net cash generated from operating activities 61,902 30,282
Financing activities
Proceeds from shares issued, net of issue costs - 16,192
Proceeds from exercise of stock options 741 255
Proceeds from long-term debt 12,512 66,260
Proceeds from long-term debt 129,632 -
Repayment of long-term debt (158,609) (5,605)
Repayment of (proceeds from) operating facility (7,834) 7,834
Dividends paid to joint venture partner (1,276) -
Debt issuance cost (1,247) (1,459)
Net cash (used in) generated from financing activities (26,081) 83,477
Investing activities
Proceeds from sale of equipment 569 681
Capital expenditures (23,059) (112,357)
Net cash used in investing activities (22,490) (111,676)
Effect of exchange rate changes on cash and cash equivalents (7,032) (3,035)
Increase (decrease) in cash and cash equivalents 6,299 (952)
Cash and cash equivalents - beginning of year 5,921 6,873
Cash and cash equivalents - end of year 12,220 5,921

Xtreme Drilling and Coil Services Corp.

EBITDA and Adjusted EBITDA

For the years ended December 31, 2013 and 2012

(in thousands of Canadian dollars)
2013 2012
Net income 567 1,274
Tax expense 4,353 (4,400)
Interest expense 7,866 7,919
Amortization of intangibles 303 303
Depreciation of property and equipment 51,192 27,266
EBITDA 64,281 32,362
2013 2012
EBITDA 64,281 32,362
Adjustments for non-cash and one-time gains and losses 9,317 (404)
Adjusted EBITDA 73,598 31,958
Adjusted EBITDA per share ($) 0.91 0.46
Net (loss) income per share ($) (0.09) 0.02
Adjusted EBITDA attributable to:
Owners of the parent 72,704 30,107
Non-controlling interest 894 1,851
73,598 31,958
2013 2012
Stock-based compensation 1,321 1,245
(Gain) loss on sale of equipment (132) 257
Foreign exchange (gain) loss 6,494 (1,790)
Change in fair value of non-controlling interest liability 1,481 (829)
Loss on damage of property and equipment - 538
Other expense 153 175
9,317 (404)

Reader Advisory

This news release contains forward-looking statements ("FLS"). The use of the words "may", "believe", "could", "would", "might", "will be taken", "occur" or "be achieved" and similar expressions identify FLS. More particularly, this news release contains statements that may relate to contracting, marketing, financing, construction, modifications, deployment, operation, utilization of drilling rigs in the Company's current and future fleet. Further, the FLS herein may relate to trade credit insurance carried by the Company to mitigate receivables collection risk. Although Xtreme believes expectations reflected in these FLS are reasonable, readers should not place undue reliance on them because Xtreme can give no assurance they will prove to be correct. There are many factors that could cause FLS not to be correct, including risks and uncertainties inherent in the Company's business.

These statements are based on certain factors and assumptions including, but not limited to: the assessment of current and projected future operations; ongoing and future strategic business alliances, negotiations and opportunities to enter new, extend or complete existing contracts; the availability and cost of financing; foreign currency exchange rates; timing and magnitude of capital expenditures; expenses and other variables affecting rig operation, modification and construction; the ability and commitment of vendors to provide rig component equipment, services and supplies, including labor, in a cost-effective and timely manner; the issuance of applied-for patents; changes in tax rates; and government regulations. Although Xtreme considers the assumptions used to prepare this news release reasonable, based on information available to management as of March 4, 2014, ultimately the assumptions may prove to be incorrect.

Forward-looking statements are also subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from management's current expectations. These factors include, but are not limited to: the cyclical nature of drilling market demand, foreign currency exchange rates, and commodity prices; access to credit and to equity markets; the availability of qualified personnel; vendor-provided rig components; and, competition for customers.

Management's assumptions considered the following: compliance with the terms of the Company's current and proposed new credit facility; ongoing access to key supplies and components required to continue operating and maintaining equipment, including fuel; continued successful performance of drilling and related equipment; expectations regarding gross margin; recruitment and retention of qualified personnel; continuation or extension of existing long-term or multi-well contracts; revenue expectations related to shorter-term drilling opportunities; willingness and ability of customers to remit amounts owing to Xtreme in accordance with normal industry practices; and management of accounts receivable in direct relation to revenue generation.

In preparing this news release, management considered the following risk factors: fluctuations in crude oil and natural gas prices, supply and demand; fluctuation in foreign currency exchange and interest rates; financial stability of Xtreme's customers; current and future applications for Xtreme's proprietary technology; competition from other drilling contractors; regulatory and economic conditions in regions where Xtreme operates; environmental constraints; changes to government legislation; international trade barriers or restrictions; and, where appropriate, global political and military events.

Financial outlook information contained in this news release about prospective results of operations, financial position or cash provided by operating activities is based on assumptions about future events, including economic conditions and proposed courses of action, and on management's assessment of relevant information currently available. Readers are cautioned such financial outlook information contained in this news release is not appropriate for purposes other than for which it is disclosed here. Readers should not place undue importance on FLS and should not rely on this information as of any other date. Except as required pursuant to applicable securities laws, Xtreme disclaims any intention, and assumes no obligation, to update publicly or revise FLS to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such FLS or otherwise, or to explain any material difference between subsequent actual events and such FLS.

About Xtreme

Xtreme Drilling and Coil Services Corp. ("XDC" on the Toronto Stock Exchange) designs, builds, and operates a fleet of high specification drilling rigs and coiled tubing well service units featuring leading-edge proprietary technology including AC high capacity coil injectors, deep re-entry drilling capability, modular transportation systems and continuous integration of in-house advances in methodologies.

Currently Xtreme operates two service lines: Drilling Services (XDR) and Coil Services (XSR) under contracts with oil and natural gas exploration and production companies and integrated oilfield service providers in Canada, the United States and Saudi Arabia. For more information about the Company, please visit www.xtremecoil.com.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Xtreme Drilling and Coil Services Corp.
Matt Porter
Chief Financial Officer
+1 281 994 4600
ir@xtremecoil.com
www.xtremecoil.com

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections