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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): October 17, 2005
SUPERIOR ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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0-20310
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75-2379388 |
(State or other jurisdiction)
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(Commission File Number)
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(IRS Employer Identification No.) |
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1105 Peters Road, Harvey, Louisiana
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70058 |
(Address of principal executive offices)
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(Zip Code) |
(504) 362-4321
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligations of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 7.01. Regulation FD Disclosure.
On October 17, 2005, Superior
Energy Services, Inc. (the
Company) issued a press release
announcing an update on
storm-related impact to the
Company, the establishment of a
response team to assist its
customers with recovery projects,
and its release date for third
quarter earnings. A copy of the
press release is attached hereto
as Exhibit 99.1 and incorporated
herein by reference. The
description of the press release
is qualified in its entirety by
reference to such Exhibit.
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.
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(c)
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Exhibits. |
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99.1
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Press release issued by Superior Energy Services, Inc., dated October 17, 2005. |
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.
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SUPERIOR ENERGY SERVICES, INC.
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By: |
/s/ Robert S. Taylor
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Robert S. Taylor |
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Dated: October 18, 2005 |
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Chief Financial Officer |
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Exhibit Index
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(c)
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Exhibits. |
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99.1
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Press release issued by Superior Energy Services, Inc., dated October 17, 2005. |
exv99w1
Exhibit 99.1
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FOR IMMEDIATE RELEASE
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FOR FURTHER INFORMATION CONTACT: |
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Terence Hall, CEO; Robert Taylor, CFO; |
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Greg Rosenstein, VP of Investor Relations, 337-714-4545 |
Superior Energy Services, Inc. Provides Company Update and
Announces Third Quarter Earnings Release Date and Conference Call Information
(Broussard, La., Monday, October 17, 2005) Superior Energy Services, Inc. (NYSE: SPN) announced
today a company update and the establishment of the Superior Response Team (SRT) as a result of
this extremely active hurricane season including the lingering impacts of Hurricanes Katrina and
Rita on the Gulf of Mexico energy industry.
Overview of Storm-Related Impact to Superior Energy Services
Although the company is still quantifying the impact from the hurricanes, some items are known:
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The company estimates that the opportunity cost (i.e. deferred revenue opportunity) from downtime related to the
hurricanes is in excess of $30 million in the third quarter, including about $14 million from deferred production
at SPN Resources. |
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During the third quarter, SPN Resources had more than 50 days of oil and gas production without any shut-ins. Over
that time, SPN Resources averaged 7,500 barrels of oil equivalent (boe) per day, including 13 days of production
above 8,000 boe. Production was about 2,200 boe per day following Hurricane Katrina, and all production was shut-in
on Thursday, September 22 in advance of Hurricane Rita. |
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With the exception of South Pass 60 and Ship Shoal 253, production is expected to return from all fields when third
party pipelines, processing plants and refineries accept production. On August 26, prior to shutting in production
in advance of Hurricane Katrina, production was approximately 3,600 boe at South Pass 60 and approximately 1,000
boe at Ship Shoal 253. |
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Above water assessments of all SPN Resources platforms have been completed and only one platform a
non-producing platform at Ship Shoal 253 field incurred major structural damage. The company expects repairs to
other damaged platforms to be completed during the fourth quarter. |
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Total costs net of insurance proceeds for SPN Resources property repairs resulting from Hurricanes Katrina and
Rita are currently estimated at between $6 million and $7 million. These estimates include under water platform
and pipeline inspections. |
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Repairs from Hurricane Katrina damage are well underway at South Pass 60 and repairs necessary to produce at West
Delta 79/86 are complete. Repairs for Hurricane Rita damage are starting. |
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The company expects higher costs of services and general and administrative costs in the third and fourth quarters
due in part to equipment and employee relocation costs, storm-related losses in excess of insurance coverage, and
equipment and facility repair costs. For instance, the company provided about $2 million in relief aid for the more
than 550 employees impacted by Hurricanes Katrina and Rita. |
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Hurricane Rita caused flooding and damage to several of the companys facilities along the Louisiana coast,
including facilities in Cameron, Fourchon, Intracoastal City, Venice and at the Port of Iberia. |
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Liftboat damage was minimal and all available liftboats are currently working. |
Current Activity Levels
The company believes restoring the Gulf of Mexico energy industry to pre-hurricane status will
require multiple phases, including damage assessment; platform recovery, salvage and abandonment,
as needed; well recovery and abandonment; production restoration; and the resumption of drilling
activity. The company believes it is well positioned to participate in all phases of oil and gas
restoration work in the Gulf of Mexico.
