Exhibit 99
| FOR IMMEDIATE RELEASE | Investor Contact: David Tucker | 281-406-2370 | ||
| May 3, 2006 |
Parker Drilling Nearly Triples First Quarter Earnings
Houston, May 3, 2006 — Parker Drilling Company (NYSE: PKD) today announced its financial results for the three months ended March 31, 2006. The Company reported that first quarter 2006 net income increased to $11.5 million, or $0.11 per diluted share, from 2005 first quarter net income of $3.9 million, or $0.04 per diluted share. Net income for the first quarter of 2006 includes income tax expense of $14.5 million, of which $8.9 million, or $0.08 per diluted share, was non-cash deferred tax expense compared to no deferred tax expense in the $4.9 million of income tax expense in the first quarter of 2005. Revenues for the first quarter of 2006 increased 23 percent to $147.3 million from 2005 first quarter revenues of $120.2 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $50.3 million for the first quarter of 2006 and was 44 percent higher than the $34.9 million reported in the first quarter of 2005 and 15 percent higher than the $43.9 million reported in the fourth quarter of 2005. This marks the sixth consecutive quarter of EBITDA improvement and is the highest quarterly EBITDA in 25 years. (The details of the EBITDA calculation, a non-GAAP financial measure, for the current and prior eight quarters are defined and reconciled later in this press release to their most directly comparable GAAP financial measure.)
The average utilization of international land rigs for the first quarter of 2006 increased to 84 percent, significantly higher than the 67 percent reported for the first quarter of 2005. Average utilization for the Gulf of Mexico barge rigs for the first quarter of 2006 was 73 percent, compared to 77 percent reported for the first quarter of 2005. This decline in utilization is mainly due to barge rig 12’s shipyard program which is scheduled to be completed within the next two weeks. The Company’s deep drilling barge dayrates in the Gulf of Mexico during the first quarter of 2006 averaged $37,700, up approximately 50 percent, or $12,700 per day, from the first quarter of 2005 and approximately 10 percent, or $3,400 per day, above the fourth quarter of 2005.
Quail Tools, Parker Drilling’s specialized drilling and production rental tools subsidiary, continued its outstanding performance as it posted a quarterly record with revenues of $27.3 million. This follows Quail’s record-setting 2005, in which it posted $94.8 million in total
revenues, the highest in Quail Tools’ history. Quail Tools opened a new service area in the Williston Basin in the first quarter of 2006, and additional expansion is scheduled as Quail plans to open a new operating facility located in Northeast Texas, covering the Barnett Shale area and Fayetteville Shale area in Arkansas.
The Company also announced today that its barge rig 76 was awarded a one-year term contract beginning in June for work along the Southeast Louisiana coast by McMoRan Exploration, where it is currently drilling ultra-deep gas prospects.
“Parker Drilling delivered solid revenue and earnings per share results for the quarter,” said Robert L. Parker Jr., chairman, president and chief executive officer. “We expect to continue to realize strong near-term contributions from Quail Tools and increased dayrates in our U.S. Gulf of Mexico transition zone market. The benefits from the Quail Tools expansion and rising international dayrates, contract rollovers and increasing activity are expected to contribute significantly to results throughout the rest of the year.”
Capital expenditures for the first quarter were $35.9 million. Total debt was $379.9 million at March 31, 2006, and the Company’s cash balance was $186.6 million.
Business highlights during the first quarter included:
| • | The formation of a joint venture company between Parker Drilling Company and Abdullah Rasheed Al-Rushaid Company for Drilling Oil and Gas Limited, which will perform four drilling contracts, each with a term of three years with a one-year option, for Saudi Aramco. | ||
| • | In January, Parker Drilling completed a public offering of 8,900,000 shares of its common stock, proceeds of which totaled approximately $100 million. The Company is using the net proceeds, together with cash on hand, to invest in the expansion of its rig fleet and Quail Tools. | ||
| • | Land rig 121 was awarded a one-year contract by Golden Gate Petroleum, Ltd., for work on Padre Island, Texas. Work will begin in June following completion of the rig’s current contract in Mexico. The contract also includes options for four, six-month extension periods. | ||
| • | Parker land rig 225 mobilized from an inactive status in Indonesia for a two-well contract with Tullow Bangladesh Ltd. in Bangladesh. The well program is expected to last for approximately six months, and the contract includes options for two additional wells. | ||
| • | Barge rig 12 was awarded three consecutive two-month contracts by Gulfport Energy Corporation for work along the Southwest Louisiana coast. Rig 12 is currently being upgraded from a workover to deep drilling barge rig and is expected to depart the shipyard in mid-May. |
“We are off to a good start in an important year for the Company,” Parker said. “Based on the strong first quarter financial results and our continued positive outlook, we expect to finish the year at least at the high end of our previous 2006 diluted earnings per share guidance.”
