Saxon Delivers Strong Net Earnings and Deploys its First ATS Drilling Rig
Exploration and development activity remained strong during the second quarter throughout all of the markets that Saxon Energy Services Inc. ("Saxon" or "the Corporation") operates in, with the exception of Canada. Activity in the Western Canadian Sedimentary Basin slowed considerably in the second quarter of 2007 due to protracted spring breakup conditions, and a sharp decline in drilling activity to their lowest levels in several years. However, Saxon and its stakeholders continue to realize the benefits of the Corporation's strategy of deploying technologically advanced equipment into multiple geographic markets combined with a balanced portfolio of oil and natural gas drilling.
This strategy enabled Saxon to overcome the weakness in the Canadian marketplace as the Corporation recorded its twelfth quarter of sequential revenue growth. The Corporation generated $56.6 million in revenue and $8.3 million (15% of revenue) in operating earnings during the second quarter of 2007, an increase of 52% and 14% respectively compared to the same period in 2006. On a year-to-date basis, the Corporation generated $111.6 million in revenue and $22.1 million (20% of revenue) in operating earnings, an increase of 64% and 70% respectively compared to the same period in 2006. Net earnings increased to $4.6 million ($0.05 per diluted share) in the second quarter of 2007 compared to net earnings of $2.1 million ($0.03 per diluted share) during the same period in 2006. On a year-to-date basis, the Corporation generated net earnings of $12.6 million ($0.15 per diluted share) in 2007 compared to net earnings of $5.0 million ($0.06 per diluted share) during the same period in 2006, an increase of 153%.
Furthermore, Saxon is pleased to report that the first of five ATS(TM) drilling rigs spudded its first well in July 2007. In addition, the first of three drilling rigs mobilized in mid-July 2007 to a joint venture project in Mexico announced previously on July 4, 2007. This drilling rig is expected to commence drilling activity in August 2007. The remaining two rigs are currently under construction but are expected to mobilize during the latter part of the third quarter. These developments will further increase revenue and profitability, building upon the momentum established by the Corporation throughout the first six months of 2007.
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