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Research and development ("R&D") expenditures charged to net earnings during the three-month periods ended March 31, 2013 and 2012 were $0.5 million and $0.6 million, respectively. During the 2013-quarter, there were no capitalized development costs (2012 - $0.1 million).
PHX Energy recently restructured its R&D department to better align with its mandate to continuously enhance the performance of the current fleet and provide leading edge technologies to its clients.
(Stated in thousands of dollars) Three-month periods ended March 31, 2013 2012 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Finance expense 1,094 556 97--------------------------------------------------------------------------------------------------------------------------------------------------------
Finance expenses relate to interest charges on the Corporation's long-term and short-term bank facilities. For the three-month period ended March 31, 2013, finance charges increased to $1.1 million from $0.6 million in the 2012-quarter. In order to fund PHX Energy's extensive capital expenditure program in 2012 and the construction of the new operations center that is held for sale, additional bank borrowings were made.
(Stated in thousands of dollars) Three-month periods ended March 31, 2013 2012 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Gains on disposition of drilling equipment 2,341 995 135Foreign exchange (losses) gains (302) 351 (186)Losses from the change in fair value of investment in equity securities - (190) 100----------------------------------------------------------------------------Other income 2,039 1,156 76--------------------------------------------------------------------------------------------------------------------------------------------------------
For the three-month period ended March 31, 2013, PHX Energy realized gains on disposition of drilling equipment of $2.3 million (2012 - $1.0 million). The dispositions of drilling equipment relate primarily to equipment lost in well bores that are uncontrollable in nature. The gain reported is net of any asset retirements that are made before the end of the equipment's useful life and self-insured down hole equipment losses, if any. Gains typically result from insurance programs undertaken whereby proceeds for the lost equipment are at current replacement values, which are higher than the respective equipment's book value. In the 2013-quarter, there were higher occurrences of losses compared to the corresponding 2012-quarter.
Offsetting other income for the three-month period ended March 31, 2013 are foreign exchange losses of $0.3 million (2012 - foreign exchange gains of $0.4 million), which resulted mainly from fluctuations in the US-Canadian exchange rates. In the 2013 quarter, the CAD weakened against the USD thereby causing revaluation losses on Canadian-denominated receivables in the US.
(Stated in thousands of dollars) Three-month periods ended March 31, 2013 2012 % Change--------------------------------------------------------------------------------------------------------------------------------------------------------Share of losses of equity-accounted investees 220 - n.m.--------------------------------------------------------------------------------------------------------------------------------------------------------
