Fourth Quarter 2013 Highlights:
• Operating Revenue totalled $119.8 million, a $43.4 million increase (or 57%) over the same period in the prior year due to the increased size and scale of Western's production services segment following the acquisition of IROC Energy Services Corp. ("IROC") on April 22, 2013, as well as higher utilization in the contract drilling segment in both Canada and the United States, coupled with a larger average drilling rig fleet in Canada. These increases were partially offset by decreased day rates in the United States, while day rates in Canada recovered in the fourth quarter of 2013 to remain unchanged, averaging approximately $28,900 in both the fourth quarters of 2013 and 2012;
• Utilization in the Canadian contract drilling segment improved to 65% as compared to 55% in the same period of 2012 and the CAODC industry average of 43%. In the United States, contract drilling utilization increased to 87% as compared to 62% in the same period of the prior year due to increased marketing efforts, the addition of the Company's first 1,500 hp AC ELR triple pad rig conversion to the United States fleet, and strong operational performance;
• Total well servicing hours in Western's production services segment increased significantly following the acquisition of IROC in the second quarter, increasing by 1,093% as compared to the same period in the prior year. Likewise, well servicing utilization improved to 53% as compared to 45% in the same period of the prior year;
• EBITDA totalled $43.5 million, a $12.1 million increase (or 39%) over the same period in the prior year. Included in EBITDA in the fourth quarter of 2013 is approximately $2 million in one-time personnel costs, which were partially offset by a $1.6 million increase in capitalized overhead. In addition, prior year EBITDA included $2.2 million of contracted shortfall commitment revenue. Normalizing for these three items, EBITDA increased $14.5 million (or 50%) from the same period in the prior year;
• Capital expenditures totalled $27.5 million and include $23.3 million of expansion capital, $3.8 million of maintenance capital and $0.4 million for critical spares and mainly relate to the drilling rig build program in the contract drilling segment relating to the construction of three drilling rigs, one of which was commissioned in the fourth quarter of 2013, with the remaining two rigs commissioned in the first quarter of 2014.
• Additionally, Western is pleased to announce a $31 million increase to the 2014 capital budget, which includes the construction of one 5,500m ELR AC triple drilling rig and one 4,500m telescopic ELR double drilling rig. With this capital announcement, coupled with Western's previously announced capital budget of $52 million, and $21 million in carry forward from Western's 2013 budget, Western's capital spending in 2014 is expected to total approximately $104 million.
Quarterly Dividend
On February 27, 2014, Western's Board of Directors declared a quarterly dividend of $0.075 per share, which will be paid on April 14, 2014, to shareholders of record at the close of business on March 31, 2014. The dividends are eligible dividends for Canadian income tax purposes. On a prospective basis, the declaration of dividends will be determined on a quarter-by-quarter basis by the Board of Directors.
