e8vk
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 28, 2009
SUPERIOR ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction)
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001-34037
(Commission File Number)
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75-2379388
(IRS Employer Identification No.) |
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601 Poydras St., Suite 2400, New Orleans, Louisiana
(Address of principal executive offices)
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70130
(Zip Code) |
(504) 587-7374
(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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 |
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Results of Operations and Financial Condition. |
On October 28, 2009, Superior Energy Services, Inc. issued a press release announcing its
earnings for the third quarter ended September 30, 2009. 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 in this Item 2.02 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.
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Item 9.01 |
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Financial Statements and Exhibits. |
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Exhibit |
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Number |
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Description |
99.1
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Press release issued by Superior Energy Services, Inc.,
dated October 28, 2009. |
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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Chief Financial Officer |
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Dated: October 29, 2009
exv99w1
EXHIBIT 99.1
601 Poydras St., Suite 2400
New Orleans, LA 70130
NYSE: SPN
(504) 587-7374
Fax: (504) 362-1818
FOR FURTHER INFORMATION CONTACT:
Terence Hall, CEO; Robert Taylor, CFO;
Greg Rosenstein, VP of Investor Relations, (504) 587-7374
Superior Energy Services, Inc. Reports Third Quarter 2009 Results
Core Earnings of $0.36 Per Diluted Share Before Non-Cash Charges
New Orleans, LA October 28, 2009 Superior Energy Services, Inc. (NYSE: SPN) today announced net
income of $24.4 million, or $0.31 per diluted share on revenue of $386.5 million for the third
quarter of 2009. Net income for the third quarter of 2008 was $97.3 million, or $1.19 per diluted
share on revenue of $490.3 million.
Excluding non-cash, pre-tax charges of $6.2 million related to its equity-method investments, the
Company had adjusted net income of $28.4 million, or $0.36 per diluted share, for the third quarter
of 2009, compared with adjusted net income of $85.0 million, or $1.04 per diluted share, for the
third quarter of 2008. The third quarter 2009 charges to the Companys equity-method investments
include unrealized losses from hedging contracts and other non-cash items.
Operational factors impacting the third quarter include the following:
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Total revenue decreased 21% as compared with the third quarter of 2008 (year-over-year)
and increased 7% as compared with the second quarter of 2009 (sequential). The sequential
change was primarily due to increased demand for production-related services and rental tools
in international markets, and increased demand for well intervention services and liftboats in
the Gulf of Mexico. |
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Well Intervention Segment revenue of $254.3 million decreased 20% year-over-year and
increased 10% sequentially. Rental Tools Segment revenue was $100.8 million, a 26% decrease
year-over-year and a 2% decrease sequentially. Marine Segment revenue of $31.3 million
decreased 8% year-over-year and increased 14% sequentially. |
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Gulf of Mexico revenue was approximately $222.9 million, or 3% higher sequentially;
domestic land revenue was approximately $71.4 million, a sequential decline of 4%; and
international revenue was approximately $92.1 million, a sequential increase of 30%. |
Terence Hall, Chairman and CEO of Superior, stated, International demand for rental tools and
production-related services coupled with increased demand for well intervention services and
liftboats in the Gulf of Mexico more than offset activity declines in our domestic rental tools
businesses. In our Well Intervention Segment, we benefitted from additional international activity
in West Africa and Europe. In our Marine Segment, liftboat activity was higher due to
increased utilization across most vessel classes and a full quarter of contribution from our two
265-foot class liftboats. Looking ahead, we expect the bottoming process in domestic land markets
to continue. In addition, we anticipate seasonal factors will further reduce activity levels
during the winter months in all major geographic markets.
Well Intervention Segment
Third quarter revenue for the Well Intervention Segment was $254.3 million, a 20% decrease
year-over-year and a 10% increase sequentially. Income from operations was $31.6 million, or 12%
of segment revenue as compared with $90.3 million, or 28% of segment revenue, in the third quarter
of 2008, and $27.6 million (excluding $92.7 million in special charges), or 12% of segment revenue,
in the second quarter of 2009.
