Superior Energy Services, Inc. Announces Third Quarter 2004 Results
HARVEY, La.--(BUSINESS WIRE)--Nov. 3, 2004--Superior Energy Services, Inc. (NYSE:SPN) today announced results for the third quarter ended September 30, 2004. For the quarter, revenues were $152.5 million resulting in net income of $11.3 million or $0.15 diluted earnings per share, as compared to revenues of $128.3 million and net income of $8.8 million or $0.12 diluted earnings per share for the third quarter of 2003.
For the nine months ended September 30, 2004, revenues were $406.5 million and net income was $23.6 million or $0.31 diluted earnings per share, as compared to revenues of $380.4 million and net income of $24.7 million or $0.33 diluted earnings per share for the nine months ended September 30, 2003.
CEO Terry Hall Comments
CEO Terry Hall commented, "The third quarter was strong for most services, rental tools and liftboats prior to the impact of Hurricane Ivan in mid-September. July and August were our best months of the year for our well intervention group and liftboats. Liftboat dayrates increased on average almost 16 percent from the second quarter of 2004 and demand was high for most well intervention services. Our rental tools segment continued to benefit from expansion internationally and in land markets.
"To date, the industry has focused most of its storm-related repair efforts on deepwater properties and pipelines. Although we cannot predict the extent of damage to shallow-water infrastructure, or the timing of when shallow-water work will be performed, we are well positioned to assist our customers in their repair and maintenance efforts once their assessments are complete.
"Post-storm repair work on our production facilities in South Pass 60 continues. We expect production to return to pre-storm levels in the fourth quarter once repairs are complete. Infield and transportation pipelines were successfully pressure-tested. We will perform workovers and other well intervention work to further enhance production from areas outside of South Pass 60. This work will begin in the fourth quarter as we approach the industry's traditional off-season, a period of reduced activity for our traditional customer base that typically begins in mid-November and ends during the first quarter. It is possible that the seasonal decline may not be as severe as past years due to potential storm-related work. In addition, current activity remains quite strong for well intervention services and liftboats."
Well Intervention Group Segment
Third quarter revenues for the Well Intervention Group were $59.9 million, a 19 percent increase from the third quarter of 2003 and a 23 percent increase from the second quarter of 2004. Plug and abandonment, electric line and coiled tubing activity increased sequentially and over third quarter levels a year ago due to rising demand for production-related services in the shallow water Gulf of Mexico. In addition, coiled tubing benefited from high pressure well work in Texas and Louisiana. Also, the company's well control crews began working on a well control project in Egypt during the third quarter that is expected to continue through the fourth quarter.
Rental Tools Segment
Revenues for the Rental Tools segment were $42.5 million, 20 percent higher than the third quarter of 2003 and 3 percent lower than the second quarter of 2004. Rental activity was lower sequentially as a result of storm-related downtime in the deepwater Gulf of Mexico, reducing rentals of drill pipe and stabilizers. This was partially offset by increased rentals of stabilizers, on-site accommodations and other tools domestically in Louisiana, Texas and Oklahoma.
Marine Segment
Superior's marine revenues were $18.0 million, a 5 percent increase as compared to the third quarter of 2003 and a 2 percent increase as compared to the second quarter of 2004. Average fleet utilization was 69 percent as compared to 66 percent for the third quarter of 2003 and 76 percent for the second quarter of 2004. Utilization was 74 percent prior to Hurricane Ivan. The average dayrate for the quarter was $6,622, a 6 percent increase over the third quarter of 2003 and a 16 percent increase over the second quarter of 2004.
Sequential improvement was driven largely by improved dayrates and utilization across most fleets, especially for the Company's five largest liftboats.
Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended September 30, 2004
($ actual)
Class Liftboats Average Dayrate Utilization
105' 6 $ 2,932 74.1%
120-135' 8 3,537 74.9%
145-155' 11 5,301 49.9%
160'-175' 6 6,711 78.3%
200' 2 9,213 68.5%
230'-245' 3 13,599 90.2%
250' 2 18,069 84.2%
Oil and Gas Segment
As a result of acquisitions and increasing production through the Company's subsidiary SPN Resources, oil and gas production is disclosed as a separate segment beginning with the third quarter 2004 results. Previously, oil and gas production was reported in the well intervention segment. Revenues from this segment were $14.2 million in the third quarter of 2004 and $6.7 million in the second quarter of 2004. Third quarter production from SPN Resources was 335,890 barrels of oil equivalent, net (boe) as compared to 161,599 boe in the second quarter of 2004. The Company did not have any production in the third quarter of 2003.
