Superior Energy Services Announces Second Quarter 2016 Results
The Company reported a pre-tax expense of
"Oil and gas drilling and completion activity slowed during the second quarter and as a result Superior Energy's second quarter operational and financial results declined as well," commented
"We believe we have taken major strides towards optimizing our cost structure and have ensured that we have significant operating capacity to meet any increase in market demand. Our focus in the coming quarters is to maximize our opportunities to expand revenues and margins as drilling and completion activity grows."
Second Quarter 2016 Geographic Breakdown
U.S. land revenue was
Drilling Products and Services Segment
The Drilling Products and Services segment revenue in the second quarter of 2016 was
U.S. land revenue decreased 41% sequentially to
Onshore Completion and Workover Services Segment
The Onshore Completion and Workover Services segment revenue in the second quarter of 2016 was
Production Services Segment
The Production Services segment revenue in the second quarter of 2016 was
U.S. land revenue decreased 26% sequentially to
Technical Solutions Segment
The Technical Solutions segment revenue in the second quarter of 2016 was
U.S. land revenue decreased 11% 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 regarding 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 properties; risks inherent in acquiring businesses; risks associated with cyber-attacks; risks associated with business growth during an industry recovery outpacing the capabilities of our infrastructure and workforce; political, legal, economic and other risks and uncertainties associated with our international operations; potential changes in tax laws, adverse positions taken by tax authorities or tax audits impacting our operating results; risks associated with our outstanding debt obligations and the potential effect of limiting our future growth and operations; our continued access to credit markets on favorable terms; and the impact that unfavorable or unusual weather conditions could have on our operations. These risks and other uncertainties related to our business are described in our periodic reports filed with the
FOR FURTHER INFORMATION CONTACT:
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
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Consolidated Statements of Operations |
||||||||
Three and Six Months Ended June 30, 2016 and 2015 |
||||||||
(in thousands, except earnings per share amounts) |
||||||||
(unaudited) |
||||||||
Three Months Ended |
Six Months Ended |
|||||||
June 30, |
June 30, |
|||||||
2016 |
2015 |
2016 |
2015 |
|||||
Revenues |
$ 356,271 |
$ 710,784 |
$ 769,404 |
$ 1,628,019 |
||||
Cost of services and rentals (exclusive of items shown separately below) |
258,635 |
465,533 |
543,974 |
1,047,779 |
||||
Depreciation, depletion, amortization and accretion |
132,037 |
158,352 |
268,709 |
320,572 |
||||
General and administrative expenses |
82,747 |
129,661 |
183,724 |
280,623 |
||||
Reduction in value of assets |
460,283 |
807,637 |
462,461 |
807,637 |
||||
Loss from operations |
(577,431) |
(850,399) |
(689,464) |
(828,592) |
||||
Other income (expense): |
||||||||
Interest expense, net |
(22,748) |
(25,382) |
(46,554) |
(48,591) |
||||
Other income (expense) |
10,681 |
(6,524) |
18,436 |
(7,495) |
||||
Loss from continuing operations before income taxes |
(589,498) |
(882,305) |
(717,582) |
(884,678) |
||||
Income taxes |
(120,866) |
(107,173) |
(164,414) |
(108,051) |
||||
Net loss from continuing operations |
(468,632) |
(775,132) |
(553,168) |
(776,627) |
||||
Loss from discontinued operations, net of income tax |
(2,225) |
(9,857) |
(4,492) |
(19,497) |
||||
Net loss |
$ (470,857) |
$ (784,989) |
$ (557,660) |
$ (796,124) |
||||
Loss per share information: |
||||||||
Basic and Diluted |
||||||||
Net loss from continuing operations |
$ (3.09) |
$ (5.15) |
$ (3.66) |
$ (5.17) |
||||
Loss from discontinued operations |
(0.02) |
(0.07) |
(0.03) |
