Superior Energy Services Announces Second Quarter 2017 Results
“In the Gulf of
“Drilling activity also continued to slow in international markets during the quarter, primarily offshore
“The U.S. land business has experienced significant improvement through the first half of 2017. With customer activity, revenue and cash flows all ahead of expectations, we now expect our capital expenditures for the year to be within a range of
Second Quarter 2017 Geographic Breakdown
U.S. land revenue was
Drilling Products and Services Segment
The Drilling Products and Services segment revenue in the second quarter of 2017 was
U.S. land revenue increased 31% sequentially to
Onshore Completion and Workover Services Segment
The Onshore Completion and Workover Services segment revenue in the second quarter of 2017 was
During the quarter, the Company spent approximately
Production Services Segment
The Production Services segment revenue in the second quarter of 2017 was
U.S. land revenue increased 41% sequentially to
Technical Solutions Segment
The Technical Solutions segment revenue in the second quarter of 2017 was
U.S. land revenue decreased 13% sequentially to
Conference Call Information
The Company will host a conference call at
About
The press release contains, and future oral or written statements or press releases by us and our management may contain, certain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks” and “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact regarding the Company’s financial position, financial performance, liquidity, strategic alternatives, market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by our management in light of its experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from such statements. Such uncertainties include, but are not limited to: the cyclicality and volatility of the oil and gas industry, including changes in prevailing levels of capital expenditures, exploration, production and development activity; changes in prevailing oil and gas prices or expectations about future prices; operating hazards, including the significant possibility of accidents resulting in personal injury or death, property damage or environmental damage for which we may have limited or no insurance coverage or indemnification rights; the effect of regulatory programs (including worker health and safety laws) and environmental matters on our operations or prospects, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for our pressure pumping services, or that future changes in climate change legislation could result in increased operating costs or reduced commodity demand globally; counter-party risks associated with reliance on key suppliers; risks associated with the uncertainty of macroeconomic and business conditions worldwide; changes in competitive and technological factors affecting our operations; credit risk associated with our customer base; the potential inability to retain key employees and skilled workers; challenges with estimating our oil and natural gas reserves and potential liabilities related to our oil and natural gas property; risk associated with potential changes of
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands, except earnings per share amounts) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended |
|||||||||||||||||||
June 30, | March 31, | June 30, |
||||||||||||||||||
2017 |
2016 |
2017 |
2017 |
2016 |
||||||||||||||||
Revenues | $ | 470,068 | $ | 356,271 | $ | 400,936 | $ | 871,004 | $ | 769,404 | ||||||||||
Cost of services and rentals (exclusive of depreciation, depletion, amortization and accretion) | 351,802 | 258,635 | 321,986 | 673,788 | 543,974 | |||||||||||||||
Depreciation, depletion, amortization and accretion | 108,119 | 132,037 | 114,281 | 222,400 | 268,709 | |||||||||||||||
General and administrative expenses | 76,708 | 82,747 | 75,493 | 152,201 | 183,724 | |||||||||||||||
Reduction in value of assets | - | 460,283 | - | - | 462,461 | |||||||||||||||
Loss from operations | (66,561 | ) | (577,431 | ) | (110,824 | ) | (177,385 | ) | (689,464 | ) | ||||||||||
Other income (expense): | ||||||||||||||||||||
Interest expense, net | (23,333 | ) | (22,748 | ) | (24,250 | ) | (47,583 | ) | (46,554 | ) | ||||||||||
Other income (expense) | (2,156 | ) | 10,681 | 649 | (1,507 | ) | 18,436 | |||||||||||||
Loss from continuing operations before income taxes | (92,050 | ) | (589,498 | ) | (134,425 | ) | (226,475 | ) | (717,582 | ) | ||||||||||
Income taxes | (30,011 | ) | (120,866 | ) | (44,764 | ) | (74,775 | ) | (164,414 | ) | ||||||||||
Net loss from continuing operations | (62,039 | ) | (468,632 | ) | (89,661 | ) | (151,700 | ) | (553,168 | ) | ||||||||||
Loss from discontinued operations, net of income tax | (1,767 | ) | (2,225 | ) | (1,998 | ) | (3,765 | ) | (4,492 | ) | ||||||||||
Net loss | $ | (63,806 | ) | $ | (470,857 | ) | $ | (91,659 | ) | $ | (155,465 | ) | $ | (557,660 | ) | |||||
Loss per share information: | ||||||||||||||||||||
Basic and Diluted | ||||||||||||||||||||
Net loss from continuing operations | $ | (0.41 | ) | $ | (3.09 | ) | $ | (0.59 | ) | $ | (1.00 | ) | $ | (3.66 | ) | |||||
Loss from discontinued operations | (0.01 | ) | (0.02 | ) | (0.01 | ) | (0.02 | ) | (0.03 | ) | ||||||||||
Net loss | $ | (0.42 | ) | $ | (3.11 | ) | $ | (0.60 | ) | $ | (1.02 | ) | $ | (3.69 | ) | |||||
Weighted average common shares used in computing earnings per share: | ||||||||||||||||||||
Basic and diluted | 152,857 | 151,456 | 152,701 | 152,317 | 151,124 | |||||||||||||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
June 30, 2017 and December 31, 2016 | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
6/30/2017 | 12/31/2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 177,772 | $ | 187,591 | |||
Accounts receivable, net | 396,814 | 297,164 | |||||
Income taxes receivable | 1,888 | 101,578 | |||||
Prepaid expenses | 42,926 | 37,288 | |||||
Inventory and other current assets | 141,292 | 130,772 | |||||
Assets held for sale | 27,322 | 27,158 | |||||
Total current assets | 788,014 | 781,551 | |||||
Property, plant and equipment, net | 1,455,276 | 1,605,365 | |||||
Goodwill | 806,191 | 803,917 | |||||
Notes receivable | 58,317 | 56,650 | |||||
Intangible and other long-term assets, net | 178,132 | 222,772 | |||||
Total assets | $ | 3,285,930 | $ | 3,470,255 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 133,354 | $ | 94,831 | |||
Accrued expenses | 218,123 | 218,192 | |||||
Income taxes payable | - | 694 | |||||
Current portion of decommissioning liabilities | 22,212 | 22,164 | |||||
Liabilities held for sale | 6,883 | 8,653 | |||||
Total current liabilities | 380,572 | 344,534 | |||||
Deferred income taxes | 182,289 | 243,611 | |||||
Decommissioning liabilities | 104,891 | 101,513 | |||||
Long-term debt, net | 1,287,156 | 1,284,600 | |||||
Other long-term liabilities | 167,553 | 192,077 | |||||
Total stockholders' equity | 1,163,469 | 1,303,920 | |||||
Total liabilities and stockholders' equity | $ | 3,285,930 | $ | 3,470,255 | |||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
SIX MONTHS ENDED JUNE 30, 2017 AND 2016 | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
2017 |
2016 |
||||||||
Cash flows from operating activities: | |||||||||
Net loss | $ | (155,465 | ) | $ | (557,660 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
Depreciation, depletion, amortization and accretion | 222,400 | 268,709 | |||||||
Reduction in value of assets | - | 462,461 | |||||||
Other noncash items | (42,898 | ) | (125,403 | ) | |||||
Changes in working capital and other | (7,016 | ) | 49,595 | ||||||
Net cash provided by operating activities | 17,021 | 97,702 | |||||||
Cash flows from investing activities: | |||||||||
Payments for capital expenditures | (56,649 | ) | (67,402 | ) | |||||
Other | 34,690 | 1,980 | |||||||
Net cash used in investing activities | (21,959 | ) | (65,422 | ) | |||||
Cash flows from financing activities: | |||||||||
Net repayments of long-term debt | - | (84,664 | ) | ||||||
Other | (6,974 | ) | (19,730 | ) | |||||
Net cash used in financing activities | (6,974 | ) | (104,394 | ) | |||||
Effect of exchange rate changes in cash | 2,093 | (6,056 | ) | ||||||
Net decrease in cash and cash equivalents | (9,819 | ) | (78,170 | ) | |||||
Cash and cash equivalents at beginning of period | 187,591 | 564,017 | |||||||
Cash and cash equivalents at end of period | $ | 177,772 | $ | 485,847 | |||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | ||||||||||
REVENUE BY GEOGRAPHIC REGION BY SEGMENT | ||||||||||
THREE MONTHS ENDED JUNE 30, 2017, MARCH 31, 2017 AND JUNE 30, 2016 | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
Three months ended, | ||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | ||||||||
U.S. land | ||||||||||
Drilling Products and Services | $ | 27,770 | $ | 21,162 | $ | 11,613 | ||||
