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): April 25, 2013

 

 

SUPERIOR ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-34037		75-2379388
(State or other jurisdiction)		(Commission File Number)		(IRS Employer Identification No.)

 

11000 Equity Dr., Suite 300 Houston, TX		77041
(Address of principal executive offices)		(Zip Code)

(281) 999-0047

(Registrant’s 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:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	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. Results of Operations and Financial Condition.

On April 25, 2013, Superior Energy Services, Inc. issued a press release announcing its earnings for the first quarter ended March 31, 2013. 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit Number		Description
99.1		Press release issued by Superior Energy Services, Inc., April 25, 2013.

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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.

 

Dated: April 26, 2013

Exhibit 99.1

 

		11000 Equity Drive, #300 Houston, TX 77041-8240 NYSE: SPN (281) 999-0047

FOR FURTHER INFORMATION CONTACT:

David Dunlap, President and CEO, (281) 999-0047;

Robert Taylor, CFO or Greg Rosenstein, EVP of Corporate Development, (504) 587-7374

Superior Energy Services, Inc. Announces First Quarter 2013 Results

Houston – April 25, 2013 – Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $63.7 million, or $0.40 per diluted share, on revenue of $1,135.5 million for the first quarter of 2013.

These results compare with the first quarter of 2012 net income from continuing operations of $70.2 million, or $0.55 per diluted share, and net income of $53.9 million, or $0.42 per diluted share, on revenue of $966.8 million. The first quarter of 2012 included only a partial quarter from the legacy Complete Production Services businesses which are contained within the Onshore Completion and Workover and Production Services segments, making comparisons of the first quarter 2013 and 2012 for those segments less meaningful.

David Dunlap, President and CEO of the Company, commented, “Our first quarter results came in at the midpoint of our expectations. Lower general and administrative expense partially offset lower gross profit and higher depreciation. Our goal has been to both reduce and defer expenditures until we see indications of increased drilling and completion activity in the U.S. land markets. For example, we limited our capital additions to $130 million for the quarter, well under our originally planned $200 million.

“Modest increases in completions activity toward the end of the first quarter, coupled with continued improvement in our pressure pumping business yielded sequential increases in revenue and income from operations as a percentage of revenue (“operating margin”) in our Onshore Completion and Workover Services segment. These were offset in part by sequential declines in operating margin in our other three segments. The Subsea and Technical Solutions segment was adversely impacted by anticipated seasonality in the shallow water Gulf of Mexico and offshore Asia Pacific market areas, as well as low profit margins on certain decommissioning projects in the Gulf of Mexico.”

First Quarter 2013 Geographic Breakdown

U.S. land market revenue was approximately $732.8 million in the first quarter of 2013, as compared with $642.8 million in the first quarter of 2012 and $730.2 million in the fourth quarter of 2012. Gulf of Mexico revenue was approximately $208.0 million, as compared with $153.0 million in the first quarter of 2012 and $212.7 million in the fourth quarter of 2012. International revenue was approximately $194.7 million, as compared with $171.1 million in the first quarter of 2012 and $235.3 million in the fourth quarter of 2012.

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Drilling Products and Services Segment

Drilling Products and Services segment revenue was $194.0 million, a 2% increase from first quarter 2012 revenue of $189.4 million and a 1% increase from fourth quarter 2012 revenue of $192.7 million.

The primary factor driving the higher sequential revenue in this segment was a 4% increase in international market revenue to $50.1 million due to increased rentals of accommodations in Europe. Gulf of Mexico market revenue increased 2% sequentially to $69.9 million due to increased specialty rentals, while U.S. land market revenue decreased 2% to $74.0 million primarily due to lower demand for premium drill pipe and accommodations, partially offset by an increase in demand for bottom hole assemblies.

Onshore Completion and Workover Services Segment

Onshore Completion and Workover Services segment revenue in the first quarter was $426.0 million, a 52% increase from first quarter 2012 revenue of $279.7 million, and a 2% increase from fourth quarter 2012 revenue of $417.7 million. Virtually all of the revenue in this segment is generated from U.S. land market areas.

On a sequential basis, revenue increases from pressure pumping and well service rigs were partially offset by a decline in fluid management revenue. The increase in pressure pumping revenue was due to additional utilization of contracted fleets, while well service rig revenue was higher as a result of increased utilization and pricing in certain basins. The decline in fluid management revenue was associated with reduced demand for transportation and storage assets.

Production Services Segment

Production Services segment revenue was $367.4 million, a 4% increase from first quarter 2012 revenue of $354.0 million and a 1% decline from fourth quarter 2012 revenue of $369.3 million.

U.S. land market revenue declined 3% sequentially to $216.7 million, primarily due to reduced demand for pressure control, remedial pumping and snubbing services, which was partially offset by an increase in wireline services. Revenue from coiled tubing services was unchanged in the U.S. land market. International market revenue increased 7% to $96.8 million due to increased production testing activity in Argentina, remedial pumping in Brazil and cementing activity from our recent acquisition in Colombia. Gulf of Mexico revenue declined 5% to $53.9 million primarily due to seasonal factors in the shallow water market area.

Subsea and Technical Solutions Segment

Subsea and Technical Solutions segment revenue was $148.1 million, a 3% increase from first quarter 2012 revenue of $143.8 million and a 25% decrease from fourth quarter 2012 revenue of $198.5 million.

Gulf of Mexico market revenue decreased 4% sequentially to $84.1 million due to seasonal factors resulting in lower activity levels for well control services and well and platform decommissioning services. International market revenue declined 50% to $47.8 million as a result of lower subsea construction and well control activity. U.S. land market revenue increased 8% sequentially to $16.2 million.

