MANAGEMENT’S DISCUSSION AND ANALYSIS Summary of Quarterly Results The following table shows key selected quarterly financial information for the Company: (1) Funds flow from operations is an additional GAAP measure under IFRS. See commentary in “Basis of Analysis  in this MD&A, Non-Standard and Additional GAAP Items”. (2) During 2011 and prior years, AKITA reported its joint venture activities using the proportionate consolidation  method of accounting which is not necessarily comparable to the equity method of accounting adopted  pursuant to IFRS 11. See “Basis of Analysis in this MD&A, Non-Standard and Additional GAAP Items”. During the fourth quarter of 2013, rig activity for the Company included 1,567 operating days compared to  1,533 operating days during the corresponding period in 2012. The increase in operating days compared to the  corresponding quarter in 2012 was due to higher activity for AKITA’s pad rigs, and was partially offset by fewer  operating days for AKITA’s conventional double and triple rigs. While operating days were higher in the fourth  quarter of 2013 compared to the corresponding period in 2012, financial statement revenue of $45,783,000  (equivalent to $58,381,000 on an adjusted basis and $37,257 per operating day on an adjusted basis) was  lower than fourth quarter 2012 financial statement revenue of $54,728,000 (equivalent to $65,542,000 on  an adjusted basis or $41,826 per operating day on an adjusted basis), largely as a result of the Company not  having construction revenue in the fourth quarter of 2013. Operating and maintenance costs, which are also  tied to activity levels, decreased during the fourth quarter of 2013 to $36,273,000 or $23,148 per operating  day on an adjusted basis from $44,232,000 or $28,227 per operating day on an adjusted basis during the  16 AKITA DRILLING LTD.  ANNUAL REPORT (Dollars in thousands, except per share)  Three Months Ended (Unaudited) Mar. 31 Jun. 30  Sep. 30 Dec. 31 Annual  Totals 2013 Revenue 60,761 28,044 32,945 45,783 167,533 Net income 12,495 2,757 3,540 7,723 26,515 Earnings per share (basic) ($) 0.70 0.15 0.20 0.43 1.48 Earnings per share (diluted) ($) 0.70 0.15 0.19 0.43 1.47 Funds flow from operations  (1) 19,985 9,121 11,300 17,213 57,619 Cash flow from (used in) operations 6,356 26,725 6,932 (459) 39,554 2012  Revenue 68,177 35,959 44,576 54,728 203,440 Net income  13,904 2,092 4,331 8,428 28,755 Earnings per share (basic and diluted) ($) 0.77 0.12 0.24 0.47 1.60 Funds flow from operations  (1) 20,366 8,368 10,804 19,874 59,412 Cash flow from operations 5,142 23,367 742 12,737 41,988 2011 Revenue  (2) 57,444 31,651 54,874 55,965 199,934 Net income 7,952 1,498 6,926 6,977 23,353 Earnings per share (basic and diluted) ($) 0.44 0.08 0.38 0.39 1.29 Funds flow from operations  (1) (2) 13,712 3,239 12,825 13,104 42,895 Cash flow from (used in) operations  (2) 6,945 15,744 (1,989) 13,496 34,196