Parker has scheduled a conference call at 10 a.m. CST (11 a.m. EST) May 3, 2006 to discuss first quarter 2006 results. Those interested in participating in the call may dial in at (303) 205-0066. The conference call replay can be accessed from May 3 through May 10 by dialing (303) 590-3000 and using the access code 11058860#. Alternatively, the call can be accessed live through the Company’s website at http://www.parkerdrilling.com and will be archived on the site for 12 months.
This release contains certain statements that may be deemed to be “forward-looking statements" within the meaning of the Securities Acts. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including earnings per share guidance, the outlook for rig utilization and dayrates, general industry conditions including bidding activity, future operating results of the Company’s rigs and rental tool operations, capital expenditures, expansion and growth opportunities, asset sales and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this release are based on reasonable assumptions, actual results may differ materially from those expressed or implied in the forward-looking statements. For a detailed discussion of risk factors that could cause actual results to differ materially from the Company’s expectations, please refer to the Company’s reports filed with the SEC, and in particular, the report on Form 10-K for the year ended December 31, 2005. Each forward-looking statement speaks only as of the date of this release, and the Company undertakes no obligation to publicly update or revise any forward-looking statement.
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2006 | 2005 | |||||||
| (Dollars in Thousands) | ||||||||
| DRILLING AND RENTAL REVENUES | ||||||||
| U.S. Drilling | $ | 40,253 | $ | 27,117 | ||||
| International Drilling | 79,830 | 72,172 | ||||||
| Rental Tools | 27,251 | 20,954 | ||||||
| TOTAL DRILLING AND RENTAL REVENUES | 147,334 | 120,243 | ||||||
| DRILLING AND RENTAL OPERATING EXPENSES | ||||||||
| U.S. Drilling | 17,470 | 14,388 | ||||||
| International Drilling | 61,372 | 55,803 | ||||||
| Rental Tools | 10,470 | 8,185 | ||||||
| Depreciation and Amortization | 16,957 | 16,876 | ||||||
| TOTAL DRILLING AND RENTAL OPERATING EXPENSES | 106,269 | 95,252 | ||||||
| DRILLING AND RENTAL OPERATING INCOME | 41,065 | 24,991 | ||||||
| General and Administrative Expense | (7,694 | ) | (6,976 | ) | ||||
| Gain on Disposition of Assets, Net | 448 | 552 | ||||||
| TOTAL OPERATING INCOME | 33,819 | 18,567 | ||||||
| OTHER INCOME AND (EXPENSE) | ||||||||
| Interest Expense | (9,101 | ) | (11,056 | ) | ||||
| Change in Fair Value of Derivative Position | 813 | 1,607 | ||||||
| Loss on Extinguishment of Debt | (2 | ) | (1,429 | ) | ||||
| Other Income (Expense) — Net | 425 | 1,001 | ||||||
| TOTAL OTHER INCOME AND (EXPENSE) | (7,865 | ) | (9,877 | ) | ||||
| INCOME BEFORE INCOME TAXES | 25,954 | 8,690 | ||||||
| INCOME TAX EXPENSE | ||||||||
| Current Tax Expense | 5,563 | 4,852 | ||||||
| Deferred Tax Benefit | 8,933 | — | ||||||
| TOTAL INCOME TAX EXPENSE | 14,496 | 4,852 | ||||||
| INCOME FROM CONTINUING OPERATIONS | 11,458 | 3,838 | ||||||
| Discontinued Operations, Net of Taxes | — | 91 | ||||||
| NET INCOME | $ | 11,458 | $ | 3,929 | ||||
| EARNINGS PER SHARE — BASIC | ||||||||