 

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2013 Earnings Guidance Update

The Company maintains its prior earnings per share guidance range of $1.85 to $2.35.

Dunlap commented, “We maintained our prior guidance as the visibility regarding variables driving the range of potential outcomes – specifically the timing and intensity of utilization and rig activity in the U.S. land market areas – is still unknown. Our first quarter results came in as expected and we are certainly encouraged by what we experienced towards the latter stages of the quarter for certain completions-related services.”

Conference Call Information

The Company will host a conference call at 10 a.m. Central Time on Friday, April 26, 2013. The call can be accessed from Company’s 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 Friday, May 10, 2013 and may be accessed by calling 303-590-3030 and using the pass code 4613819#. An archive of the webcast will be available after the call for a period of 60 days at www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling, completion and production-related needs of oil and gas companies worldwide through its brand name drilling products and its integrated completion and well intervention services and tools, supported by an engineering staff who plan and design solutions for customers.

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 uncertainty of macroeconomic and business conditions worldwide, as well as the global credit markets; risks associated with the Company’s rapid growth; risks associated with the integration of the Completion Production Services Inc.’s operations; 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 the Company or any other person that the projected outcomes can or will be achieved.

 

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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Three Months Ended March 31, 2013 and 2012

(in thousands, except earnings per share amounts)

(unaudited)

 

		Three Months Ended
		March 31,
		2013				2012
Revenues		$	1,135,479			$	966,837
Cost of services (exclusive of items shown separately below)			707,487				546,767
Depreciation, depletion, amortization and accretion			149,634				102,596
General and administrative expenses			150,164				176,021
Income from continuing operations			128,194				141,453
Other income (expense):
Interest expense, net			(27,540	)			(30,494	)
Other			500				401
Income from continuing operations before income taxes			101,154				111,360
Income taxes			37,427				41,203
Net income from continuing operations			63,727				70,157
Loss from discontinued operations, net of income tax			—				(16,237	)
Net income		$	63,727			$	53,920
Basic earnings per share:
Net income from continuing operations		$	0.40			$	0.56
Loss from discontinued operations			—				(0.13	)
Net income		$	0.40			$	0.43
Diluted earnings per share:
Net income from continuing operations		$	0.40			$	0.55
Loss from discontinued operations			—				(0.13	)
Net income		$	0.40			$	0.42
Weighted average common shares used in computing earnings per share:
Basic			158,946				125,542
Diluted			160,433				127,344

 

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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2013 AND DECEMBER 31, 2012

(in thousands)

 

		3/31/2013				12/31/2012
		(Unaudited)				(Audited)
ASSETS
Current assets:
Cash and cash equivalents		$	77,075			$	91,199
Accounts receivable, net			1,030,674				1,027,218
Deferred income taxes			27,317				34,120
Prepaid expenses			93,936				93,190
Inventory and other current assets			244,090				214,630
Total current assets			1,473,092				1,460,357
Property, plant and equipment, net			3,220,215				3,255,220
Goodwill			2,547,497				2,532,065
Notes receivable			45,558				44,838
Intangible and other long-term assets, net			503,022				510,406
Total assets		$	7,789,384			$	7,802,886
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	238,739			$	252,363
Accrued expenses			331,520				346,490
Income taxes payable			39,371				153,212
Current maturities of long-term debt			20,000				20,000
Total current liabilities			629,630				772,065
Deferred income taxes			759,908				745,144
Decommissioning liabilities			94,565				93,053
Long-term debt, net			1,844,584				1,814,500
Other long-term liabilities			169,523				147,045
Total stockholders’ equity			4,291,174				4,231,079
Total liabilities and stockholders’ equity		$	7,789,384			$	7,802,886

 

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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

THREE MONTHS ENDED MARCH 31, 2013, DECEMBER 31, 2012, AND MARCH 31, 2012

(unaudited)

(in thousands)

 

		Three months ended,
		March 31, 2013				December 31, 2012				March 31, 2012
Revenue
Drilling Products and Services		$	193,979			$	192,677			$	189,357
Onshore Completion and Workover Services			425,983				417,738				279,676
Production Services			367,397				369,341				354,041
Subsea and Technical Solutions			148,120				198,491				143,763
Total Revenues		$	1,135,479			$	1,178,247			$	966,837
		March 31, 2013				December 31, 2012				March 31, 2012
Gross Profit (1)
Drilling Products and Services		$	129,334			$	127,834			$	126,791
Onshore Completion and Workover Services			144,244				144,626				94,014
Production Services			114,342				120,228				156,026
Subsea and Technical Solutions			40,072				62,745				43,239
Total Gross Profit		$	427,992			$	455,433			$	420,070
		March 31, 2013				December 31, 2012 (2)				March 31, 2012 (3)
Income from Continuing Operations
Drilling Products and Services		$	56,597			$	57,424			$	57,229
Onshore Completion and Workover Services			49,708				46,904				12,391
Production Services			28,347				32,015				73,762
Subsea and Technical Solutions			(6,458	)			10,287				(1,929	)
Total Income from Continuing Operations		$	128,194			$	146,630			$	141,453

 

(1)	Gross profit is calculated by subtracting cost of services (exclusive of depreciation, depletion, amortization and accretion) from revenue for each of the Company’s segments.

(2)	Includes $2.1 million of additional consideration for an acquisition based on the acquired company exceeding performance goals.

(3)	Includes $29.0 million of transaction-related expenses.

 

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