Superior Energy Services, Inc. Announces Second Quarter 2004 Results
HARVEY, La.--(BUSINESS WIRE)--Aug. 2, 2004--Superior Energy Services, Inc. (NYSE:SPN) today announced results for the second quarter ended June 30, 2004. For the quarter, revenues were $137.5 million resulting in net income of $8.7 million or $0.12 diluted earnings per share, as compared to revenues of $128.9 million and net income of $8.3 million or $0.11 diluted earnings per share for the second quarter of 2003.
For the six months ended June 30, 2004, revenues were $254.0 million and net income was $12.3 million or $0.16 diluted earnings per share, as compared to revenues of $252.0 million and net income of $15.8 million or $0.21 diluted earnings per share for the six months ended June 30, 2003.
President and CEO Terry Hall Comments
President and CEO Terry Hall commented, "We experienced improvements from first quarter activity levels in all segments of our business due to seasonal increases in the Gulf of Mexico, which started in mid May and strengthened for the remainder of the quarter. Sequentially, the biggest improvement came from our marine segment, where liftboat utilization was at its highest level since the fourth quarter of 2002. This is attributable to increased demand for production-related and construction support projects, as well as working several liftboats on longer term projects. Most of our well intervention services experienced strong increases as compared to the first quarter, and our rental tools segment once again established a quarterly record for revenues."
Well Intervention Group Segment
Second quarter revenues for the Well Intervention Group were $53.2 million, a 15% increase from the second quarter of 2003 and a 20% increase from the first quarter of 2004. Activity was driven mainly by demand from our traditional customer base. On a sequential basis, activity increased for most production-related services, led by sharp increases in coiled tubing, pumping and stimulation, plugging and abandonment services and hydraulic workover services. In addition to a general increase in demand, the increases in coiled tubing and pumping and stimulation activity were due in part to the completion of a CoilTac project and work on high pressure wells, and the increase in hydraulic workover services was due in part to additional workover projects in Trinidad. As expected, revenue and earnings contributions derived from SPN Resource's oil and gas production were not significant during the second quarter. The company expects SPN Resources' contribution to grow significantly from present levels in the third quarter as a result of the closing the previously announced South Pass 60 Field transaction.
Rental Tools Segment
Revenues for the Rental Tools segment were a record $43.8 million, 20% higher than the second quarter of 2003 and 13% higher than the first quarter of 2004. Sequentially, the key drivers of the quarter were incremental rentals of stabilizers, hole openers and drill pipe internationally and in the deepwater Gulf of Mexico market, and increased rentals of production-related tools in the shallow water Gulf of Mexico.
Marine Segment
Second quarter revenues for the Marine segment were $17.7 million, a 4% decrease as compared to the second quarter of 2003 and a 30% increase as compared to the first quarter of 2004.
Average fleet utilization was 76% and average day rate was $5,733. As compared to the second quarter of 2003, the fleet's average utilization was 10% higher, but the average day rate was 11% lower as market conditions were weaker entering the second quarter of this year as compared to last year. However, dayrates began to improve late in the quarter.
As compared to the first quarter of 2004, utilization was 12% higher and the average day rate was up slightly. One of the company's 245-foot class liftboats was unavailable most of the quarter due to leg repairs, which contributed to the lower utilization and day rates for the 230 foot - 245 foot class liftboats, as well as higher repairs and maintenance expenses as compared to prior quarters.
Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended June 30, 2004
($ actual)
Class Liftboats Average Dayrate Utilization
------------------- ---------------- ----------------- ---------------
105' 6 $ 2,786 72.5%
120-135' 8 3,193 79.5%
145-155' 11 4,789 75.6%
160'-175' 6 6,142 75.8%
200' 2 9,161 95.6%
230'-245' 3 12,014 64.1%
250' 2 16,501 75.8%
Other Oilfield Services Segment
Revenues in this segment were $22.9 million, a 17% decrease as compared to the second quarter of 2003 due mainly from the sale of construction-related assets that took place in the third quarter of 2003. As compared to the first quarter of 2004, revenues increased 15%. Additional demand for the treatment of non-hazardous oilfield waste and strong sales of computerized torque equipment contributed to the positive change from first quarter levels.
The Company will host a conference call at 10:30 a.m. Central Time on Tuesday, August 3. The call can be accessed from Superior's website at www.superiorenergy.com, or by telephone at 800-763-5557. The replay telephone number is 800-642-1687 and the replay passcode is 8772025. The replay is available beginning two hours after the call and ending August 10, 2004.
