AKITA announces 2025 annual results with net income of $13.9 million and debt repayment of $15 million

AKITA announces 2025 annual results with net income of $13.9 million and debt repayment of $15 million

CALGARY, AB, March 18, 2026 /CNW/ - AKITA Drilling Ltd. (TSX: AKT.A)

AKITA Drilling Ltd. ("AKITA" or the "Company") announces net income of $13.9 million for the year ended December 31, 2025, compared to $12.8 million in 2024. The increase in net income in 2025 was driven by a very strong first half of the year in the Company's US and Canadian operating segments, and was tempered by a less active second half. Adjusted funds flow from operations increased to $46,601,000 in 2025, from $44,714,000 in 2024.

Colin Dease, AKITA's Chief Executive Officer stated: "We achieved our debt target of $35 million and initiated the return of capital to shareholders through a normal course issuer bid. While the world continues to experience geopolitical uncertainty, we are optimistic about the North American recovery in the oil and gas industry.  We believe that 2026 will be a strong year for AKITA, and our team is focused on executing our strategy to deliver that success."

Activity for 2025 varied between the Canadian and US Divisions. The Canadian Division was more active in 2025 than in 2024, with 2,839 operating days in 2025 compared to 2,719 in 2024, and activity was split evenly through the year. By contrast, the US division saw a decline in operating days, with 2,825 operating days in 2025, compared to 3,025 in 2024, with approximately 60% of 2025 activity occurring in the first half of the year. 

Capital spending in 2025 was 11% higher in 2025 than in 2024, driven largely by significant investments in Level IV inspections in the Canadian fleet, which are required every 1,200 operating days. The Company continued to strengthen its balance sheet by repaying an additional $15,000,000 of debt in 2025, bringing total debt repayment over the past three years to $59 million. Excluding capitalized transaction costs, total debt was $35,000,000 at year-end 2025.

In August of 2025, the Company initiated a Normal Course Issuer Bid ("NCIB") to repurchase shares in the open market. This decision reflects the Company's view that its shares are significantly undervalued and marks a strategic shift from an exclusive focus on debt reduction toward a more balanced capital allocation approach that includes both debt repayment and shareholder returns. During the five months the NCIB was active in 2025, the Company repurchased and cancelled 752,572 Class A Non-Voting shares at an average price of $2.09 per share.

CONSOLIDATED FINANCIAL HIGHLIGHTS

United States Operations 

Adjusted operating margin for the Company's US division increased to $32,973,000 in 2025, from $31,478,000 in 2024. This improvement was primarily driven by higher non-recurring revenue, related to drill pipe replacement, which rose to $4,331,000 in 2025 from $774,000 in 2024, and was partially offset by decreasing activity in the US division.  The Company began 2025 operating an average of 10 rigs, which declined to an average of six rigs in June and further to an average of five active rigs in October. This downward trend mirrored broader industry conditions, which saw U.S. activity down 7% year over year and a 32% over the last three years. AKITA's utilization for the year ended December 31, 2025, was 52% compared to 55% in 2024. The contrast between the strong start and the weaker finish to the year is particularly evident in fourth-quarter utilization, which declined to 34% in 2025 from 70% in 2024.

Adjusted revenue per operating day increased to $38,789 in 2025 from $38,016 in 2024. When adjusted for the high non-recurring revenue noted above, however, adjusted revenue per operating day decreased by $489, or 1%, remaining relatively flat year over year despite pricing pressure associated with a lower active rig count. In the fourth quarter, after adjusting for non-recurring revenue of $1,694,000, adjusted revenue per operating day remained consistent between the fourth quarter of 2025 and the fourth quarter of 2024, underscoring the day rate stability the Company has been able to maintain.

Adjusted operating and maintenance expense per operating day decreased slightly in 2025 to $27,228 from $27,610 in 2024, reflecting continued focus on cost control within the US division. Comparing the fourth quarter of 2025 to the fourth quarter of 2024, adjusted operating and maintenance expense per operating day increased by 6%, primarily due to fixed costs being spread over fewer operating days, which declined to 475 in the fourth quarter of 2025 from 969 in the fourth quarter of 2024.

