Independence Contract Drilling, Inc. Reports Financial Results for the First Quarter Ended March 31, 2021 and Announces Additional Rig Reactivations | News

Independence Contract Drilling, Inc. Reports Financial Results for the First Quarter Ended March 31, 2021 and Announces Additional Rig Reactivations |  News

In the first quarter of 2021, the Company reported revenues of $15.5 million, a net loss of $16.0 million, or $2.58 per share, adjusted net loss (defined below) of $16.4 million, or $2.64 per share, and adjusted EBITDA loss (defined below) of $2.0 million.  These results compare to revenues of $38.5 million, a net loss of $28.2 million, or $7.53 per share, adjusted net loss of $10.6 million, or $2.82 per share, and adjusted EBITDA of $5.1 million in the first quarter of 2020, and revenues of $13.3 million, a net loss of $43.1 million, or $7.02 per share, an adjusted net loss of $16.3 million, or $2.65 per share, and adjusted EBITDA of $1.5 million in the fourth quarter of 2020.  Net loss of $16.0 million, or $2.58 per share.Adjusted net loss, as defined below, of $16.4 million, or $2.64 per share.Adjusted EBITDA loss, as defined below, of $2.0 million.Net debt, excluding finance leases and net of deferred financing costs, of $132.1 million.Marketed fleet utilization of 43%.Fully burdened margin of $2,802 per day.

Chief Executive Officer Anthony Gallegos commented, “I am very pleased with our operational performance during the first quarter of 2021.  It played out very much as expected as we safely and successfully reactivated several rigs during the quarter.  The reactivations were on budget, and the rigs hit the ground running for our clients with minimal downtime, in a few instances setting drilling records for our clients right away.  We have maintained strong cost control and operational efficiency throughout this process, but I am even more excited with the progress we made at quarter end and so far during the second quarter.  We continue to see increasing demand for all of our rigs and are experiencing dayrate improvement on renewals and reactivations across our fleet which will drive sequential improvements in reported margins over at least the remainder of the year.  Demand for ICD rigs is being driven not only by rig specification, but also by operating performance as we have displaced several larger competitor rigs with key customers.  In particular, we are seeing strong improvements in utilization for our 300 series rigs involving customers drilling extended reach laterals or using high torque drill strings.  By the end of the second quarter, we expect to have at least 15 rigs operating, of which six will be 300 series rigs, and based upon inquiries to date and stable commodity prices, we expect further reactivations during the back half of the year and continued positive dayrate momentum.” Operating costs in the first quarter of 2021 totaled $14.5 million, compared to $30.2 million in the first quarter of 2020 and $12.4 million in the fourth quarter of 2020.  Fully burdened operating costs were $12,663 per day in the first quarter of 2021, compared to $14,648 in the first quarter of 2020 and $13,719 in the fourth quarter of 2020.  Sequential decreases in operating costs per day were driven by efficiencies associated with increased operating days as well as one rig operating on a standby basis through the majority of the quarter.

Operating revenues in the first quarter of 2021 totaled $15.5 million, compared to $38.5 million in the first quarter of 2020 and $13.3 million in the fourth quarter of 2020.  Revenue per day in the first quarter of 2021 was $15,465, compared to $19,823 in the first quarter of 2020 and $16,720 in the fourth quarter of 2020.  Sequential decreases in revenue per day were driven by the expiration of two higher-dayrate legacy contracts and higher spot market exposure and one rig operating on a standby rate through the majority of the quarter. Excluding the impact from early termination revenues and reactivation costs, fully burdened rig operating margins in the first quarter of 2021 were $2,802 per day, compared to $5,175 per day in the first quarter of 2020 and $3,001 per day in the fourth quarter of 2020.  The Company currently expects operating margins in the second quarter of 2021 to increase sequentially by approximately 11% compared to the first quarter of 2021 driven primarily by favorable dayrate momentum.  Based upon recently signed contracts, further sequential improvements in margin per day are expected to occur during the third quarter of 2021 as well.

In the first quarter of 2021, operating days increased sequentially by over 31% compared to the fourth quarter of 2020.  The Company’s marketed fleet operated at 43% utilization and recorded 929 revenue days, compared to 1,738 revenue days in the first quarter of 2020, and 707 revenue days in the fourth quarter of 2020.  The Company currently expects operating days in the second quarter of 2021 to increase sequentially by approximately 22% compared to the first quarter of 2021. Quarterly Operational Results

Drilling Operations Update Selling, general and administrative expenses in the first quarter of 2021 were $3.7 million (including $0.7 million of non-cash compensation), compared to $3.8 million (including $0.6 million of non-cash compensation) in the first quarter of 2020 and $3.4 million (including $0.4 million of non-cash compensation) in the fourth quarter of 2020.  Sequential increases in cash selling, general and administrative expenses were associated with current year incentive compensation accruals, seasonal year end audit and related costs, and expenses associated with recently granted at-risk, performance-based long-term incentive awards.

Cash outlays for capital expenditures in the first quarter of 2021 were $1.7 million, offset by asset sales and recoveries of $0.7 million. Capital Expenditures and Liquidity Update The Company operated twelve rigs during the first quarter of 2021, including three rigs that were reactivated during the quarter. Overall, the Company’s operating rig count averaged 10.3 rigs during the quarter.  The Company expects to exit the second quarter of 2021 with 15 rigs operating based upon recently signed contracts in place and ongoing contractual negotiations.  The Company’s backlog of drilling contracts with original terms of six months or longer was $12.1 million as of March 31, 2021.  All of this backlog is expected to be realized during the remainder of 2021.

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  • Independence Contract Drilling, Inc. Reports Financial Results for the First Quarter Ended March 31, 2021 and Announces Additional Rig Reactivations | News
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