Stoneham Drilling Trust
TSX : SDG.UN

Stoneham Drilling Trust

March 30, 2006 09:00 ET

Stoneham Drilling Trust: Financial Results for the Fourth Quarter and Year Ended December 31, 2005

CALGARY, ALBERTA--(CCNMatthews - March 30, 2006) - Stoneham Drilling Trust ("Stoneham" or the "Trust") (TSX:SDG.UN) achieved record fourth quarter revenue, net earnings and cash flow from operations, benefiting from additional rigs in operation and continued strong demand for our services.



Three months ended Years ended
HIGHLIGHTS December 31, December 31,
(000s except for 2005 2004 Change 2005 2004 Change
per trust unit amounts) $ $ % $ $ %

Revenue 13,631 7,758 76% 37,360 27,155 38%
Net earnings 5,133 1,937 165% 10,774 5,608 92%
Per unit (diluted) 0.77 0.60 28% 1.80 1.74 3%
Cash flow from
operations (1) 6,479 2,716 139% 14,473 8,546 69%
Per unit (diluted) 0.98 0.84 17% 2.42 2.65 -9%
EBITDA (2) 6,412 2,908 120% 14,351 9,340 54%

Distributions paid
and payable 2,542 - - 9,172 - -
Payout ratio 39% - - 63% - -
Units outstanding
(weighted average) 6,644 2,823 135% 5,991 2,823 112%
Units outstanding
(diluted) 6,644 3,223 106% 5,991 3,223 86%

Operating Highlights
Average number of
rigs (3) 9 6 50% 7.7 6 28%
Rigs at December 31 10 6 67% 10 6 67%
Operating days 700 454 54% 2,031 1,599 27%
Utilization rate (4) 84.5% 82.2% 3% 71.8% 72.8% -1%
Industry average (4) 71.8% 61.7% 16% 59.6% 52.9% 13%

(1) Readers are advised that cash flow from operations does not have a
standardized meaning prescribed by GAAP and therefore may not be
comparable to other companies. However, Stoneham does compute cash
flow from operations on a consistent basis for each reporting
period.

(2) EBITDA means earnings before interest, taxes, depreciation and
amortization. Readers are cautioned that EBITDA does not have a
standardized meaning prescribed by GAAP and therefore may not be
comparable to other companies. However, Stoneham does compute EBITDA
on a consistent basis for each reporting period.

(3) Rig 7 was deployed in February, Rig 8 in July, Rig 9 in September
and Rig 10 in December 2005.

(4) Rig utilization is calculated using operating days (spud to rig
release). It does not include stand-by, moving, rig-up or rig-out
days.


As a result of Stoneham's rig construction program and strong demand for Stoneham's services, revenue for the fourth quarter of 2005 grew by 76% to $13.6 million, compared to $7.8 million for the fourth quarter of 2004. Net earnings and cash flow from operations each more than doubled to $5.1 million and $6.5 million respectively, as a result of the deployment of new rigs, price improvements and reduced interest costs.

Rig operating days in the quarter increased 54% to 700, compared to 454 in the fourth quarter of 2004. The increase is attributable to the deployment of new rigs as well as continued strong demand for Stoneham's services. Year-over-year rig operating days increased 27% to 2,031 as a result of Stoneham's rig construction program and increased activity on existing equipment. Stoneham's rig utilization continues to exceed the industry average by 18% in the fourth quarter and by 20% for 2005.

During the quarter Stoneham announced the planned construction of an additional five drilling rigs: two telescopic 3,500 metre double drilling rigs and three sling-shot cantilever triple drilling rigs. The rigs are expected to commence work for existing clients under long term contracts upon their completion in the third and fourth quarters of 2006.

In conjunction with the construction program, Stoneham closed a private placement on December 8, 2005 issuing 1,866,700 trust units at $22.50 per trust unit for gross proceeds of $42.0 million. Net proceeds of the issue after underwriting fees and expenses amounted to $39.8 million.

Subsequent to year end the Trust (subject to completion of formal loan documentation) entered into a financing arrangement consisting of a $30.0 million, 364-day extendable revolving credit facility to finance a portion of the remaining rig construction costs.

Selected financial information relating to the three and twelve month periods ended December 31, 2005 and 2004 is attached to this press release. This information should be read in conjunction with the consolidated financial statements and the notes thereto of Stoneham Drilling Trust for the years ended December 31, 2005 and 2004 and accompanying management's discussion and analysis that are being filed today with securities regulators and will be available on www.sedar.com and on Stoneham's website at www.stonehamdrilling.com.

Stoneham Drilling Trust is an income trust that provides contract drilling services to oil and natural gas exploration and production companies operating in western Canada. With its modern, innovative fleet of ten telescopic drilling rigs and seven additional rigs currently under construction, Stoneham is an industry leader in operational performance, safety and rig utilization. Stoneham trades on the TSX under the symbol SDG.UN. The Trust pays monthly cash distributions to unitholders. To learn more about Stoneham, log on to our website at www.stonehamdrilling.com.