Canadian Operations

Results in Canada were effectively flat year over year, with adjusted operating margin of $31,436,000 in 2025 compared to $31,574,000 in 2024. Activity in Canada was stronger for the first eight months of 2025 than in 2024 but it lagged the prior year over the last four months due to delayed operator programs that were deferred into 2026. Overall, this translated into an increase of 120 operating days for the Canadian division on a year over year basis. The Company's oil sands triples and deep gas triple rigs recorded significant operating day increases in 2025, up 20% and 15% respectively. These gains were offset by a 14% decrease in operating days for the Company's single rigs and a 13% decrease for its double rigs.  AKITA's Canadian fleet was 46% utilized in 2025, compared to the industry utilization rate of 43%.

Adjusted revenue per operating day was consistent year over year, with less than a 1% change from 2024 to 2025. Included in 2024 revenue, however, was $1,500,000 in contract cancelation revenue. Adjusting for this item, adjusted revenue per operating day increased by $653 year over year reflecting the shift in rig mix toward more triple rigs operating  in 2025, as well as modest day rate increases. 

Adjusted operating and maintenance expenses per operating day increased by 2% to $27,632 in 2025 from $27,010 in 2024. Cost increases were concentrated in the second half of the year, with the largest impact in the fourth quarter as rigs were prepared for January 2026 programs without offsetting revenue.

With adjusted revenue per operating day effectively flat and  adjusted operating and maintenance expenses per operating day increasing by 2%, adjusted operating margin per operating day fell 5% in 2025 compared to 2024. This reduced per-day margin was offset by higher overall activity, resulting essentially in flat adjusted operating margin year over year.

FURTHER INFORMATION

This news release shall be used as preparation for reading the full disclosure documents. AKITA's audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2025 will be available on the AKITA website (www.akita-drilling.com) or via SEDAR+ (www.sedarplus.ca) or can be requested in print from the Company.

INVESTOR INQUIRIES:
Darcy Reynolds, CPA, CA
Vice President, Finance and Chief Financial Officer
(403) 292-7537

Non-GAAP and Supplementary Financial Measures

Non-GAAP Financial Measures
Adjusted Revenue and Operating and Maintenance Expenses

Revenue and operating and maintenance expenses in AKITA's Canadian operating segment include revenue and expenses from AKITA's wholly-owned drilling rigs as well as its share of joint venture revenue and expenses.

Excluded from the revenue and expenses in AKITA's Canadian and US operating segment are flow through charges that are billed to operators and repaid to the Company. The volume and timing of the flow through charges can artificially impact the operational per day analysis and as a result management and certain investors may find the comparability between periods is improved when these flow through charges are excluded from revenue per day and operating and maintenance expenses per day. The flow through charges do not have any impact on the Company's net income as the amounts offset each other.

Adjusted Funds Flow from Operations
Adjusted funds flow from operations is not a recognized GAAP measure under IFRS and readers should note that AKITA's method of determining adjusted funds flow from operations may differ from methods used by other companies, and includes cash flow from operating activities before working capital changes, equity income from joint ventures, and income tax amounts paid or recovered during the period.  Nonetheless, management and certain investors may find adjusted funds flow from operations to be a useful measurement to evaluate the Company's operating results at year-end and within each year, since the seasonal nature of the business affects the comparability of non-cash working capital changes both between and within periods.

Non-GAAP Ratios
"Adjusted funds flow from operations per share" is calculated on the same basis as net loss per class A and class B share basic and diluted, utilizing the basic and diluted weighted average number of class A and class B shares outstanding during the periods presented.

"Adjusted revenue per operating day" may be useful to analysts, investors, other interested parties and management as a measure of pricing strength and is calculated by dividing adjusted revenue by the number of operating days for the period.

"Adjusted operating and maintenance expenses per operating day" may be useful to analysts, investors, other interested parties and management as it demonstrates a degree of cost control and provides a proxy for specific inflation rates incurred by the Company.

FORWARD-LOOKING INFORMATION:

Certain statements contained in this news release may constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", and similar expressions.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.

The Company's actual results could differ materially from those anticipated in this forward-looking information as a result of regulatory decisions, competitive factors in the industries in which the Company operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Company.

The Company believes that the expectations reflected in the forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

Any forward-looking information contained in this news release represents the Company's expectations as of the date hereof, and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

SOURCE AKITA Drilling Ltd.