This segment experienced sequential increases in production-related service activity in all three
major geographic regions. In the domestic land market, the biggest activity increases were in
hydraulic workover and snubbing services. In the Gulf of Mexico, activity increased sequentially
for the Companys plug and abandonment services and all of the segments production-related
services, with the largest increases coming from cased hole wireline, coiled tubing, hydraulic
workover and snubbing services, and engineering and project management. International revenue in
this segment increased due to well control work and sales of well control equipment in Nigeria,
increased cased hole wireline and snubbing demand in Continental Europe, and work on the Companys
projects off the Angola coast.
Rental Tools Segment
Quarterly revenue for the Rental Tools Segment was $100.8 million, a 26% decrease year-over-year
and a 2% decrease sequentially. Income from operations was $17.9 million, or 18% of segment
revenue, as compared with $43.6 million, or 32% of segment revenue in the third quarter of 2008,
and $20.1 million, or 20% of segment revenue in the second quarter of 2009. Activity declined in
the domestic land market for stabilization equipment. Gulf of Mexico rentals decreased primarily
due to fewer rentals of drill pipe in the deepwater Gulf of Mexico as a result of transition
downtime for several ongoing projects. These declines were partially offset by a 17% increase in
international revenue primarily due to increased rentals of drill pipe in Brazil and Colombia, and
sales of accommodation units in the Middle East.
Marine Segment
Marine Segment revenue was $31.3 million, an 8% decrease year-over-year and a 14% increase
sequentially. Income from operations was $5.1 million, or 16% of segment revenue, down from $6.5
million, or 19% of segment revenue in the third quarter of 2008, and up from $4.9 million, or 18%
of segment revenue in the second quarter of 2009. Average daily revenue in the third quarter was
approximately $340,000, inclusive of subsistence revenue, as compared with approximately $368,000
per day in the third quarter of 2008 and approximately $302,000 in the second quarter of 2009.
Average fleet utilization was 62% as compared with 81% in the third quarter of 2008 and 53% in the
second quarter of 2009. Utilization was higher across most
liftboat classes. The results include a full quarter of contribution from the two 265-foot class
liftboats, which were added to the fleet during the second quarter of 2009.
Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended September 30, 2009
($ actual)
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Average |
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Class |
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Liftboats |
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Dayrate |
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Utilization |
145'-155' |
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10 |
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$ |
6,385 |
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35.5 |
% |
160'-175' |
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8 |
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8,555 |
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61.7 |
% |
200' |
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5 |
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11,329 |
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84.1 |
% |
230'-245' |
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3 |
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27,330 |
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92.4 |
% |
250' |
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2 |
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30,691 |
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83.7 |
% |
265' |
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2 |
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41,247 |
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78.3 |
% |
Equity-Method Investments
The Companys third quarter 2009 loss in its equity-method investments includes the aforementioned
unrealized losses from hedging contracts of $1.5 million and other non-cash charges of $4.7
million. Excluding these items, earnings from equity-method investments were $2.0 million.
Conference Call Information
The Company will host a conference call at 10:30 a.m. Central Time on Thursday, October 29, 2009.
The call can be accessed from Superiors website at www.superiorenergy.com, or by telephone at
480-629-9645. For those who cannot listen to the live call, a telephonic replay will be available
through Thursday, November 5, 2009 and may be accessed by calling 303-590-3030 and using the pass
code 4169098#. An archive of the webcast will be available after the call for a period of 60 days
on http://www.superiorenergy.com.
Superior Energy Services, Inc. serves the drilling and production-related needs of oil and gas
companies worldwide through its brand name rental tools and its integrated well intervention
services and tools, supported by an engineering staff who plan and design solutions for customers.
Offshore projects are delivered by the Companys fleet of modern marine assets.