(0.13) |
||||
Net loss |
$ (3.11) |
$ (5.22) |
$ (3.69) |
$ (5.30) |
||||
Weighted average common shares used in computing earnings per share: |
||||||||
Basic and diluted |
151,456 |
150,485 |
151,124 |
150,196 |
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
||||
June 30, 2016 and December 31, 2015 |
||||
(in thousands) |
||||
6/30/2016 |
12/31/2015 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 485,847 |
$ 564,017 |
||
Accounts receivable, net |
306,484 |
428,514 |
||
Prepaid expenses |
42,706 |
42,298 |
||
Inventory and other current assets |
151,917 |
165,062 |
||
Assets held for sale |
66,637 |
95,234 |
||
Total current assets |
1,053,591 |
1,295,125 |
||
Property, plant and equipment, net |
1,869,204 |
2,123,291 |
||
Goodwill |
806,779 |
1,140,101 |
||
Notes receivable |
54,181 |
52,382 |
||
Intangible and other long-term assets, net |
231,505 |
303,345 |
||
Total assets |
$ 4,015,260 |
$ 4,914,244 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Accounts payable |
$ 67,097 |
$ 114,475 |
||
Accrued expenses |
224,487 |
271,246 |
||
Income taxes payable |
2,768 |
9,185 |
||
Current portion of decommissioning liabilities |
22,654 |
19,052 |
||
Current maturities of long-term debt |
728 |
29,957 |
||
Liabilities held for sale |
2,730 |
4,661 |
||
Total current liabilities |
320,464 |
448,576 |
||
Deferred income taxes |
250,649 |
383,069 |
||
Decommissioning liabilities |
96,381 |
98,890 |
||
Long-term debt, net |
1,533,060 |
1,588,263 |
||
Other long-term liabilities |
185,522 |
184,634 |
||
Total stockholders' equity |
1,629,184 |
2,210,812 |
||
Total liabilities and stockholders' equity |
$ 4,015,260 |
$ 4,914,244 |
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
||||||||
SEGMENT HIGHLIGHTS |
||||||||
THREE MONTHS ENDED JUNE 30, 2016, MARCH 31, 2016 AND JUNE 30, 2015 |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
Three months ended, |
||||||||
Revenue |
June 30, 2016 |
March 31, 2016 |
June 30, 2015 |
|||||
Drilling Products and Services |
$ 80,633 |
$ 96,570 |
$ 146,376 |
|||||
Onshore Completion and Workover Services |
115,893 |
132,472 |
226,459 |
|||||
Production Services |
80,543 |
96,746 |
208,669 |
|||||
Technical Solutions |
79,202 |
87,345 |
129,280 |
|||||
Total Revenues |
$ 356,271 |
$ 413,133 |
$ 710,784 |
|||||
Income (Loss) from Operations |
June 30, 2016 |
March 31, 2016 |
June 30, 2015 |
|||||
Drilling Products and Services |
$ (71,275) |
$ (16,295) |
$ 3,299 |
|||||
Onshore Completion and Workover Services |
(261,206) |
(70,535) |
(84,294) |
|||||
Production Services |
(247,052) |
(25,144) |
(771,679) |
|||||
Technical Solutions |
2,102 |
(59) |
2,275 |
|||||
Total Income (Loss) from Operations |
$ (577,431) |
$ (112,033) |
$ (850,399) |
|||||
Adjusted Income (Loss) from Operations (1) |
June 30, 2016 |
March 31, 2016 |
June 30, 2015 |
|||||
Drilling Products and Services |
$ (23,214) |
$ (14,817) |
$ 19,096 |
|||||
Onshore Completion and Workover Services |
(68,209) |
(65,691) |
(44,031) |
|||||
Production Services |
(21,876) |
(18,033) |
(20,102) |
|||||
Technical Solutions |
3,553 |
1,808 |
2,275 |
|||||
Total Adjusted Income (Loss) from Operations |
$ (109,746) |
$ (96,733) |
$ (42,762) |
|||||
(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, March 31, 2016 and June 30, 2015. |
Non-GAAP Financial Measures
The following tables reconcile consolidated net loss from continuing operations and income (loss) from operations by segment, which are the directly comparable financial results determined in accordance with Generally Accepted Accounting Principles (GAAP), to consolidated adjusted loss from continuing operations and adjusted income (loss) from operations by segment (non-GAAP financial measures). Consolidated adjusted loss from continuing operations and income (loss) from operations by segment exclude the impact of reduction in value of assets and restructuring costs. These financial measures are provided to enhance investors' overall understanding of the Company's current financial performance.