Superior has several assets which are currently participating in the first phase of post-hurricane
recovery work, including the companys liftboats, on-site accommodations, well control, hydraulic
workover and engineering services. All of the aforementioned services are operating at or near
capacity. In the case of liftboats, all available liftboats are currently utilized and most are
earning dayrates above 2001 peak levels. Collectively, the companys fleet of 26 liftboats is
generating daily revenue in excess of $310,000, which exceeds the prior daily revenue peak
established in 2001 when the company owned 39 liftboats.
Once the industry moves to the next phase of recovery, which will involve restoring production to
existing wells and plugging permanently damaged wells, the company anticipates its
production-related and plug and abandonment services will experience similar activity levels to
those assets participating in the first phase, which should yield significantly high equipment and
crew utilizations.
Hurricane-related work would be incremental to the resumption of strong, pre-storm demand for
rental tools and production-related services the company was already experiencing earlier in the
third quarter.
Superior Establishes Superior Response Team
The Company has established the Superior Response Team (SRT) to better assist customers with
their large-scale recovery projects. The SRT formalizes Superiors project management and
engineering capabilities, and was borne out Superiors experience managing two large-scale salvage
and recovery projects that resulted from Hurricane Ivan.
Hurricanes Katrina and Rita inflicted significant damage to multiple offshore platforms and
facilities. The SRT intends to identify project management opportunities and develop an integrated
management process to address customers platform and well issues. The team will present
Superiors customers with a diversified set of production-related and abandonment services that are
focused on storm-related platform, well recovery or salvage work due to storm damage. These
services will include all Superior services that may be required to facilitate work, and will be
managed by a joint team of specialists across multiple product and service disciplines within
Superior.
CEO Terry Hall comments:
While these unprecedented hurricanes have impacted short-term results, we believe our long-term
earnings power is strengthened as we expect to be at the forefront of helping repair and revive oil
and gas activity throughout the Gulf of Mexico. We are fully participating in the initial recovery
phase, and expect similar performance from our various assets as our customers move from damage
assessment, to repair, production restoration and ultimately drilling. We expect all production
from SPN Resources to resume prior to year-end. While this is occurring, we intend to continue to
grow our domestic land and international offshore rental businesses and actively pursue mature oil
and gas property acquisition opportunities that may arise as energy producers reassess the benefits
and risks of owning and operating mature properties.
Third Quarter Conference Call Information
The Company will hold a conference call on Thursday, November 3 at 10 a.m. Central time (11 a.m.
Eastern time) to discuss the third quarter results, including the impact of weather during the
period.
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What:
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Superior Energy Services Third Quarter 2005 Conference Call
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When:
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Thursday, November 3 at 10 a.m. Central Time (11 a.m. Eastern Time)
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Webcast:
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www.superiorenergy.com
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Dial-in:
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800-763-5557 |
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Replay:
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800-642-1687 (available 2 hours after call and ending November 10, 2005)
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Replay Passcode:
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1567588 |
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Superior Energy Services, Inc. is a leading provider of specialized oilfield services and equipment
focused on serving the production-related needs of oil and gas companies primarily in the Gulf of
Mexico and the drilling-related needs of oil and gas companies in the Gulf of Mexico and select
international market areas. The company uses its production-related assets to enhance, maintain
and extend production and, at the end of an offshore propertys economic life, plug and
decommission wells. Superior also owns and operates mature oil and gas properties in the Gulf of
Mexico.
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 Companys rapid growth; changes in competitive
factors and other material factors that are described from time to time in the Companys 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.
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