STAMPEDE DRILLING INC. ANNOUNCES 2025 FIRST QUARTER RESULTS
The following press release should be read in conjunction with the
All amounts or dollar figures are denominated in thousands of Canadian dollars except for number of drilling rigs, operating days, or unless otherwise noted. All share amounts are presented to the nearest thousand.
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.
FIRST QUARTER 2025 OPERATIONAL HIGHLIGHTS
-
Revenue of
$23,408 – a decrease of$4,091 (15%) from$27,499 in the corresponding 2024 period. The decrease was primarily due to the decreased number of operating days. - Gross Margin (1) of 34% – a decrease of 2% from 36% in the corresponding 2024 period. The decrease was primarily due to the reduction in operating days and revenue, along with an increase in repair and maintenance costs per day.
-
Net Income of
$1,454 – a decrease of$3,487 (71%) from$4,941 in the corresponding 2024 period. The decrease was primarily related to the decrease in operating margin, higher depreciation expense, and an increase in deferred income tax expense compared to the corresponding period of 2024. -
Adjusted EBITDA
(1)
of
$5,115 – a decrease of$2,550 (33%) from$7,665 in the corresponding 2024 period. The decrease was primarily due to customer drilling program deferrals and operator consolidation, which resulted in a reduction in operating days and operating margin. -
Free Cash Flow
(1)
of
$3,887 – a decrease of$1,264 (25%) from$5,151 in the corresponding 2024 period, primarily related to a decrease in funds from operating activities compared to the corresponding 2024 period. -
Repurchase of 1,130 common shares – In the first quarter of 2025, the Corporation repurchased and cancelled 1,130 common shares under its normal course issuer bid ("NCIB") at a weighted average price per common share of
$0.14 , for total consideration of$163 . The total amount of common shares repurchased and cancelled during the first quarter of 2025, represents 6.4% of the total share repurchases since the inception of the Corporation's NCIB program inAugust 2023 .
OUTLOOK
Ongoing geopolitical challenges affecting global energy supply and demand are expected to continue to impact the volatility of commodity prices, which we anticipate continuing into 2025. However, increased tidewater access for Canadian producers from the startup of the
The evolving political situations in
Stampede had 14 out of its 17 marketable rigs operational in the first quarter of 2025. Stampede anticipates building on this positive momentum into the back half of 2025. The Corporation ended 2024 with a debt to EBITDA ratio of 1.09x. Stampede continues to demonstrate prudent debt management, maintaining financial risk at manageable levels.
With the NCIB program renewed on
(1) – Refer to "Non-GAAP and Other Financial Measures" for further information. |
FINANCIAL SUMMARY
|
Three months ended, |
||
(000's CAD $ except per share amounts) |
2025 |
2024 |
% Change |
Revenue |
23,408 |
27,499 |
(15 %) |
Direct operating expenses |
15,539 |
17,586 |
(12 %) |
Gross margin(1) |
7,869 |
9,913 |
(21 %) |
Net income |
1,454 |
4,941 |
(71 %) |
Basic and diluted income per share |
0.01 |
0.02 |
(50 %) |
Adjusted EBITDA(1) |
5,115 |
7,665 |
(33 %) |
Funds from operating activities |
5,099 |
7,614 |
(33 %) |
Free cash flow(1) |
3,887 |
5,151 |
(25 %) |
Weighted average common shares outstanding (000's) |
204,066 |
211,276 |
(3 %) |
Weighted average diluted common shares outstanding (000's) |
204,066 |
212,029 |
(4 %) |
Capital expenditures |
4,792 |
6,180 |
(22 %) |
Number of marketed rigs |
17 |
19 |
(11 %) |
Drilling rig utilization(2) |
53 % |
55 % |
(2 %) |
CAOEC industry average utilization(3) |
54 % |
50 % |
4 % |
(1) Refer to "Non-GAAP and Other Financial Measures" for further information. |
DESCRIPTION OF STAMPEDE'S BUSINESS
Stampede is an energy services company that provides premier contract drilling services in
Recent Developments
As previously announced, on
The Agreement contains customary covenants, representations and warranties of and from each of the Purchaser and the Corporation, and various conditions precedent, including that each party obtain all necessary consents from its lenders and other secured parties, and that the Purchaser successfully completes a debt financing with its bank to enable it to pay the cash portion of the Purchase Price. Unless all such conditions are satisfied or waived by the party for whose benefit such conditions exist, the Transaction will not proceed. In connection with the Transaction, Stampede and the Purchaser have also agreed to indemnify one another in certain circumstances.
