|Superior Energy Services, Inc. Reports First Quarter 2011 Results|
NEW ORLEANS, April 27, 2011 /PRNewswire via COMTEX/ --
Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $15.5 million, or $0.19 per diluted share on revenue of $414.0 million for the first quarter of 2011.
These results are compared with net income of $21.5 million, or $0.27 per diluted share on revenue of $364.5 million for the first quarter of 2010.
The first quarter 2011 results include a pre-tax gain of $2.7 million from the sale of three 145-155-ft. class liftboats, and $2.1 million in non-cash, unrealized pre-tax losses from hedging contracts at the Company's equity-method investments.
David Dunlap, CEO of Superior, commented, "Although our Gulf of Mexico revenue declined 18% sequentially due to the well-documented slow pace in permitting, our first quarter results came in toward the higher end of our guidance range due to the continued strength of the U.S. land markets.
"U.S. land revenue was a record $179 million for the first quarter, which represents a 5% sequential increase as compared with a 2% increase in the drilling rig count. More importantly, demand for some of our core products and services - coiled tubing, premium drill pipe and bottom hole assemblies - increased approximately 12% from the fourth quarter of 2010. These products and services are the major focus of our 2011 domestic capital expenditures plan.
"While our overall international revenue declined 18% due to reduced utilization of our subsea operating vessels, international revenue within our drilling products and services segment increased 1%."
2011 Earnings Guidance Update
The Company's recent $500.0 million, 6.375% senior note offering is expected to increase interest expense by approximately $22.0 million - or $0.18 per share - for the remainder of 2011. As a result of this incremental expense, the Company is lowering its earnings guidance range to $1.62 and $2.02 per diluted share.
Mr. Dunlap commented, "With the exception of the increase in interest expense, we are reaffirming full year guidance. Our guidance assumes that we will benefit from our capital expenditures plan during the remainder of the year, continued acceleration of domestic land activity and from an increase in deepwater Gulf of Mexico activity. We are also encouraged by the number of deepwater permits that have been issued and are hopeful that this permitting will soon result in increased drilling activity."
For the first quarter of 2011, Gulf of Mexico revenue was approximately $131.1 million, domestic land revenue was approximately $179.1 million, and international revenue was approximately $103.8 million.
Subsea and Well Enhancement Segment
First quarter revenue for the Subsea and Well Enhancement Segment was $262.0 million, as compared with $232.8 million in the first quarter of 2010 and $306.5 million in the fourth quarter of 2010, which represents a 13% year-over-year increase and a 15% sequential decrease.
Sequentially, domestic land revenue increased 3% due to a 10% increase in coiled tubing revenue, as well as increased demand for pumping services. These increases were partially offset by a decline in demand for pressure control services. Gulf of Mexico revenue decreased 22% sequentially due to seasonal issues, and the slow pace of permitting for drilling, intervention, and end-of-life projects. These factors led to reduced activity levels for pressure control, marine engineering projects, completion tools, and coiled tubing. Another factor impacting Gulf of Mexico revenue was the sale of a saturation diving system in the fourth quarter of 2010 that did not repeat. International revenue decreased 27% due primarily to lower demand for vessels and equipment used to support subsea inspection, repair and maintenance work.
Drilling Products and Services Segment
First quarter revenue for the Drilling Products and Services Segment was $128.3 million, as compared with $114.3 million in the first quarter of 2010 - a 12% year-over-year improvement - and $120.4 million in the fourth quarter of 2010, or 7% higher sequentially.
Domestic land revenue increased 10% sequentially primarily due to increased rentals of premium drill pipe, accommodations, specialty tubulars and accessories, and stabilization equipment. Gulf of Mexico revenue increased 8% due to increased rentals of accommodations partially offset by a decrease in rentals of specialty tubulars and accessories. International revenue increased 1% primarily due to increased rentals of premium drill pipe and accessories.
Marine Segment revenue in the first quarter was $23.7 million, a 35% increase over the first quarter of 2010 and a 21% decrease from fourth quarter of 2010. Average fleet utilization in the first quarter of 2011 was 57% as compared with 47% in the first quarter of 2010 and 72% in the fourth quarter of 2010. The Company sold three liftboats from its 145-155 ft. class fleet during the first quarter.
Conference Call Information
The Company will host a conference call at 10 a.m. Central Time on Thursday, April 28, 2011. The call can be accessed from Superior's website at www.superiorenergy.com, or by telephone at 480-629-9644. For those who cannot listen to the live call, a telephonic replay will be available through Thursday, May 5, 2011 and may be accessed by calling 303-590-3030 and using the pass code 4432547. 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 and production-related needs of oil and gas companies worldwide through its brand name rental tools and its integrated well intervention services and tools, supported by an engineering staff who plan and design solutions for customers. Offshore projects are delivered by the Company's fleet of modern marine assets.
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 uncertainty of macroeconomic and business conditions worldwide, as well as the global credit markets; 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.
FOR FURTHER INFORMATION CONTACT: David Dunlap, CEO; Robert Taylor, CFO; Greg Rosenstein, VP of Investor Relations, (504) 587-7374
SOURCE Superior Energy Services, Inc.