Onshore Completion and Workover Services | 249,079 | 204,979 | 115,893 | |||||||
Production Services | 33,062 | 23,435 | 20,476 | |||||||
Technical Solutions | 7,921 | 9,085 | 9,121 | |||||||
Total U.S. land | $ | 317,832 | $ | 258,661 | $ | 157,103 | ||||
Gulf of Mexico | ||||||||||
Drilling Products and Services | 22,266 | 23,485 | 34,504 | |||||||
Onshore Completion and Workover Services | - | - | - | |||||||
Production Services | 19,937 | 17,746 | 19,991 | |||||||
Technical Solutions | 42,030 | 33,717 | 49,786 | |||||||
Total Gulf of Mexico | $ | 84,233 | $ | 74,948 | $ | 104,281 | ||||
International | ||||||||||
Drilling Products and Services | $ | 18,791 | $ | 23,784 | $ | 30,087 | ||||
Onshore Completion and Workover Services | - | - | - | |||||||
Production Services | 35,607 | 27,424 | 44,505 | |||||||
Technical Solutions | 13,605 | 16,119 | 20,295 | |||||||
Total International | $ | 68,003 | $ | 67,327 | $ | 94,887 | ||||
Total Revenues | $ | 470,068 | $ | 400,936 | $ | 356,271 | ||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||
SEGMENT HIGHLIGHTS | |||||||||||||
THREE MONTHS ENDED JUNE 30, 2017, MARCH 31, 2017 AND JUNE 30, 2016 | |||||||||||||
(in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Three months ended, | |||||||||||||
Revenues | June 30, 2017 | March 31, 2017 | June 30, 2016 | ||||||||||
Drilling Products and Services | $ | 68,827 | $ | 68,431 | $ | 76,204 | |||||||
Onshore Completion and Workover Services | 249,079 | 204,979 | 115,893 | ||||||||||
Production Services | 88,606 | 68,605 | 84,972 | ||||||||||
Technical Solutions | 63,556 | 58,921 | 79,202 | ||||||||||
Total Revenues | $ | 470,068 | $ | 400,936 | $ | 356,271 | |||||||
Income (Loss) from Operations | |||||||||||||
Drilling Products and Services | $ | (14,940 | ) | $ | (13,167 | ) | $ | (69,696 | ) | ||||
Onshore Completion and Workover Services | (28,605 | ) | (63,241 | ) | (261,206 | ) | |||||||
Production Services | (20,252 | ) | (29,212 | ) | (248,631 | ) | |||||||
Technical Solutions | (2,764 | ) | (5,204 | ) | 2,102 | ||||||||
Total Income (Loss) from Operations | $ | (66,561 | ) | $ | (110,824 | ) | $ | (577,431 | ) | ||||
Adjusted Income (Loss) from Operations (1) | |||||||||||||
Drilling Products and Services | $ | (14,940 | ) | $ | (13,167 | ) | $ | (21,749 | ) | ||||
Onshore Completion and Workover Services | (28,605 | ) | (63,241 | ) | (68,209 | ) | |||||||
Production Services | (20,252 | ) | (29,212 | ) | (23,341 | ) | |||||||
Technical Solutions | (2,764 | ) | (5,204 | ) | 3,553 | ||||||||
Total Adjusted Income (Loss) from Operations | $ | (66,561 | ) | $ | (110,824 | ) | $ | (109,746 | ) | ||||
(1) Adjusted income (loss) from operations excludes the impact of reduction in value of assets and restructuring costs for the three months ended June 30, 2016. There were no adjustments for the three months ended June 30, 2017 and March 31, 2017. | |||||||||||||
Non-GAAP Financial Measures
The following table reconciles income (loss) from operations by segment, which is the directly comparable financial measure determined in accordance with Generally Accepted Accounting Principles (GAAP), to adjusted income (loss) from operations by segment (non-GAAP financial measure). Income (loss) from operations by segment excludes the impact of reduction in value of assets and restructuring costs. This financial measure is provided to enhance investors’ overall understanding of the Company’s current financial performance.
Reconciliation of As Reported Income (Loss) from Operations to Adjusted Income (Loss) From Operations | |||||||||||||||||||
Three months ended June 30, 2016 | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three months ended, June 30, 2016 | |||||||||||||||||||
Drilling Products and Services |
Onshore Completion and Workover Services |
Production Services |
Technical Solutions |
Consolidated | |||||||||||||||
Reported income (loss) from operations | $ | (69,696 | ) | $ | (261,206 | ) | $ | (248,631 | ) | $ | 2,102 | $ | (577,431 | ) | |||||
Reduction in value of assets | 47,659 | 188,741 | 223,883 | - | 460,283 | ||||||||||||||
Restructuring costs | 288 | 4,256 | 1,407 | 1,451 | 7,402 | ||||||||||||||
Adjusted income (loss) from operations | $ | (21,749 | ) | $ | (68,209 | ) | $ | (23,341 | ) | $ | 3,553 | $ | (109,746 | ) | |||||
FOR FURTHER INFORMATION CONTACT:Paul Vincent , VP of Investor Relations, (713) 654-2200