The Agreement may be terminated prior to the closing of the Transaction in certain circumstances, including by either the Corporation or the Purchaser if the Transaction is not consummated on or before
RESULTS FROM OPERATIONS FOR THE THREE MONTH PERIOD ENDED
|
Three months ended, |
||
(000's CAD $) |
2025 |
2024 |
% Change |
Revenue |
23,408 |
27,499 |
(15 %) |
Direct operating expenses |
15,539 |
17,586 |
(12 %) |
Gross margin(1) |
7,869 |
9,913 |
(21 %) |
Gross margin %(1) |
34 % |
36 % |
(2 %) |
Net Income |
1,454 |
4,941 |
(71 %) |
General and administrative expenses |
3,118 |
2,524 |
24 % |
Adjusted EBITDA(1) |
5,115 |
7,665 |
(33 %) |
Drilling rig operating days(2) |
805 |
956 |
(16 %) |
Drilling rig revenue per day(3) |
29.1 |
28.8 |
1 % |
Drilling rig utilization(4) |
53 % |
55 % |
(2 %) |
CAOEC industry average utilization(5) |
54 % |
50 % |
4 % |
(1) Refer to "Non-GAAP and Other Financial Measures" for further information. |
-
Revenue of
$23,408 – a decrease of$4,091 (15%) from$27,499 in the corresponding 2024 period. The decrease was primarily driven by a 16% decrease in operating days compared to the corresponding period of 2024. - Operating days of 805 – a decrease of 151 operating days (16%) from 956 operating days in the corresponding 2024 period. Operating days decreased due to customer consolidation and drilling program deferrals in the first quarter of 2025, resulting in lower drilling rig utilization compared to the corresponding period of 2024.
- Gross margin percentage of 34% – a decrease of 2% from 36% in the corresponding 2024 period. The gross margin decrease was primarily due to the reduction in operating days and revenue, along with an increase in repair and maintenance costs per day.
-
Net income of
$1,454 – a decrease of$3,487 (71%) from$4,941 in the corresponding 2024 period. The decrease was primarily related to decreased Adjusted EBITDA, along with increased depreciation costs and deferred income tax expense. -
General and administrative expenses of
$3,118 – an increase of$594 (24%) from$2,524 in the corresponding 2024 period. The increase was primarily related to the increase in worker compensation insurance and credit loss allowance in the first quarter of 2025. -
Adjusted EBITDA of
$5,115 – a decrease of$2,550 (33%) from$7,665 in the corresponding 2024 period. The decrease was primarily due to customer drilling program deferrals and operator consolidation resulting in a reduction in operating days and operating margin.