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. Accuracy of the forward-looking statements depends on assumptions about events that
change over time and is thus susceptible to periodic change based on actual experience and new
developments. 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 uncertainty of
macroeconomic and business conditions worldwide, as well as the global credit markets; risks
associated with the Companys rapid growth; changes in competitive factors and other material risk
factors that are described in the Companys Annual Report on
Form 10-K for the year ended December
31, 2008, filed with the Securities and Exchange Commission (SEC) as updated by our subsequent
filings with the SEC. 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. The Company cautions readers that it assumes no obligation to update the forward-looking
statements in this press release and does not intend to update the forward-looking statements more
frequently than quarterly.
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2009 and 2008
(in thousands, except earnings per share amounts)
(unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2009 |
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2008 |
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2009 |
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2008 |
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As Adjusted |
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As Adjusted |
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(Note 1) |
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(Note 1) |
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Oilfield service and rental revenues |
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$ |
386,455 |
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$ |
490,282 |
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$ |
1,184,725 |
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$ |
1,334,256 |
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Oil and gas revenues |
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55,072 |
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Total revenues |
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386,455 |
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490,282 |
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1,184,725 |
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1,389,328 |
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Cost of oilfield services and rentals |
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215,674 |
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236,610 |
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635,407 |
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649,839 |
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Cost of oil and gas sales |
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12,986 |
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Total cost of services, rentals and sales (exclusive of
items shown separately below) |
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215,674 |
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236,610 |
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635,407 |
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662,825 |
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Depreciation, depletion, amortization and accretion |
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52,720 |
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44,842 |
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153,566 |
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128,675 |
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General and administrative expenses |
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63,425 |
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68,379 |
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188,694 |
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204,411 |
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Reduction in value of intangible assets |
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|
92,683 |
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Gain on sale of businesses |
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40,946 |
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Income from operations |
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54,636 |
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|
140,451 |
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|
114,375 |
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434,363 |
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Other income (expense): |
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Interest expense, net |
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(12,320 |
) |
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(11,659 |
) |
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(37,328 |
) |
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(34,865 |
) |
Earnings (losses) from equity-method investments, net |
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(4,161 |
) |
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23,167 |
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(21,331 |
) |
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19,359 |
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Reduction in value of equity-method investment |
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(36,486 |
) |
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Income before income taxes |
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38,155 |
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|
151,959 |
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19,230 |
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418,857 |
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Income taxes |
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|
13,736 |
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|
54,665 |
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6,923 |
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|
150,667 |
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Net income |
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$ |
24,419 |
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$ |
97,294 |
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$ |
12,307 |
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$ |
268,190 |
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Basic earnings per share |
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$ |
0.31 |
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$ |
1.21 |
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$ |
0.16 |
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$ |
3.32 |
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Diluted earnings per share |
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$ |
0.31 |
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$ |
1.19 |
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$ |
0.16 |
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$ |
3.27 |
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Weighted average common shares used
in computing earnings per share: |
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Basic |
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|
78,188 |
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|
80,538 |
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|
78,126 |
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|
80,691 |
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Diluted |
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|
78,812 |
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|
81,845 |
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|
78,684 |
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|
82,041 |
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Note 1
On January 1, 2009, we adopted the provisions of a new accounting standard
which changed the accounting for the Companys 1.5% senior exchangeable
notes. The comparative Statements of Operations for the three and nine
months ended September 30, 2008 have been adjusted to comply with this
standard on a retrospective basis.
