Letter From the CEO

2006 represents our first full year as a public company and was a banner year in terms of growth and profitability.  It was a record year for our company using virtually every financial and operational metric.  Through acquisition and refurbishment of our inventoried rigs, we grew our rig fleet by 53% in 2006.  This rapid ascent posed a myriad of challenges, and we are extremely pleased to have met those challenges and accomplished our strategic goals.   

Our financial results for 2006 reflected the strength of our company.  Revenue in 2006 grew to $286 million compared to $78 million in the previous year.  The company generated $130 million in EBITDA in 2006 compared to $22 million for the prior year.  We recorded fully diluted earnings per share of $2.43 versus $.31 in 2005.  The company has maintained a conservative capital structure despite our growth and is poised to take advantage of opportunities that might present themselves.

Subsequent to year end, we acquired a well servicing company.  This was the first step in our diversification strategy and our initial entrée into the production services industry.  This acquisition gives us the opportunity to capture more of the cash flows from the complete life cycle of a well.  We want to continue to expand our service lines and diversify our revenue stream.  We believe the likely outcome of this strategy is greater stability of profits and acceptable returns.       

Bronco has continued to expand its geographic reach.  We currently operate drilling rigs in Oklahoma, Texas, Louisiana, Colorado, Kansas and North Dakota. We operate service rigs in Oklahoma, Texas, Kansas, New Mexico and Colorado.  We believe that resource plays will continue to be the catalyst for increased drilling activity and strong service demand in the contiguous United States, and Bronco has positioned itself to reap the benefits. We will continue to explore all viable areas both in the lower 48 and abroad.

We are extremely proud of past accomplishments but not complacent as we push toward new heights.  We intend to continue our growth-oriented style via select acquisitions and opportune refurbishments of our inventoried rigs.  We are unwavering in our commitment to build shareholder value. We believe strongly in treating each shareholder as a true owner and are desirous of managing the Company in a fashion that we would support if such roles were reversed. 

 

Frank Harrison
Chief Executive Officer