Reconciliation of As Reported Net Loss from Continuing Operations to Adjusted Net Loss From Continuing Operations |
||||||||||||
For the three months ended June 30, 2016, March 31, 2016 and June 30, 2015 |
||||||||||||
(in thousands) |
||||||||||||
(unaudited) |
||||||||||||
Three months ended, |
||||||||||||
June 30, 2016 |
March 31, 2016 |
June 30, 2015 |
||||||||||
Consolidated |
Per Share |
Consolidated |
Per Share |
Consolidated |
Per Share |
|||||||
Reported net loss from continuing operations |
$ (468,632) |
$ (3.09) |
$ (84,536) |
$ (0.56) |
$ (775,132) |
$ (5.15) |
||||||
Reduction in value of assets and other items |
467,685 |
3.09 |
15,300 |
0.10 |
807,637 |
5.37 |
||||||
Income taxes |
(79,450) |
(0.53) |
(5,201) |
(0.03) |
(79,882) |
(0.53) |
||||||
Adjusted net loss from continuing operations |
$ (80,397) |
$ (0.53) |
$ (74,437) |
$ (0.49) |
$ (47,377) |
$ (0.31) |
Reconciliation of As Reported Income (Loss) from Operations to Adjusted Income (Loss) From Operations |
||||||||||
For the three months ended June 30, 2016, March 31, 2016 and June 30, 2015 |
||||||||||
(in thousands) |
||||||||||
(unaudited) |
||||||||||
Three months ended, June 30, 2016 |
||||||||||
Drilling |
Onshore |
Production |
|
Consolidated |
||||||
Reported income (loss) from operations |
$ (71,275) |
$ (261,206) |
$ (247,052) |
$ 2,102 |
$ (577,431) |
|||||
Reduction in value of assets |
47,659 |
188,741 |
223,883 |
- |
460,283 |
|||||
Restructuring costs |
402 |
4,256 |
1,293 |
1,451 |
7,402 |
|||||
Adjusted income (loss) from operations |
$ (23,214) |
$ (68,209) |
$ (21,876) |
$ 3,553 |
$ (109,746) |
|||||
Three months ended, March 31, 2016 |
||||||||||
Drilling |
Onshore |
Production |
|
Consolidated |
||||||
Reported loss from operations |
$ (16,295) |
$ (70,535) |
$ (25,144) |
$ (59) |
$ (112,033) |
|||||
Restructuring costs |
1,478 |
4,844 |
7,111 |
1,867 |
15,300 |
|||||
Adjusted income (loss) from operations |
$ (14,817) |
$ (65,691) |
$ (18,033) |
$ 1,808 |
$ (96,733) |
|||||
Three months ended, June 30, 2015 |
||||||||||
Drilling |
Onshore |
Production |
|
Consolidated |
||||||
Reported income (loss) from operations |
$ 3,299 |
$ (84,294) |
$ (771,679) |
$ 2,275 |
$ (850,399) |
|||||
Reduction in value of assets |
15,797 |
40,263 |
751,577 |
- |
807,637 |
|||||
Adjusted income (loss) from operations |
$ 19,096 |
$ (44,031) |
$ (20,102) |
$ 2,275 |
$ (42,762) |
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