PARTICLE DRILLING TECHNOLOGIES ANNOUNCES YEAR-END
RESULTS; SECOND COMMERCIAL TRIAL READY
TO BEGIN IN UTAH
Operational Highlights
- Second Commercial Trial To Begin Within Days
- New Particle Recovery Unit Complete and Operating Effectively
- Second PID System Should Be Ready For Operation In January 2007
Financial Highlights
- New Growth Capital Secured in $11.75 million Private Placement
HOUSTON – November 15, 2006 – Particle Drilling Technologies, Inc. (NASDAQ: PDRT)
(“Company”) today announced its financial results for the year ended September 30, 2006 and
that it has mobilized personnel and equipment to begin its second commercial trial using its
patented Particle Impact Drilling (PID) unit in the Uinta Basin in Northeast Utah. Once the
PID operation is completed and the results are evaluated and agreed with the customer, the
Company will announce the total footage drilled and the total time saved, if any, on the target
interval. The Company will work towards completing this drilling interval and assuming success
FOR IMMEDIATE RELEASE
NEWS RELEASE
on this well, the Company is prepared to conduct its third commercial trial within the next 30
days.
As previously announced, in order to facilitate the Company’s growth initiatives, a
second PID unit has been ordered and should be ready for operation in January. The Company is
actively working to secure additional contractual work for both PID units with its current
customer and with other potential customers.
Jim B. Terry, the Company’s President and CEO stated, “We are very excited about the
progress we made this year in developing this game changing drilling technology and are looking
forward to commencing Particle Impact Drilling operations on our second commercial trial in the
next few days. We are anxious to complete PID operations on this commercial trial and
hopefully to begin adding backlog for the remainder of the year. We are also continuing to make
good progress on the new injector prototypes and plan to field test one or both of those units in
the next several months on a commercial well. We will communicate the full results of the
second commercial trial later this month or in early December depending upon the drilling
results and the evaluation period.”
The financial results reflect the Company’s status as a development stage company
during 2006, generating no revenue. The following is a summary of the quarterly and yearend
results:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
|
Year Ended September 30 |
|
|
|
|
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
| Revenues |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
| Gross profit |
|
- |
|
- |
|
- |
|
- |
| Loss from operations |
|
(2,546,537) |
|
(2,164,161) |
|
(10,546,042) |
|
(5,984,468) |
| Net loss |
|
(2,514,152) |
|
(2,050,270) |
|
(10,189,587) |
|
(5,724,418) |
| Net loss per share - basic and diluted |
$ |
( 0.10) |
$ |
(0.08) |
$ |
(0.42) |
$ |
(0.26) |
The Company will hold a conference call at 10:00 a.m. Eastern Time on Thursday,
November 16, 2006, to discuss its year end results and to provide a further operational update.
To participate in the call, dial 303-262-2137 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
www.particledrilling.com, 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 November 23,, 2006 and may
be accessed by calling 303-590-3000 and using the pass code 11074778.
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 September 30 |
|
Year Ended September 30 |
|
|
|
|
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
| Revenues |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
| Operating Expenses: |
| Research and development |
|
1,494,989 |
|
1,080,698 |
|
5,964,438 |
|
2,802,155 |
| General and administrative |
|
1,051,548 |
|
1,083,463 |
|
4,581,604 |
|
3,182,313 |
| Total operating expenses |
|
2,546,537 |
|
2,164,161 |
|
10,546,042 |
|
5,984,468 |
| Loss from operations |
|
(2,546,537) |
|
(2,164,161) |
|
(10,546,042) |
|
(5,984,468) |
|
|
|
|
|
|
|
|
|
| Other income (expenses) |
| Interest income |
|
36,600 |
|
83,203 |
|
260,914 |
|
209,305 |
| Rental income - related party |
|
- |
|
23,282 |
|
46,565 |
|
27,162 |
| Gain on debt extinguishment |
