UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

Date of Report (Date of earliest event reported):   November 3, 2004

 

 

SUPERIOR ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware (State or other jurisdiction)

0-20310 (Commission File Number)

75-2379388 (IRS Employer Identification No.)

 

 

1105 Peters Road, Harvey, Louisiana (Address of principal executive offices)

70058 (Zip Code)

 

 

 

(504) 362-4321

(Registrant's telephone number, including area code)

 

Item 2.02.

Results of Operations and Financial Condition.

On November 3, 2004, Superior Energy Services, Inc. issued a press release announcing its earnings for the third quarter ended September 30, 2004. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. In accordance with General Instruction B.2. of Form 8-K, the information presented herein shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 9.01.

Financial Statements and Exhibits.

 

	(c)	Exhibits.
		99.1	Press release issued by Superior Energy Services, Inc., dated November 3, 2004.

 

SIGNATURES

            Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	SUPERIOR ENERGY SERVICES, INC.
	By:	/s/ Robert S. Taylor
		Robert S. Taylor
		Chief Financial Officer

 

Dated:    November 3, 2004

		EXHIBIT  99.1
		1105 Peters Road  Harvey, Louisiana 70058 (504) 362-4321 Fax  (504) 362-4966 NYSE: SPN

FOR IMMEDIATE RELEASE	FOR FURTHER INFORMATION CONTACT: Terence Hall, CEO; Robert Taylor, CFO; Greg Rosenstein, VP of Investor Relations, 504-362-4321

 

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 September 30,						Nine Months Ended 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 (Unaudited)			12/31/2003 (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, 2004			June 30, 2004			September 30, 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, 2004			June 30, 2004			September 30, 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