The oil and gas industry in North America is experiencing a dynamic resurgence.
As global energy demand remains robust and geopolitical shifts continue to influence supply chains, Canada and the United States are reaffirming their roles as key players in the global energy landscape. In this environment, companies that can adapt, innovate, and scale efficiently are poised to deliver strong returns—and this Calgary-based oil and gas drilling contractor is proving to be one of them.
Strong start to 2025: AKITA’s Q1 results impress
AKITA Drilling (TSX:AKT.A) has kicked off 2025 with a powerful performance, reporting a net income of $8.6 million for the three months ended March 31, 2025. This marks a significant increase from $2.6 million in the same period of 2024, reflecting the company’s ability to capitalize on favorable market conditions and operational momentum that began in late 2024.
The company’s adjusted funds flow from operations rose to $17.0 million, up from $11.2 million in Q1 2024. Despite a higher working capital build, net cash from operations climbed to $9.0 million, compared to $6.9 million a year earlier—demonstrating strong financial discipline and operational efficiency.
Canadian division leads the charge
AKITA’s Canadian operations were a standout, with operating days surging to 928 in Q1 2025 from 649 in Q1 2024. This growth was driven across all rig types—single rigs, oilsands triple rigs, and deep gas triple rigs. The division achieved a utilization rate of 61 per cent, outperforming the industry average of 54 per cent.
Adjusted revenue in Canada rose to $35.6 million, up from $27.4 million in Q1 2024. While adjusted revenue per operating day slightly decreased to $38,383, this was due to the absence of one-time revenues seen in 2024. When normalized, revenue per day actually increased by 3 per cent, reflecting modest but meaningful day rate improvements.
Operating and maintenance expenses also rose, reaching $24.7 million, up 37 per cent year-over-year. However, on a per-day basis, expenses increased only 5 per cent after adjusting for one-time labour costs, highlighting AKITA’s ability to manage inflationary pressures in supply and labour.
U.S. operations defy industry trends
In the United States, AKITA delivered a 28 per cent increase in operating days, rising to 919 from 719 in Q1 2024—this despite a year-over-year decline in the overall U.S. rig count. This performance underscores AKITA’s growing market share and operational resilience.
Adjusted operating margin in the U.S. climbed to $11.8 million, up from $7.6 million. Revenue per operating day increased to $39,077, bolstered by a one-time drill pipe revenue of $1.3 million. Even excluding this, revenue per day held steady, a notable achievement in a price-sensitive environment.
Meanwhile, adjusted operating expenses per day decreased to $26,273, down from $27,035, reflecting AKITA’s continued focus on cost control and operational efficiency.
Capital investment and debt reduction
AKITA also demonstrated a commitment to long-term growth and financial health. Capital expenditures nearly doubled to $7.0 million, reflecting investments in drill pipe and other routine capital items. At the same time, total debt was reduced to $51.9 million, down from $69.6 million a year earlier—a testament to the company’s prudent financial management.
Leadership insights
“Our primary objective entering the first quarter of 2025 was to sustain the high utilization levels we established over the third and fourth quarters of 2024, and we accomplished this objective,” Colin Dease, AKITA’s president and chief executive officer stated in a news release. “Looking ahead, our focus remains on continuing the momentum of the last two quarters for the balance of the year.”
He elaborated on this further in an exclusive interview with The Market Online’s “The Watchlist”, which you can view in its entirety by clicking the video below.
A company on the rise
Having grown nearly 16 per cent in a year’s time on the TSX, AKITA Drilling Ltd. is clearly gaining traction in both the Canadian and U.S. markets, delivering strong financial results, increasing operational activity, and maintaining a disciplined approach to cost and capital management. With a solid foundation and momentum on its side, AKITA is well-positioned to capitalize on future opportunities in the energy sector.
For investors seeking exposure to a nimble, well-managed player in the North American drilling space, AKITA Drilling Ltd. deserves a closer look. As always, deeper due diligence is encouraged—but the early signs in 2025 suggest that AKITA is drilling into a promising future.
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