Union Drilling Reports on Second Quarter Financial Results
Union Drilling has announced financial and operating results for the three and six months ended June 30, 2009.
Revenues for the second quarter of 2009 were $38.9 million compared to $75.4 million in the second quarter of 2008. Union Drilling reported a net loss of $4.9 million for the quarter, or $0.24 per share, compared to net income of $3.4 million, or $0.15 per diluted share, during the second quarter of 2008. Second quarter 2009 results include a $1.6 million, or $0.06 per diluted share, non-cash charge for the impairment of assets.
EBITDA for the second quarter of 2009 totaled $7.3 million compared to $17.4 million reported in the same period last year. The Company's calculation of EBITDA excludes the non-cash impairment charge.
During the quarter, Union Drilling completed a 3 million share (at a price of $8.25 per share) stock offering that generated proceeds of approximately $23.2 million net of fees.
Christopher D. Strong, Union Drilling's President and Chief Executive Officer, commented, "As expected, the second quarter was quite challenging for Union Drilling and the entire industry. Our smaller rigs in Appalachia did not experience their typical seasonal uptick, and activity in Texas and the Arkoma basin remained subdued. In this environment, we have successfully reduced operating expenses at nearly the same rate as revenues have fallen. We also significantly reduced our total debt-to-total capital ratio to about 10 percent as of June 30th as a result of our equity offering and reduced capital expenditures during the quarter. While dialogue is picking up with current and potential customers about rig needs for programs in development, I do not expect the third quarter to show significant improvement compared to the second quarter."
Union Drilling's average marketed rig utilization for the second quarter was 34.7%, down from 69.5% in the same period last year. Revenue days totaled 2,243 compared to 4,490 for the second quarter of 2008. Average revenue per revenue day was $17,330 for the second quarter of 2009 compared to $16,790 last year. Operating expenses for the quarter totaled $25.6 million, or $11,394 per revenue day, compared to $49.1 million, or $10,925 per day, in the same period in 2008. Drilling margins totaled $13.3 million, or 34% of revenues, for the second quarter of 2009 versus $26.3 million, or 35% of revenues, in the second quarter of 2008. Average drilling margin per revenue day during the second quarter totaled $5,936 in 2009 versus $5,865 in the prior year period. For additional information regarding drilling margin as a non-GAAP financial measure, please refer to the disclosures contained at the end of this release.
2009 Year-To-Date Results
For the six months ended June 30, 2009, Union Drilling reported a net loss of $5.2 million, or $0.25 per share, on revenues of $93.2 million, compared to net income of $5.5 million, or $0.25 per diluted share, on revenues of $139.5 million for the same period in 2008. The net loss for the first six months of 2009 includes $2.9 million, or $0.10 per diluted share, of non-cash charges for asset impairments. Year-to-date 2009 EBITDA was $19.2 million compared to $31.5 million in 2008.
Drilling margin for the first six months of 2009 totaled $32.8 million, or 35% of revenues, compared to $47.1 million, or 34% of revenues for the same period last year. The Company totaled 5,282 revenue days on 41.1% utilization in the first half of 2009 versus 8,181 revenue days on 63.3% utilization last year. Year-to-date revenue and drilling margin averaged $17,639 and $6,219 respectively per revenue day in 2009 compared to $17,048 and $5,757 during the same period in 2008.
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