This news release may contain forward-looking statements concerning the anticipated performance of Stoneham. Forward-looking statements are based on the estimates and opinions of management at the date the statements are made, and, subject to its obligations under applicable law, Stoneham does not intend, and does not assume any obligation to update these forward looking statements if conditions or opinions should change.



Consolidated Balance Sheets
($000s)
December December
31, 31,
2005 2004
(audited) (audited)
ASSETS

Current
Cash and cash equivalents $ 35,659 $ -
Accounts receivable 14,595 7,005
Prepaid expenses 513 743
------------------------------------------------------------------------
50,767 7,748

Property, plant and equipment 58,789 28,613
------------------------------------------------------------------------

$ 109,556 $ 36,361
------------------------------------------------------------------------
------------------------------------------------------------------------

LIABILITIES

Current
Bank indebtedness $ - $ 1,919
Accounts payable and accrued liabilities 7,847 2,287
Distributions payable 1,003 -
Income taxes payable - 4
Current portion of obligations under capital lease 391 3,206
Callable debt 757 9,612
Due to unitholders - 1,034
Current portion of long-term debt - 187
------------------------------------------------------------------------
9,998 18,249

Obligations under capital lease 378 770
------------------------------------------------------------------------
10,376 19,019
UNITHOLDERS' EQUITY

Unitholders' capital 89,198 8,962
Accumulated earnings 19,154 8,380
Accumulated distributions to unitholders (9,172) -
------------------------------------------------------------------------
99,180 17,342

$ 109,556 $ 36,361
------------------------------------------------------------------------
------------------------------------------------------------------------


Consolidated Statements of Earnings and Accumulated Earnings
($000s except for per trust unit amounts)

Three months Twelve months
ended ended
December 31, December 31,
2005 2004 2005 2004
(unaudited) (unaudited) (audited) (audited)

REVENUE $ 13,631 $ 7,758 $ 37,360 $ 27,155
------------------------------------------------------------------------

EXPENSES
Operating 6,494 4,412 20,199 16,045
Amortization 1,346 778 3,699 2,937
General and administrative 725 437 2,810 1,769
Interest on term and callable
debt 27 174 212 720
Other interest (income) (94) 19 (334) 75
------------------------------------------------------------------------
8,498 5,820 26,586 21,546
------------------------------------------------------------------------
Net earnings before
non-controlling interest 5,133 1,938 10,774 5,609
------------------------------------------------------------------------
Non-controlling interest - 1 - 1
------------------------------------------------------------------------

Net earnings 5,133 1,937 10,774 5,608
Accumulated earnings,
beginning of period 14,021 6,443 8,380 2,772
------------------------------------------------------------------------
Accumulated earnings,
end of period $ 19,154 $ 8,380 $ 19,154 $ 8,380
------------------------------------------------------------------------
------------------------------------------------------------------------

Earnings per unit
Basic $ 0.77 $ 0.69 $ 1.80 $ 1.99
Diluted $ 0.77 $ 0.60 $ 1.80 $ 1.74


Consolidated Statements of Cash Flows
($000s)

Three months Twelve months
ended ended
December 31, December 31,
2005 2004 2005 2004
(unaudited) (unaudited) (audited) (audited)

OPERATING ACTIVITES
Net earnings for the period $ 5,133 $ 1,937 $ 10,774 $ 5,608
Adjustments for items not
affecting cash
Amortization 1,346 778 3,699 2,937
Non-controlling interest - 1 - 1
------------------------------------------------------------------------
Cash flow from operations 6,479 2,716 14,473 8,546
Changes in non-cash working
capital (4,700) (1,536) (7,020) (63)
------------------------------------------------------------------------
1,779 1,180 7,453 8,483
------------------------------------------------------------------------

INVESTING ACTIVITES
Purchase of property, plant
and equipment (14,808) (7,594) (33,874) (7,910)
Changes in accounts payable
relating to investing
activities 2,929 - 5,216 -
------------------------------------------------------------------------
(11,879) (7,594) (28,658) (7,910)
------------------------------------------------------------------------

FINANCING ACTIVITIES
Term and callable debt
repayments (622) (1,608) (12,249) (6,570)
Term and callable debt
financing - 6,745 - 6,745
Trust unit issue 39,754 - 79,024 -
Proceeds on exercise of
Trust unit options - - 200 -
Distributions paid and
payable to Trust
unitholders (2,542) - (9,172) -
Due to Trust unitholders - 11 (23) 24
Changes in accounts payable
relating to financing
activities 233 - 1,003 -
------------------------------------------------------------------------
36,823 5,148 58,783 199
------------------------------------------------------------------------
Increase (Decrease) in cash
and cash equivalents 26,723 (1,266) 37,578 772
Cash and cash equivalents
(Bank indebtedness),
beginning of period 8,936 (653) (1,919) (2,691)
------------------------------------------------------------------------
Cash and cash equivalents
(Bank indebtedness), end
of period $ 35,659 $ (1,919) $ 35,659 $ (1,919)
------------------------------------------------------------------------
------------------------------------------------------------------------



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