|
- |
|
8 ,293 |
|
- |
|
35,283 |
| Gain on assignment of lease - related party |
|
- |
|
- |
|
55,614 |
|
- |
| Interest expense |
|
(4,215) |
|
(887) |
|
(6,638) |
|
(11,700) |
| Total other income (expenses) |
|
32,385 |
|
113,891 |
|
356,455 |
|
260,050 |
| Net loss |
$ |
(2,514,152) |
$ |
(2,050,270) |
$ |
(10,189,587) |
$ |
(5,724,418) |
Net loss per common share,
basic and diluted |
$ |
(0.10) |
$ |
(0.08) |
$ |
(0.42) |
$ |
(0.26) |
| Weighted average number of
common shares outstanding,
basic and diluted |
|
25,001,047 |
|
24,312,819 |
|
24,520,619 |
|
22,150,365 |
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED BALANCE SHEETS |
|
|
September 30 |
|
September 30 |
|
|
2006 |
|
2005 |
|
|
(Unaudited) |
|
|
ASSETS |
| Current assets: |
| Cash and cash equivalents |
$ |
2,291,586 |
$ |
10,504,646 |
| Short term investments |
$ |
3 85,839 |
$ |
- |
| Accounts receivable - related party |
|
- |
|
42,330 |
| Prepaid expenses |
|
234,488 |
|
229,963 |
Total current assets |
|
2,911,913 |
|
10,776,939 |
Property, plant & equipment, net |
|
1,326,713 |
|
1,277,982 |
Intangibles, net |
|
1,230,086 |
|
1,102,403 |
Other assets |
|
14,650 |
|
391,089 |
Total assets |
$ |
5,483,362 |
$ |
13,548,413 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities: |
| Accounts payable |
$ |
8 30,552 |
$ |
1 ,056,733 |
| Short-term notes payable |
|
179,143 |
|
79,880 |
| Current portion of long-term debt |
|
19,270 |
|
11,597 |
| Accrued liabilities |
|
471,463 |
|
242,633 |
Total current liabilities |
|
1,500,428 |
|
1,390,843 |
Long-term debt |
|
15,305 |
|
9,463 |
Stockholders' equity: |
| Common stock, $.001 par value, 100,000,000 shares authorized,
28,013,291 shares issued and 25,010,205 shares outstanding
at September 30, 2006, and 27,441,472 shares issued and 24,441,472 |
|
|
|
|
| shares outstanding at September 30, 2005 |
|
28,012 |
|
27,441 |
| Additional paid-in capital |
|
25,239,223 |
|
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 |
|
(19,787,789) |
|
(9,598,202) |
Total stockholders' equity |
|
3,967,629 |
|
12,148,107 |
Total liabilities and stockholders' equity |
$ |
5,483,362 |
$ |
13,548,413 |
PARTICLE DRILLING TECHNOLOGIES, INC.
(a development stage enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
|
|
|
|
Twelve Months Ended September 30 |
|
|
2006 |
|
2005 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
| Cash flows from operating activities: |
| Net loss |
$ |
(10,189,587$ ) |
$ |
(5,724,418) |
| Adjustments to reconcile net loss to net cash used in operating
activities: |
| Gain on debt extinguishment |
|
- |
|
(35,283) |
| Gain on assignment of lease - related party |
|
(55,614) |
|
- |
| Depreciation and amortization expense |
|
688,186 |
|
391,467 |
| Common stock issued for services |
|
- |
|
(66,500) |
| Warrants issued for services |
|
- |
|
57,999 |
| Stock-based employee compensation |
|
2,014,476 |
|
6 14,900 |
| Changes in operating assets and liabilities: |
| Increase in accounts receivable - related party |
|
1,510 |
|
(42,330) |
| Decrease in prepaid expenses |
|
249,460 |
|
(68,428) |
| Decrease in accounts payable |
|
(226,181) |
|
221,329 |
| Increase (decrease) in accrued liabilities |
|
325,627 |
|
26,080 |
Net cash used in operating activities |
|
(7,192,123) |
|
(4,625,184) |
Cash flows from investing activities: |
| Payments to purchase property and equipment |
|
(636,930) |
|
(1,167,134) |
| Payments to purchase intangibles |
|
(178,170) |
|
(170,281) |
| Payments to purchase other assets |
|
(28,415) |
|
(385,839) |
Net cash used in investing activities |
|
(843,515) |
|
(1,723,254) |
|
|
|
|
|
Cash flows from financing activities: |
| Proceeds from issuance of common stock |
|
6,089 |
|
18,647,666 |
| Repurchase of common stock |
|
(11,817) |
|
(1,500,000) |
| Repayments of notes payable |
|
(171,694) |
|
(314,945) |
Net cash provided by financing activities |
|
(177,422) |
|
16,832,721 |
Net increase in cash and cash equivalents |
|
(8,213,060) |
|
10,484,283 |
Cash and cash equivalents - beginning of period |
|
10,504,646 |
|
20,363 |
Cash and cash equivalents - end of period |
$ |
2,291,586 |
$ |
10,504,646 |
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 |
