SYS-CON MEDIA Authors: Kevin Benedict, Gilad Parann-Nissany, Michael Bushong, Eric Brown

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

CALGARY, ALBERTA -- (Marketwired) -- 03/05/14 -- 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


                                       Dec 31,   Sep 30,   Jun 30,   Mar 31,
Three months ended                        2013      2013      2013      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,   Sep 30,   Jun 30,   Mar 31,
                                          2012      2012      2012      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 -   (Restated -
                                                       Note 3)       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              
                                                                            
                                                            Foreign         
                                      Share                currency         
                             Share   option Accumulated translation         
                           capital  reserve     deficit     reserve    Total
                          --------------------------------------------------
                          --------------------------------------------------
Balance at Jan 1, 2012                                                      
 (Previously reported)     310,296   10,338     (4,325)     (8,596)  307,713
                          --------------------------------------------------
                          --------------------------------------------------
Effect of change in                                                         
 accounting policies             -        -           -         387      387
Balance at Jan 1, 2012                                                      
 (Restated)                310,296   10,338     (4,325)     (8,209)  308,100
Impact of fair value of                                                     
 non-controlling interest                                                   
 liability                       -        -     (7,887)              (7,887)
                          --------------------------------------------------
                           310,296   10,338    (12,212)     (8,209)  300,213
                          --------------------------------------------------
Net (loss) income for the                                                   
 year                            -        -       (158)           -    (158)
Other comprehensive loss                                                    
Currency translation                                                        
 differences                     -        -           -     (3,105)  (3,105)
                          --------------------------------------------------
Total comprehensive                                                         
 (loss) income                   -        -       (158)     (3,105)  (3,263)
                          --------------------------------------------------
Employee share option                                                       
 scheme:                                                                    
Value of employees                                                          
 services                      105    1,339           -           -    1,444
Proceeds from shares                                                        
 issued                     16,796     -105           -           -   16,691
                          --------------------------------------------------
Total transactions with                                                     
 owners                     16,901    1,234           -           -   18,135
                          --------------------------------------------------
Balance at Dec 31, 2012                                                     
 (Restated)                327,197   11,572    (12,370)    (11,314)  315,085
                          --------------------------------------------------
                          --------------------------------------------------
Balance at Jan 1, 2013                                                      
 (Restated)                327,197   11,572     (5,312)    (11,314)  322,143
Impact of fair value of                                                     
 non-controlling interest                                                   
 liability                       -        -     (7,058)              (7,058)
                          --------------------------------------------------
                           327,197   11,572    (12,370)    (11,314)  315,085
                          --------------------------------------------------
Net (loss) income for the                                                   
 year                            -        -       (327)           -    (327)
Other comprehensive                                                         
 income                                                                     
Currency translation                                                        
 differences                     -        -           -      26,457   26,457
                          --------------------------------------------------
Total comprehensive                                                         
 income                          -        -       (327)      26,457   26,130
                          --------------------------------------------------
Dividends                                                                   
Employee share option                                                       
 scheme:                                                                    
Value of employee                                                           
 services                      478    1,325           -           -    1,803
Proceeds from shares                                                        
 Issued, net of issue                                                       
 costs                         741    (478)           -           -      263
                          --------------------------------------------------
Total transactions with                                                     
 owners                      1,219      847           -           -    2,066
                          --------------------------------------------------
Balance at Dec 31, 2013    328,416   12,419    (12,697)      15,143  343,281
                          --------------------------------------------------
                                                                            

(in thousands of Canadian dollars)                  
                                                    
   Equity attributable to the owners of the parent  
                                                    
                                 Non-          Total
                          controlling  shareholders'
                             interest         equity
                         ---------------------------
                         ---------------------------
Balance at Jan 1, 2012                              
 (Previously reported)              -        307,713
                         ---------------------------
                         ---------------------------
Effect of change in                                 
 accounting policies            7,483          7,870
Balance at Jan 1, 2012                              
 (Restated)                     7,483        315,583
Impact of fair value of                             
 non-controlling interest                           
 liability                    (5,820)       (13,707)
                         ---------------------------
                                1,663        301,876
                         ---------------------------
Net (loss) income for the                           
 year                           1,432          1,274
Other comprehensive loss                            
Currency translation                                
 differences                    (173)        (3,278)
                         ---------------------------
Total comprehensive                                 
 (loss) income                  1,259        (2,004)
                         ---------------------------
Employee share option                               
 scheme:                                            
Value of employees                                  
 services                           -          1,444
Proceeds from shares                                
 issued                             -         16,691
                         ---------------------------
Total transactions with                             
 owners                             -         18,135
                         ---------------------------
Balance at Dec 31, 2012                             
 (Restated)                     2,922        318,007
                         ---------------------------
                         ---------------------------
Balance at Jan 1, 2013                              
 (Restated)                     8,742        330,885
Impact of fair value of                             
 non-controlling interest                           
 liability                    (5,820)       (12,878)
                         ---------------------------
                                2,922        318,007
                         ---------------------------
Net (loss) income for the                           
 year                             894            567
Other comprehensive                                 
 income                                             
Currency translation                                
 differences                      294         26,751
                         ---------------------------
Total comprehensive                                 
 income                         1,188         27,318
                         ---------------------------
Dividends                     (3,157)        (3,157)
Employee share option                               
 scheme:                                            
Value of employee                                   
 services                           -          1,803
Proceeds from shares                                
 Issued, net of issue                               
 costs                              -            263
                         ---------------------------
Total transactions with                             
 owners                       (3,157)        (1,091)
                         ---------------------------
Balance at Dec 31, 2013           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.

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