Other Oilfield Services Segment
Revenues in this segment were $20.4 million, a 20 percent decrease as compared to the third quarter of 2003 and an 11 percent decrease as compared to the second quarter of 2004. Lower revenue is attributable to storm-related activity declines, especially a decline in drilling-related environmental services such as rig cleaning and non-hazardous oilfield waste treatment.
The Company will host a conference call at 11 a.m. Central Time today. 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 1694232. The replay is available beginning two hours after the call and ending November 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; 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 Nine Months Ended September 30, 2004 and 2003
(in thousands, except earnings per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Revenues $152,500 $128,316 $406,504 $380,368
--------- --------- --------- ---------
Costs and expenses:
Cost of services 82,411 75,449 226,260 219,897
Depreciation, depletion,
amortization and accretion 17,795 12,174 48,446 36,001
General and administrative 29,637 24,195 79,625 71,573
--------- --------- --------- ---------
Total costs and expenses 129,843 111,818 354,331 327,471
--------- --------- --------- ---------
Income from operations 22,657 16,498 52,173 52,897
Other income (expense):
Interest expense (5,651) (5,629) (16,724) (16,804)
Interest income 467 18 1,365 111
Other income - 2,762 - 2,762
Equity in income of
affiliates 588 60 892 492
--------- --------- --------- ---------
Income before income taxes 18,061 13,709 37,706 39,458
Income taxes 6,773 4,883 14,140 14,797
--------- --------- --------- ---------
Net income $11,288 $8,826 $23,566 $24,661
========= ========= ========= =========
Basic earnings per share $0.15 $0.12 $0.32 $0.33
========= ========= ========= =========
Diluted earnings per share $0.15 $0.12 $0.31 $0.33
========= ========= ========= =========
Weighted average common shares
used in computing earnings
per share:
Basic 74,717 74,035 74,469 73,933
========= ========= ========= =========
Diluted 75,686 75,169 75,212 74,952
========= ========= ========= =========
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
(in thousands)
9/30/2004 12/31/2003
(Unaudited) (Audited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 10,964 $ 19,794
Accounts receivable - net 135,302 112,775
Income taxes receivable 609 -
Notes receivable 8,873 19,212
Prepaid insurance and other 18,948 14,059
----------- -----------
Total current assets 174,696 165,840
Property, plant and equipment - net 488,932 427,360
Goodwill - net 224,275 204,727
Notes receivable 29,504 15,145
Investments in affiliates 14,116 13,224
Other assets - net 6,745 6,567
----------- -----------
Total assets $938,268 $832,863
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $29,597 $20,817
Accrued expenses 61,223 48,949
Income taxes payable - 138
Fair value of commodity derivative
instruments 4,687 -
Current portion of decommissioning
liabilities 10,766 20,097
Current maturities of long-term debt 11,810 14,210
----------- -----------
Total current liabilities 118,083 104,211
----------- -----------
Deferred income taxes 95,678 86,251
Decommissioning liabilities 76,842 18,756
Long-term debt 248,061 255,516
Other 1,000 -
Total stockholders' equity 398,604 368,129
----------- -----------
Total liabilities and stockholders'
equity $938,268 $832,863
=========== ===========
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended September 30, 2004,
June 30, 2004 and September 30, 2003
(Unaudited)
(in thousands)
Three months ended,
---------------------------------------
Revenue September 30, June 30, September 30,
2004 2004 2003
------------- ----------- -------------
Well Intervention $59,861 $48,549 $50,264
Rental tools 42,530 43,831 35,351
Marine 18,049 17,692 17,260
Other Oilfield Services 20,354 22,869 25,441
Oil and Gas 14,190 6,653 -
Less: Oil and Gas
Eliminations (2) (2,484) (2,049) -
------------- ----------- -------------
Total Revenues $152,500 $137,545 $128,316
============= =========== =============
Three months ended,
---------------------------------------
Gross Profit (1) September 30, June 30, September 30,
2004 2004 2003
------------- ----------- -------------
Well Intervention $25,519 $18,419 $20,453
Rental tools 27,186 29,675 23,842
Marine 5,856 5,032 4,817
Other Oilfield Services 3,878 4,910 3,755
Oil and Gas 7,650 2,365 -
------------- ----------- -------------
Total Gross Profit $70,089 $60,401 $52,867
============= =========== =============
CONTACT: Superior Energy Services, Inc.
Terence Hall, Robert Taylor, or Greg Rosenstein
504-362-432
SOURCE: Superior Energy Services, Inc.
