Particle Drilling Technologies Prepares for
Second Commercial Trial and Announces Third Quarter and Year
to Date 2006 Results
Operational Highlights
* New Particle Recovery Unit
Complete
* Second PID System Now Under Construction
*
Customer Interest Continues to be Strong
HOUSTON, Aug. 8 /PRNewswire-FirstCall/ -- Particle Drilling
Technologies, Inc. (Nasdaq: PDRT) ("Company") today announced
it is preparing to mobilize its patented Particle Impact
Drilling (PID) unit to the Uinta Basin in Northeast Utah.
During the next few days, the Company will be mobilizing to
begin preparations for its second commercial trial.
Simultaneously, the Company announced its financial results
for the third quarter of fiscal 2006.
This second commercial trial will be conducted on a well at
depths below 10,000 feet and in formations similar to those
encountered on the first commercial trial in April of this
year. Based on the operational experience obtained and
subsequent equipment upgrades since the first trial, the
Company expects to have a more continuous and sustained
drilling operation during the second trial. The particle
recovery unit has been replaced by a much simpler system and
management expects that this new system will decrease
interruptions associated with the particle recovery process,
which caused the majority of the PID operational downtime
during the first trial. At this time, the Company will
continue to utilize the frac pump driven particle injection
system which performed reliably on the previous commercial
trial. The Company continues to make progress in developing
alternatives for a lower cost and more efficient injection
system.
In order to facilitate the Company's growth initiatives, a
second PID unit has been ordered and should be ready for
operation in December. This second PID unit will include a
frac pump injection system. When the new injector is fully
developed and tested the Company will deploy it for commercial
trials as a secondary injector to the primary frac pump. When
the new injector is field proven, existing and future PID
units will employ the new injector and the frac pumps will
likely be sold. Given the high demand and current market
environment for frac pumps, management believes it can recover
a majority of the capital used to purchase the frac pump. Once
the second PID unit is commissioned, the Company expects to
deploy it with one of several customers who have expressed an
interest in using the PID technology to reduce cost on their
wells.
Jim B. Terry, the Company's President and CEO stated, "We
are anxious to begin PID operations in Utah and demonstrate
the true potential of this performance drilling system. We are
also making good progress on the new injector prototypes and
believe that the results of that work will bear fruit in the
coming months. We will communicate the results of the second
commercial trial later this month or in early September
depending upon the timing of the well and the evaluation
period."
The financial results reflect the Company's continuing
status as a development stage company generating no revenue as
well as ongoing planned investment in the PID system. The
following is a summary of the quarterly and year to date
results:
Three Months Ended Nine Months Ended
June 30, June 30,
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $--- $--- $--- $---
Gross profit --- --- --- ---
Loss from operations (2,893,742) (1,715,917) (7,999,505) (3,820,307)
Net loss (2,830,545) (1,631,673) (7,675,435) (3,674,148)
Net loss per share
- basic and diluted $(0.11) $(0.07) $(0.31) $(0.17)
The Company will hold a conference call at 10:00 a.m.
Eastern Time on Wednesday, August 9, 2006, to discuss its
quarterly results and to provide a further operational update.
To participate in the call, dial 303-262-2075 and ask for the
Particle Drilling call at least 10 minutes prior to the start
time, or access it live over the Internet by logging onto the
web at /,
on the "Investor Relations" section of the Company's website.
To listen to the live call on the web, please visit the web
site at least fifteen minutes prior to the call to register,
download and install any necessary audio software.
If you cannot listen to the live webcast, an archive will
be available shortly after the call for a period of 90 days on
the "Investor Relations" section of the Company's website. A
telephonic replay of the conference call will be available
through August 16, 2006 and may be accessed by calling 303-
590-3000 and using the pass code 11066858.
Particle Drilling Technologies, Inc., headquartered in
Houston, Texas, is a development stage oilfield service and
technology company owning certain patents and pending patents
related to the Particle Impact Drilling technology. The
Company's technology is designed to enhance the rate-of-
penetration function in the drilling process, particularly in
hard rock drilling environments.
Certain statements in this press release that are not
historical but are forward-looking are subject to known and
unknown risks and uncertainties, which may cause PDTI's actual
results in future periods to be materially different from any
future performance that may be suggested in this press
release. Such risks and uncertainties may include, but are not
limited to, PDTI's ability to raise equity capital, if
necessary, and its ability to obtain equity financing on
acceptable terms, if at all, a severe worldwide slowdown in
the energy services sector, working capital constraints and
other risks described in PDTI's filings with the SEC. Further,
PDTI is a development stage company that operates in an
industry sector where securities values are highly volatile
and may be influenced by economic and other factors beyond
PDTI's control such as announcements by competitors and
service providers.