NON-GAAP AND OTHER FINANCIAL MEASURES
This press release contains references to (i) adjusted EBITDA, (ii) gross margin (iii) gross margin percentage, and (iv) free cash flow. These financial measures are not measures that have any standardized meaning prescribed by IFRS Accounting Standards and are therefore referred to as non-generally accepted accounting principles ("non-GAAP") 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 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, foreign exchange gain 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, 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 and comprehensive income determined in accordance with IFRS Accounting Standards 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. |
|
Three months ended, |
||
(000's CAD $) |
2025 |
2024 |
% Change |
Net income |
1,454 |
4,941 |
(71 %) |
Depreciation |
2,422 |
2,068 |
17 % |
Finance costs |
442 |
517 |
(15 %) |
Other income |
5 |
- |
nm |
Income tax expense |
577 |
- |
nm |
Gain on asset disposal |
(23) |
(19) |
21 % |
Share-based payments |
219 |
170 |
29 % |
Transaction costs |
19 |
1 |
1,800 % |
Foreign exchange gain |
- |
(13) |
nm |
Adjusted EBITDA |
5,115 |
7,665 |
(33 %) |
nm - not meaningful |
|
|
|
(ii) |
Gross margin - is defined as "Income from operations before depreciation of property and equipment". 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 Accounting Standards 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 Corporation's method of calculating gross margin percentage may differ from that of other organizations and, accordingly, its gross margin percentage may not be comparable to that of other companies. |
|
|
|
The following table reconciles the Corporation's income from operations, being the most directly comparable financial measure disclosed in the Corporation's interim financial statements, to gross margin and gross margin percentage: |
|
Three months ended, |
||
(000's CAD $) |
2025 |
2024 |
% Change |
Income from operations |
5,592 |
7,951 |
(30 %) |
Depreciation of property and equipment |
2,277 |
1,962 |
16 % |
Gross margin |
7,869 |
9,913 |
(21 %) |
Gross margin % |
34 % |
36 % |
(2 %) |
(iv) |
Free cash flow - is calculated based on funds from operating activities less maintenance and sustaining capital, and interest and principal debt repayments. The Corporation uses this measure to assess the discretionary cash that management has to invest in growth capital, asset acquisitions, or return capital to shareholders. The Corporation's method of calculating free cash flow may differ from that of other organizations and, accordingly, its free cash flow may not be comparable to that of other companies. The following table reconciles the Corporation's funds from operating activities to free cash flow. |
|
Three months ended, |
||
(000's CAD $) |
2025 |
2024 |
% Change |
Funds from operating activities |
5,099 |
7,614 |
(33 %) |
Maintenance and sustaining capital |
(371) |
(1,012) |
(63 %) |
Interest paid on Demand Facility |
(101) |
(63) |
60 % |
Term Loan Facility principal payments |
(441) |
(987) |
(55 %) |
Interest on Term Loan Facility |
(299) |
(401) |
(25 %) |
Total free cash flow |
3,887 |
5,151 |
(25 %) |
FORWARD-LOOKING INFORMATION
Certain statements contained in this press 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", "should", "believe", "predict", and "forecast" are intended to identify forward-looking information.
This press release contains forward-looking information pertaining to, among other things: the Corporation's performance; expectations associated with the Corporation's outlook, including among other things, anticipated commodity prices and the volatility thereof and potential mitigating factors; expectations about industry activities and the impacts thereof on the Corporation; market conditions and corresponding rig utilization; the Transaction, including the terms thereof; the expected closing date of the Transaction and the anticipated benefits thereof to the Corporation; the expected sources of funding for the Transaction; future projects and the anticipated benefits thereof to the Corporation; and factors impacting global energy supply.
Forward-looking information is based on certain assumptions that Stampede has made in respect thereof as at the date of this press release regarding, among other things: the Corporation's ability to fully crew and contract its rigs; the success of the measures implemented by the Corporation to ensure the safe, efficient and reliable operations at each of its drilling sites; the effectiveness of the Corporation's financial risk management policies at ensuring all payables are paid within the pre-agreed credit terms; that the Corporation has adequate access to its credit facilities to provide the necessary liquidity needed to manage fluctuations in the timing of receipt and/or disbursement of operating cash flows; expectations regarding Stampede's share price; the impact of inflation, weather conditions, and expectations regarding the duration and overall impact of the continued conflicts in
Forward-looking information is presented in this press 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: the condition of the global economy, including trade, inflation, the ongoing conflict in
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 press 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. All forward-looking information contained in this press release is expressly qualified by this cautionary statement.
SOURCE