|Superior Energy Services Posts Record Second Quarter 2007 Results|
Diluted EPS Increases 77% from the Second Quarter of 2006 as 50% of Revenue Derived from Non-Gulf of Mexico Markets
HARVEY, La., July 30 /PRNewswire-FirstCall/ -- Superior Energy Services, Inc. (NYSE: SPN) today announced record net income of $70.1 million and diluted earnings per share of $0.85 on revenues of $396.8 million, as compared to net income of $38.7 million, or $0.48 diluted earnings per share on revenues of $261.8 million for the second quarter of 2006. The results also compare favorably to the first quarter of 2007, in which net income was $64.0 million and diluted earnings per share was $0.78, on revenues of $362.9 million.
Factors impacting the quarter as compared to the most recent quarter include the following:
* Well Intervention revenues increased 8% from the first quarter of 2007 primarily due to increased hydraulic workover and snubbing activity as well as higher coiled tubing, mechanical wireline and electric line revenues. * Rental Tool revenues increased 7% from the first quarter of 2007, largely due to increased rentals of stabilizers, drill collars and on-site accommodations. * Marine revenues decreased 2% from the first quarter of 2007 due to lower utilization for some of the Company's larger liftboats as a result of increased shipyard days. * Oil and Gas revenues increased 30% from the first quarter of 2007 due mainly to higher oil and gas production. * Revenues from non-Gulf of Mexico market areas were approximately $199 million, or 50% of total revenue, as compared to approximately $175 million, or 48% of total revenue in the first quarter of 2007 and approximately $100 million, or 38% of total revenue in the second quarter of 2006.
Terence Hall, Chairman and CEO of Superior, stated, "The diversity of our products and services combined with our expanding geographical exposure continue to be the drivers for our strong earnings growth these past several quarters. While activity increased in all of our geographic markets, the second quarter represents the first time in company history that at least 50% of our revenues were derived from market areas outside the Gulf of Mexico. Our operating units are committed to driving shareholder value by executing upon this integrated growth strategy."
For the six months ended June 30, 2007, revenues were $759.7 million and net income was $134.1 million or $1.63 diluted earnings per share, as compared to revenues of $484.2 million and net income of $70.9 million or $0.87 diluted earnings per share for the six months ended June 30, 2006.
Well Intervention Group Segment
Second quarter revenues for the Well Intervention Group were a record $190.5 million, an 8% increase from the first quarter of 2007 and a 71% increase from the second quarter of 2006. Income from operations was $42.1 million, or 22% of segment revenue as compared to $46.1 million, or 26% of segment revenue, in the first quarter of 2007. The primary drivers for the sequential growth in revenues were higher international activity for hydraulic workover and snubbing services and increased domestic land activity for coiled tubing, mechanical wireline and electric line services. Gross profit and operating margins sequentially were adversely impacted by changes in business mix due to the completion of certain well control and engineering projects.
Rental Tools Segment
Revenues for the Rental Tools Segment were a record $123.7 million, 7% higher than the first quarter of 2007 and 43% higher than the second quarter of 2006. Income from operations was $46.6 million, or 38% of segment revenue, up from $45.1 million, or 39% of segment revenue in the first quarter of 2007. Demand increased for rentals of stabilizers, drill collars, connecting iron and on-site accommodations. The operating margin was slightly lower due to business mix.
Superior's marine revenues were $35.2 million, a 2% decrease from the first quarter of 2007 and a 4% increase from the second quarter of 2006. Income from operations was $15.2 million, or 43% of segment revenue, down from $16.5 million, or 46% of segment revenue in the first quarter of 2007. Average daily revenue in the second quarter was approximately $386,000, inclusive of subsistence revenue, as compared to $399,000 per day in the first quarter of 2007. Average fleet utilization was 77% as compared to 74% in the first quarter of 2007 and 83% in the second quarter of 2006. However, utilization for the 245-ft. class and 250-ft. class liftboats was lower due to additional shipyard days for inspections and maintenance.
Liftboat Average Dayrates and Utilization by Class Size Three Months Ended June 30, 2007 ($ actual) Average Class Liftboats Dayrate Utilization 145'-155' 11 $10,469 74.3% 160'-175' 6 14,482 70.5% 200' 5 20,166 91.7% 230'-245' 3 27,589 85.0% 250' 2 39,463 64.8% Oil and Gas Segment
Oil and gas revenues were $48.2 million, a 30% increase from first quarter 2007 levels and a 43% increase over the second quarter of 2006. Income from operations was $11.9 million, or 25% of segment revenue, up from $5.1 million, or 14% of segment revenue, in the first quarter of 2007. Second quarter production was approximately 875,000 barrels of oil equivalent (boe), or about 9,600 boe per day, up from approximately 711,000 boe, or 7,900 boe per day in the first quarter of 2007. Production increased during the quarter due to a successful sidetrack drilling operation.
Conference Call Information
The Company will host a conference call at 10 a.m. Central Time on Tuesday, July 31, 2007. The call can be accessed from Superior's website at http://www.superiorenergy.com, or by telephone at 303-262-2175. For those who cannot listen to the live call, a telephonic replay will be available through Tuesday, August 7, 2007 and may be accessed by calling 303-590-3000 and using the pass code 11093868#. An archive of the webcast will be available after the call for a period of 60 days on http://www.superiorenergy.com.