Superior Energy Services, Inc. provides a broad range of specialized oilfield services and equipment primarily to major and independent oil and gas companies engaged in the exploration, production and development of oil and natural gas properties offshore in the Gulf of Mexico and throughout the Gulf Coast region. These services and equipment include the rental of liftboats, rental of specialized oilfield equipment, electric and mechanical wireline services, well plug and abandonment services, well control, coiled tubing services and engineering services. Additional services provided include contract operating and supplemental labor, offshore construction and maintenance services, offshore and dockside environmental cleaning services, the manufacture and sale of drilling instrumentation and the manufacture and sale of oil spill containment equipment.
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; changes in competitive factors affecting the Company's operations; risks associated with the acquisition of mature oil and gas properties, including estimated of recoverable reserves, future oil and gas prices and potential environmental and plugging and abandonment liabilities 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, 2004 and 2003
(in thousands, except earnings per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2004 2003 2004 2003
--------- -------- --------- --------
Revenues $137,545 $128,857 $254,004 $252,052
-------- -------- -------- --------
Costs and expenses:
Cost of services 77,144 74,291 143,849 144,448
Depreciation, depletion,
amortization and accretion 15,877 12,072 30,651 23,827
General and administrative 25,796 23,689 49,988 47,378
-------- -------- -------- --------
Total costs and expenses 118,817 110,052 224,488 215,653
-------- -------- -------- --------
Income from operations 18,728 18,805 29,516 36,399
Other income (expense):
Interest expense (5,523) (5,571) (11,073) (11,174)
Interest income 457 4 898 92
Equity in income of
affiliates 281 305 304 432
-------- -------- -------- --------
Income before income taxes 13,943 13,543 19,645 25,749
Income taxes 5,229 5,215 7,367 9,914
-------- -------- -------- --------
Net income $ 8,714 $ 8,328 $ 12,278 $ 15,835
======== ======== ======== ========
Basic earnings per share $ 0.12 $ 0.11 $ 0.17 $ 0.21
======== ======== ======== ========
Diluted earnings per share $ 0.12 $ 0.11 $ 0.16 $ 0.21
======== ======== ======== ========
Weighted average common shares
used in computing earnings
per share:
Basic 74,471 73,936 74,342 73,882
======== ======== ======== ========
Diluted 75,198 75,124 75,065 74,842
======== ======== ======== ========
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2004 AND DECEMBER 31, 2003
(in thousands)
6/30/2004 12/31/2003
(Unaudited) (Audited)
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 15,482 $ 19,794
Accounts receivable - net 121,103 112,775
Notes receivable 14,320 19,212
Prepaid insurance and other 19,165 14,059
---------- -----------
Total current assets 170,070 165,840
Property, plant and equipment - net 431,914 427,360
Goodwill - net 224,472 204,727
Notes receivable 26,066 15,145
Investments in affiliates 13,528 13,224
Other assets - net 6,662 6,567
---------- -----------
Total assets $ 872,712 $ 832,863
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,489 $ 20,817
Accrued expenses 62,177 48,949
Income taxes payable 541 138
Current portion of decommissioning
liabilities 16,292 20,097
Current maturities of long-term debt 11,810 14,210
---------- -----------
Total current liabilities 110,309 104,211
---------- -----------
Deferred income taxes 92,503 86,251
Decommissioning liabilities 32,785 18,756
Long-term debt 250,811 255,516
Total stockholders' equity 386,304 368,129
---------- -----------
Total liabilities and stockholders'
equity $ 872,712 $ 832,863
========== ===========
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended June 30, 2004 and 2003, and March 31, 2004
(Unaudited)
(in thousands)
Revenue June 2004 June 2003 March 2004
----------- ----------- ------------
Well Intervention Group $ 53,153 $ 46,416 $ 44,258
Marine 17,692 18,487 13,611
Rental Tools 43,831 36,396 38,732
Other Oilfield Services 22,869 27,558 19,858
---------- ---------- -----------
Total $ 137,545 $ 128,857 $ 116,459
Gross Profit (1)
Well Intervention Group $ 20,784 $ 18,087 $ 18,924
Marine 5,032 5,820 1,982
Rental Tools 29,675 25,014 26,119
Other Oilfield Services 4,910 5,645 2,729
---------- ---------- -----------
Total $ 60,401 $ 54,566 $ 49,754
(1) Gross profit is calculated by subtracting cost of services from
revenue for each of the Company's four segments.
CONTACT: Superior Energy Services Inc., Harvey
Terence Hall/Robert Taylor/Greg Rosenstein, 504-362-4321
SOURCE: Superior Energy Services, Inc.