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
(in thousands)
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9/30/2009 |
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12/31/2008 |
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(Unaudited) |
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As Adjusted |
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(Note 1) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
34,282 |
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$ |
44,853 |
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Accounts receivable, net |
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|
354,902 |
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|
360,357 |
|
Income taxes receivable |
|
|
8,506 |
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|
|
|
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Prepaid expenses |
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|
27,511 |
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|
|
18,041 |
|
Other current assets |
|
|
379,106 |
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|
|
223,598 |
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Total current assets |
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|
804,307 |
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|
|
646,849 |
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|
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|
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|
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|
Property, plant and equipment, net |
|
|
1,208,819 |
|
|
|
1,114,941 |
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Goodwill |
|
|
481,021 |
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|
|
477,860 |
|
Equity-method investments |
|
|
55,678 |
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|
|
122,308 |
|
Intangible and other long-term assets, net |
|
|
37,139 |
|
|
|
128,187 |
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|
|
|
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|
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|
|
|
|
|
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|
|
Total assets |
|
$ |
2,586,964 |
|
|
$ |
2,490,145 |
|
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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|
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|
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Accounts payable |
|
$ |
69,847 |
|
|
$ |
87,207 |
|
Accrued expenses |
|
|
143,756 |
|
|
|
152,536 |
|
Income taxes payable |
|
|
|
|
|
|
20,861 |
|
Deferred income taxes |
|
|
66,478 |
|
|
|
36,830 |
|
Current maturities of long-term debt |
|
|
810 |
|
|
|
810 |
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
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Total current liabilities |
|
|
280,891 |
|
|
|
298,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes |
|
|
241,899 |
|
|
|
246,824 |
|
Long-term debt, net |
|
|
724,560 |
|
|
|
654,199 |
|
Other long-term liabilities |
|
|
48,967 |
|
|
|
36,605 |
|
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
1,290,647 |
|
|
|
1,254,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
2,586,964 |
|
|
$ |
2,490,145 |
|
|
|
|
|
|
|
|
Note 1
On January 1, 2009, we adopted the provisions of a new accounting standard
which changed the accounting for the Companys 1.5% senior exchangeable notes.
The comparative Balance Sheet as of December 31, 2008 has been adjusted to
comply with this standard on a retrospective basis.
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended September 30, 2009, June 30, 2009 and September 30, 2008 (Unaudited)
(unaudited)
(in thousands)
|
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|
|
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|
|
Three months ended, |
|
Revenue |
|
September 30, 2009 |
|
|
June 30, 2009 |
|
|
September 30, 2008 |
|
Well Intervention |
|
$ |
254,335 |
|
|
$ |
231,121 |
|
|
$ |
319,798 |
|
Rental Tools |
|
|
100,832 |
|
|
|
102,533 |
|
|
|
136,600 |
|
Marine |
|
|
31,288 |
|
|
|
27,507 |
|
|
|
33,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
$ |
386,455 |
|
|
$ |
361,161 |
|
|
$ |
490,282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (1) |
|
September 30, 2009 |
|
|
June 30, 2009 |
|
|
September 30, 2008 |
|
Well Intervention |
|
$ |
94,098 |
|
|
$ |
83,607 |
|
|
$ |
150,895 |
|
Rental Tools |
|
|
64,621 |
|
|
|
69,231 |
|
|
|
90,178 |
|
Marine |
|
|
12,062 |
|
|
|
11,055 |
|
|
|
12,599 |
|
|
|
|
|
|
|
|
|
|
|
Total Gross Profit |
|
$ |
170,781 |
|
|
$ |
163,893 |
|
|
$ |
253,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Operations |
|
September 30, 2009 |
|
|
June 30, 2009 |
|
|
September 30, 2008 |
|
Well Intervention (2) |
|
$ |
31,563 |
|
|
$ |
(65,094 |
) |
|
$ |
90,349 |
|
Rental Tools |
|
|
17,940 |
|
|
|
20,123 |
|
|
|
43,628 |
|
Marine |
|
|
5,133 |
|
|
|
4,920 |
|
|
|
6,474 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Income (Loss) from Operations |
|
$ |
54,636 |
|
|
$ |
(40,051 |
) |
|
$ |
140,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Gross profit is calculated by subtracting cost of services (exclusive of depreciation and
amortization) from revenue for each of the Companys segments. |
|
(2) |
|
Income from operations in the Well Intervention Segment for the three months ended June 30,
2009 includes a reduction in value of long-lived intangible assets of $92.7 million. |