Bronco Drilling Reduces Net Debt Position in 4Q10

Bronco Drilling announced financial and operational results for the three months and twelve months ended December 31, 2010.

Financial Results

Revenues for the fourth quarter of 2010 were $37.3 million compared to $34.8 million for the third quarter of 2010 and $15.9 million for the fourth quarter of 2009. Net loss for the fourth quarter of 2010 was $2.5 million compared to a net loss of $18.8 million for the previous quarter and a net loss of $6.1 million for the fourth quarter of 2009. The Company's fully diluted earnings per share for the quarter ended December 31, 2010, were a loss of $0.09 based on 27.2 million shares.

Results for the fourth quarter of 2010 were adversely affected by several non-recurring charges. These charges were related to the divestment of certain mechanical drilling rigs and ancillary drilling equipment, a loss related to Bronco MX, final expenses related to discontinued operations and an increase in the value of warrants issued. These items resulted in an after-tax loss of approximately $4.0 million in the fourth quarter or a loss of $0.15 per share. Without these non-recurring charges, fully diluted earnings per share from continuing operations would have been $0.06 for the quarter.

Revenues for the year ended December 31, 2010 were $124.4 million compared to $102.9 million for the year ended 2009. Net loss for 2010 was $50.7 million compared to a net loss of $57.6 million for 2009. The Company generated Adjusted EBITDA of $19.0 million in 2010 compared to Adjusted EBITDA of $10.9 million for the previous year. The Company's earnings per share for the year ended December 31, 2010, were a loss of $1.87 compared to a loss of $2.16 for 2009.

Operating Results

Revenue days for the quarter increased to 2,152 from 2,060 for the previous quarter and 1,049 for the fourth quarter of 2009. Utilization for the fourth quarter of 2010 was 96% on 24 operating rigs compared to 65% on 34 operating rigs for the previous quarter and 31% on 37 operating rigs for the fourth quarter of 2009. Average daily cash margin for our land drilling fleet for the quarter ended December 31, 2010 was $6,008 compared to $4,960 for the previous quarter and $3,072 for the fourth quarter of 2009.

Revenue days for 2010 increased to 7,450 from 5,699 for the previous year. Utilization for 2010 was 62% on 33 average operating rigs compared to 36% on 44 average operating rigs for 2009. Average daily cash margins for our land drilling fleet for the year ended December 31, 2010 was $4,578 compared to $5,646 for 2009.

"I am very proud of the company's accomplishments in 2010. We were able to reduce our net debt position from $42.4 million to $0 by year end all while increasing key metrics of revenue days and Adjusted EBITDA by 31% and 74%, respectively, over 2009. We believe the strong operating performance coupled with our healthy balance sheet provides us with a great deal of flexibility as we implement new growth strategies. We have made it a priority as we move forward with our growth plans to maximize the risk reward tradeoff in these projects. We believe this will create significant value for shareholders while maintaining a prudent financial risk profile," said Frank Harrison, Chairman and CEO of Bronco Drilling Company, Inc.

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