Superior Energy Services, Inc. serves the drilling-related needs of oil and gas companies primarily through its rental tools segment and the production-related needs of oil and gas companies through its well intervention, rental tools and marine segments. The Company uses its production-related assets to enhance, maintain and extend existing production and, at the end of a property's economic life, plug and abandon wells and decommission platforms and structures. Superior also owns and operates mature oil and gas properties in the Gulf of Mexico.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which involve known and unknown risks, uncertainties and other factors. Among the factors that could cause actual results to differ materially are: volatility of the oil and gas industry, including the level of exploration, production and development activity; risks associated with the Company's rapid growth; changes in competitive factors and other material factors that are described from time to time in the Company's filings with the Securities and Exchange Commission. Actual events, circumstances, effects and results may be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Consequently, the forward-looking statements contained herein should not be regarded as representations by Superior or any other person that the projected outcomes can or will be achieved.
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Consolidated Statements of Operations Three and Six Months Ended June 30, 2007 and 2006 (in thousands, except earnings per share amounts) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Oilfield service and rental revenues $348,589 $228,134 $674,484 $435,132 Oil and gas revenues 48,164 33,625 85,193 49,096 Total revenues 396,753 261,759 759,677 484,228 Cost of oilfield services and rentals 162,973 101,286 305,402 194,541 Cost of oil and gas sales 18,833 18,702 36,891 32,907 Total cost of services, rentals and sales 181,806 119,988 342,293 227,448 Depreciation, depletion, amortization and accretion 45,242 25,727 84,086 48,642 General and administrative expenses 53,824 40,088 104,683 77,739 Income from operations 115,881 75,956 228,615 130,399 Other income (expense): Interest expense, net (8,463) (5,556) (16,741) (10,400) Interest income 929 1,559 1,508 2,222 Loss on early extinguishment of debt - (12,596) - (12,596) Earnings (losses) from equity- method investments 1,164 1,148 (3,842) 1,148 Income before income taxes 109,511 60,511 209,540 110,773 Income taxes 39,424 21,784 75,434 39,878 Net income $70,087 $38,727 $134,106 $70,895 Basic earnings per share $0.86 $0.49 $1.66 $0.89 Diluted earnings per share $0.85 $0.48 $1.63 $0.87 Weighted average common shares used in computing earnings per share: Basic 81,047 79,798 80,841 79,719 Diluted 82,562 81,324 82,379 81,177 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2007 AND DECEMBER 31, 2006 (in thousands) 6/30/2007 12/31/2006 (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $36,529 $38,970 Accounts receivable, net 346,200 303,800 Income taxes receivable - 2,630 Current portion of notes receivable 15,254 14,824 Prepaid insurance and other 47,139 59,563 Total current assets 445,122 419,787 Property, plant and equipment, net 958,915 804,228 Goodwill 482,798 444,687 Notes receivable 16,259 16,137 Equity-method investments 60,241 64,603 Intangible and other long-term assets, net 134,683 125,036 Total assets $2,098,018 $1,874,478 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $75,456 $65,451 Accrued expenses 139,902 141,684 Income taxes payable 8,857 - Current portion of decommissioning liabilities 36,504 35,150 Current maturities of long-term debt 810 810 Total current liabilities 261,529 243,095 Deferred income taxes 122,311 112,011 Decommissioning liabilities 86,787 87,046 Long-term debt 746,324 711,505 Other long-term liabilities 13,989 10,133 Total stockholders' equity 867,078 710,688 Total liabilities and stockholders' equity $2,098,018 $1,874,478 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES SEGMENT HIGHLIGHTS THREE MONTHS ENDED JUNE 30, 2007, MARCH 31, 2007 AND JUNE 30, 2006 (Unaudited) (in thousands) Three months ended, June 30, March 31, June 30, Revenue 2007 2007 2006 Well Intervention $190,542 $176,931 $111,675 Rental tools 123,736 116,180 86,593 Marine 35,162 35,866 33,951 Oil and Gas 48,164 37,029 33,625 Less: Oil and Gas Eliminations (2) (851) (3,082) (4,085) Total Revenues $396,753 $362,924 $261,759 Three months ended, Gross Profit (1) June 30, March 31, June 30, 2007 2007 2006 Well Intervention $81,093 $81,424 $48,320 Rental tools 84,718 80,664 58,370 Marine 19,805 21,377 20,158 Oil and Gas 29,331 18,972 14,923 Total Gross Profit $214,947 $202,437 $141,771 (1) Gross profit is calculated by subtracting cost of services from revenue for each of the Company's four segments. (2) Oil and gas eliminations represent products and services from the company's segments provided to the Oil and Gas Segment. FOR FURTHER INFORMATION CONTACT: Terence Hall, CEO; Robert Taylor, CFO; Greg Rosenstein, VP of Investor Relations, 504-362-4321
SOURCE Superior Energy Services, Inc.