CALGARY - AKITA Drilling Ltd. (the 'Company') announces results for the nine months ended September 30, 2020.
The Company recorded a net loss of $8,203,000 and adjusted EBITDA of $1,635,000 in the third quarter of 2020 compared to $5,397,000 and $4,690,000 in the same period of 2019. Reduced activity in the quarter was the key driver for the lower results.
In March 2020, the World Health Organization declared a global pandemic related to COVID-19. To date, the COVID-19 related economic slowdown has resulted in significant declines and volatility in the stock markets as well as steep reductions in both global oil demand and prices. There remains significant uncertainty surrounding the future impact of COVID-19 on demand and prices for the Company's drilling services.
The impact of COVID-19 on demand for drilling services in North America is clearly reflected in the reduced drilling activity level over the third quarter of 2020. In Canada, the active rig count decreased 57% to 86 active rigs in September of 2020 from 196 rigs in September of 2019. In the United States, the decline was even greater at a 70% decrease as the active rig count fell to 261 rigs at the end of September 2020, from 860 rigs at the same point in 2019. AKITA's operating days decreased 55% to 531 for the third quarter of 2020 from 1,181 in the third quarter of 2019. This decrease in activity had a corresponding impact on the Company's revenue, which decreased to $18,849,000 in the third quarter of 2020 from $42,610,000 in the same period of 2019.
On September 22, 2020, the Company and its syndicate of lenders extended the Company's covenant relief period by one quarter to September 30, 2021. It is the Company's intent to extend its relief period on a quarterly basis as needed. The covenants for the extension are a debt to tangible net worth ratio not to exceed 0.75 and an interest to EBITDA ratio that is greater than 0.75 as well as a minimum trailing twelve-month EBITDA threshold.
Karl Ruud, AKITA's President and Chief Executive Officer stated: 'AKITA's strong relationships with its banks and its top tier customer base will allow us to retain our standard of excellence throughout this most challenging cycle.'
FORWARD-LOOKING INFORMATION
Certain statements contained in this news release may constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as 'anticipate', 'plan', 'estimate', 'expect', 'may', 'will', 'intend', 'should', and similar expressions.
Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.
The Company's actual results could differ materially from those anticipated in this forward-looking information as a result of regulatory decisions, competitive factors in the industries in which the Company operates, prevailing economic conditions (including as may be affected by the COVID-19 pandemic), and other factors, many of which are beyond the control of the Company.
The Company believes that the expectations reflected in the forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.
Any forward-looking information contained in this news release represents the Company's expectations as of the date hereof, and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.
Contact:
Darcy Reynolds
Tel: (403) 292-7530
AKITA DRILLING LTD. 
