Market Overview

Independence Contract Drilling, Inc. Reports Financial Results For The Second Quarter Ended June 30, 2018

Share:

Independence Contract Drilling, Inc. Reports Financial Results For The Second Quarter Ended June 30, 2018

PR Newswire

HOUSTON, Aug. 2, 2018 /PRNewswire/ -- Independence Contract Drilling, Inc. (the "Company") (NYSE:ICD) today reported financial results for the three months ended June 30, 2018. 

Second Quarter 2018 Highlights

  • Record quarterly revenues of $25.8 million.
  • Net loss of $3.3 million, or $0.09 per share.
  • Adjusted net loss, as defined below, of $3.2 million, or $0.08 per share.
  • Adjusted EBITDA, as defined below, of $5.0 million.
  • Fleet utilization of 99.3%.
  • Record revenue days of 1,265.
  • Fully-burdened margin per day of $6,377 per day.
  • Net debt, excluding capitalized leases, of $56.2 million, on a borrowing base of $104.9 million.

In the second quarter of 2018, the Company reported record quarterly revenues of $25.8 million, a net loss of $3.3 million, or $0.09 per share, an adjusted net loss (defined below) of $3.2 million, or $0.08 per share, and adjusted EBITDA (defined below) of $5.0 million.  This compares to revenues of $25.6 million, a net loss of $4.1 million, or $0.11 per share, an adjusted net loss of $4.3 million, or $0.11 per share, and adjusted EBITDA of $3.9 million in the first quarter of 2018, and revenues of $21.3 million, a net loss of $6.3 million, or $0.17 per share, an adjusted net loss of $5.0 million, or $0.13 per share, and adjusted EBITDA of $3.2 million in the second quarter of 2017.

Chief Executive Officer Byron Dunn commented, "Demand for pad-optimal rigs is robust and improved throughout the second quarter, driving sequential improvements in ICD revenue per day and average dayrate in backlog, which now exceeds $21,000 per day.  We also realized a full quarter of benefits associated with efficiency efforts that drove improvements in cash costs at the rig level, which combined with our top-line growth, contributed to sequential improvements in margin per day of over 20% during the second quarter.  With rigs continuing to roll to higher dayrates, and the completion of our 15th ShaleDriller® rig, which commenced operations in the Permian on budget and ahead of schedule in July, we expect to again see sequential margin improvement in the upcoming quarter. We remain on schedule with respect to our recently announced transaction with Sidewinder Drilling, and still expect a closing to occur early in the fourth quarter of 2018."

Quarterly Operational Results

In the second quarter of 2018, the Company's fleet operated at 99.3% utilization and recorded 1,265 revenue days, compared to 100.0% utilization and recorded 1,259 revenue days in the first quarter of 2018, and 93.9% utilization and 1,111 revenue days in the second quarter of 2017.  

Operating revenues in the second quarter of 2018 totaled $25.8 million, compared to $25.6 million in the first quarter of 2018 and $21.3 million in the second quarter of 2017.  On a revenue-per-day basis, revenues were $19,411 per day in the second quarter of 2018, compared to $19,055 in the first quarter of 2018 and $18,201 in the second quarter of 2017.  Sequential revenue-per-day improvements were driven by increased pricing on contract renewals.

Operating costs in the second quarter of 2018 totaled $18.0 million, compared to $18.9 million in the first quarter of 2018 and $15.8 million in the second quarter of 2017.  Fully-burdened operating costs, excluding reactivation and rig construction costs, were $13,034 per day in the second quarter of 2018, compared to $13,414 in the first quarter of 2018 and $12,926 the second quarter of 2017.  The sequential decrease in cost per day related primarily to recently implemented labor efficiency initiatives.

Second quarter 2018 fully-burdened rig operating margins, excluding reactivation and rig construction costs, were $6,377 per day, compared to $5,641 per day in the first quarter of 2018 and $5,275 per day in the second quarter of 2017. 