- tables to follow -
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
June 30, June 30,
2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $--- $--- $--- $---
Operating expenses:
Research and
development 1,735,857 731,054 4,469,449 1,721,457
General and
administrative 1,157,885 984,863 3,530,056 2,098,850
Total operating
expenses 2,893,742 1,715,917 7,999,505 3,820,307
Loss from
operations (2,893,742) (1,715,917) (7,999,505) (3,820,307)
Other income (expenses)
Interest income 64,018 80,725 224,314 126,102
Rental income -
related party --- 3,880 46,565 3,880
Gain on debt
extinguishment --- --- --- 26,990
Gain on assignment of
lease - related party --- --- 55,614 ---
Interest expense (821) (361) (2,423) (10,813)
Total other income
(expenses) 63,197 84,244 324,070 146,159
Net loss $(2,830,545) $(1,631,673) $(7,675,435) $(3,674,148)
Net loss per common
share, basic and
diluted $(0.11) $(0.07) $(0.31) $(0.17)
Weighted average
number of common
shares outstanding,
basic and diluted 24,968,159 24,312,819 24,461,636 21,385,891
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED BALANCE SHEETS
June 30, September 30,
2006 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $4,711,810 $10,504,646
Short term investments $385,839 $---
Accounts receivable - related party --- 42,330
Prepaid expenses 71,371 229,963
Total current assets 5,169,020 10,776,939
Property, plant & equipment, net 1,127,031 1,277,982
Intangibles, net 1,208,513 1,102,403
Other assets 33,665 391,089
Total assets $7,538,229 $13,548,413
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $884,716 $1,056,733
Short-term notes payable --- 79,880
Current portion of long-term debt 20,866 11,597
Accrued liabilities 715,570 242,633
Total current liabilities 1,621,152 1,390,843
Long-term debt 18,790 9,463
Stockholders' equity:
Common stock, $.001 par value,
100,000,000 shares authorized,
27,989,291 shares issued and
24,986,205 shares outstanding
at June 30, 2006, and 27,441,472
shares issued and 24,441,472
shares outstanding at
September 30, 2005 27,989 27,441
Additional paid-in capital 24,655,752 23,218,868
Treasury stock at cost, 3,003,086
shares at June 30, 2006
and September 30, 2005 (1,511,817) (1,500,000)
Deficit accumulated during the
development stage (17,273,637) (9,598,202)
Total stockholders' equity 5,898,287 12,148,107
Total liabilities and stockholders'
equity $7,538,229 $13,548,413
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended June 30,
2006 2005
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $(7,675,435) $(3,674,148)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Gain on debt extinguishment --- (26,990)
Gain on assignment of lease - related
party (55,614) ---
Depreciation and amortization expense 504,324 244,598
Common stock issued for services --- (66,500)
Warrants issued for services --- 57,999
Stock-based employee compensation 1,431,342 302,583
Changes in operating assets and
liabilities:
Increase in accounts receivable -
related party 1,510 (9,316)
Decrease in prepaid expenses 158,592 20,606
Decrease in accounts payable (172,017) (516,868)
Increase (decrease) in accrued
liabilities 569,371 9,365
Net cash used in operating activities (5,237,927) (3,658,671)
Cash flows from investing activities:
Payments to purchase property and
equipment (285,022) (999,651)
Payments to purchase intangibles (143,973) (35,690)
Payments to purchase other assets (28,416) (385,839)
Net cash used in investing activities (457,411) (1,421,180)
Cash flows from financing activities:
Proceeds from issuance of common
stock 6,090 18,647,666
Repurchase of common stock (11,817) (1,500,000)
Repayments of notes payable (91,771) (302,132)
Net cash provided by financing
activities (97,498) 16,845,534
Net increase in cash and cash
equivalents (5,792,836) 11,765,683
Cash and cash equivalents -
beginning of period 10,504,646 20,363
Cash and cash equivalents -
end of period $4,711,810 $11,786,046
Contacts:
J. Chris
Boswell, SVP & CFO Particle Drilling Technologies,
Inc. 713-223-3031 ext. 2085
Ken Dennard, Managing Partner
Jack Lascar, Partner
DRG&E / 713-529-6600 |