Selling, general and administrative expenses in the second quarter of 2018 included $0.4 million of costs directly associated with the recently announced merger agreement with Sidewinder Drilling LLC.  Excluding these costs, selling, general and administrative expenses in the second quarter of 2018 were $3.5 million (including $0.7 million of non-cash stock-based compensation), compared to $3.5 million (including $0.6 million of non-cash stock-based compensation) in the first quarter of 2018 and $3.4 million (including $1.2 million of non-cash stock-based compensation) in the second quarter of 2017.      

Drilling Operations Update

All 15 of the Company's ShaleDriller® rigs are contracted under term contracts. Fourteen ShaleDriller rigs were operating as of June 30, 2018.  Our 15th newly-completed ShaleDriller rig commenced operations in July 2018.

The Company's June 30, 2018 backlog of revenues from contracts, with original terms of six months or more was $103.7 million. Approximately 53% of this backlog is expected to be realized during the remainder of 2018.

Capital Expenditures and Liquidity Update

Aggregate cash outlays for capital expenditures in the second quarter of 2018, net of disposals, were $6.6 million, including $4.6 million of payments for first quarter 2018 deliveries.  The Company's aggregate capital expenditure budget for 2018 is $23.5 million, including $10 million associated with the completion of the Company's 15th ShaleDriller rig, which commenced operations in July 2018. 

As of June 30, 2018, the Company had drawn $58.8 million on its $85.0 million credit facility and had net debt, excluding capital leases, of $56.2 million.  The borrowing base under the Company's credit facility was $104.9 million as of June 30, 2018. 

Conference Call Details

A conference call for investors will be held today, August 2, 2018, at 11:00 a.m. Central Time (12:00 p.m. Eastern Time) to discuss the Company's second quarter 2018 results. 

The call can be accessed live over the telephone by dialing (855) 239-3115 or for international callers, (412) 542-4125.  A replay will be available shortly after the call and can be accessed by dialing (877) 344-7529 or for international callers, (412) 317-0088.  The passcode for the replay is 10122592.  The replay will be available until August 9, 2018.

Interested parties may also listen to a simultaneous webcast of the conference call by logging onto the Company's website at www.icdrilling.com in the Investor Relations section.  A replay of the webcast will also be available for approximately 30 days following the call.

About Independence Contract Drilling, Inc.

Independence Contract Drilling provides land-based contract drilling services for oil and natural gas producers in the United States. The Company constructs, owns and operates a fleet of pad-optimal ShaleDriller rigs that are specifically engineered and designed to accelerate its clients' production profiles and cash flows from their most technically demanding and economically impactful oil and gas properties. For more information, visit www.icdrilling.com.

Forward-Looking Statements

This news release contains certain forward-looking statements within the meaning of the federal securities laws. Words such as "anticipated," "estimated," "expected," "planned," "scheduled," "targeted," "believes," "intends," "objectives," "projects," "strategies" and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to Independence Contract Drilling's operations are based on a number of expectations or assumptions which have been used to develop such information and statements but which may prove to be incorrect. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, and there can be no assurance that actual outcomes and results will not differ materially from those expected by management of Independence Contract Drilling. For more information concerning factors that could cause actual results to differ materially from those conveyed in the forward-looking statements, please refer to the "Risk Factors" section of the Company's Annual Report on Form 10-K, filed with the SEC and the information included in subsequent amendments and other filings. These forward-looking statements are based on and include our expectations as of the date hereof. Independence Contract Drilling does not undertake any obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which Independence Contract Drilling becomes aware of, after the date hereof.


INDEPENDENCE CONTRACT DRILLING, INC.

Unaudited

(in thousands, except par value and share data)


BALANCE SHEETS









June 30, 2018


December 31, 2017

Assets







Cash and cash equivalents

$              2,554


$                        2,533

Accounts receivable, net

19,702


18,056

Inventories


2,875


2,710

Assets held for sale

1,920


1,920

Prepaid expenses and other current assets

3,986


2,957



Total current assets

31,037


28,176

Property, plant and equipment, net

279,082


275,105

Other long-term assets, net

1,316


1,364



Total assets

$          311,435


$                    304,645

Liabilities and Stockholders' Equity




Liabilities







Current portion of long-term debt (1)

$                 541


$                           533


Accounts payable

14,661


11,627


Accrued liabilities

View Comments and Join the Discussion!