| Income From Continuing Operations | $ | 0.11 | $ | 0.04 | ||||
| Discontinued Operations, Net of Taxes | $ | — | $ | — | ||||
| Net Income | $ | 0.11 | $ | 0.04 | ||||
| EARNINGS PER SHARE — DILUTED | ||||||||
| Income From Continuing Operations | $ | 0.11 | $ | 0.04 | ||||
| Discontinued Operations, Net of Taxes | $ | — | $ | — | ||||
| Net Income | $ | 0.11 | $ | 0.04 | ||||
| AVERAGE COMMON SHARES OUTSTANDING | ||||||||
| Basic | 104,469,893 | 94,948,637 | ||||||
| Diluted | 106,315,826 | 96,145,661 | ||||||
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
(Unaudited)
| March 31, 2006 | December 31, 2005 | |||||||
| (Dollars in Thousands) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and Cash Equivalents | $ | 186,630 | $ | 60,176 | ||||
| Marketable Securities | — | 18,000 | ||||||
| Accounts and Notes Receivable, Net | 118,122 | 104,681 | ||||||
| Rig Materials and Supplies | 17,264 | 18,179 | ||||||
| Deferred Costs | 3,548 | 4,223 | ||||||
| Deferred income taxes | 12,018 | 12,018 | ||||||
| Other Current Assets | 49,358 | 64,058 | ||||||
| TOTAL CURRENT ASSETS | 386,940 | 281,335 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 373,515 | 355,397 | ||||||
| OTHER ASSETS | ||||||||
| Goodwill | 107,606 | 107,606 | ||||||
| Other Assets | 48,860 | 57,282 | ||||||
| TOTAL OTHER ASSETS | 156,466 | 164,888 | ||||||
| TOTAL ASSETS | $ | 916,921 | $ | 801,620 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Current Portion of Long-Term Debt | $ | — | $ | — | ||||
| Accounts Payable and Accrued Liabilities | 145,181 | 150,755 | ||||||
| TOTAL CURRENT LIABILITIES | 145,181 | 150,755 | ||||||
| LONG-TERM DEBT | 379,853 | 380,015 | ||||||
| OTHER LIABILITIES | 11,009 | 11,021 | ||||||
| STOCKHOLDERS’ EQUITY | 380,878 | 259,829 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 916,921 | $ | 801,620 | ||||
| Current Ratio | 2.67 | 1.87 | ||||||
| Total Long-Term Debt as a Percent of Capitalization | 50 | % | 59 | % | ||||
| Book Value Per Common Share | $ | 3.53 | $ | 2.66 | ||||
PARKER DRILLING COMPANY AND SUBSIDIARIES
Selected Financial Data
(Unaudited)
(Unaudited)
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2006 | 2005 | 2005 | ||||||||||
| (Dollars in Thousands) | ||||||||||||
DRILLING AND RENTAL REVENUES | ||||||||||||
| U.S. Drilling | $ | 40,253 | $ | 27,117 | $ | 36,162 | ||||||
| International Land Drilling | 66,126 | 56,552 | 72,503 | |||||||||
| International Offshore Drilling | 13,704 | 15,620 | 15,482 | |||||||||
| Rental Tools | 27,251 | 20,954 | 25,413 | |||||||||
Total Drilling and Rental Revenues | 147,334 | 120,243 | 149,560 | |||||||||
DRILLING AND RENTAL OPERATING EXPENSES | ||||||||||||
| U.S. Drilling | 17,470 | 14,388 | 18,423 | |||||||||
| International Land Drilling | 49,211 | 42,322 | 55,315 | |||||||||
| International Offshore Drilling | 12,161 | 13,481 | 13,199 | |||||||||
| Rental Tools | 10,470 | 8,185 | 10,723 | |||||||||
Drilling and Rental Operating Expenses | 89,312 | 78,376 | 97,660 | |||||||||
DRILLING AND RENTAL OPERATING INCOME | ||||||||||||
| U.S. Drilling | 22,783 | 12,729 | 17,739 | |||||||||
| International Land Drilling | 16,915 | 14,230 | 17,188 | |||||||||
| International Offshore Drilling | 1,543 | 2,139 | 2,283 | |||||||||
| Rental Tools | 16,781 | 12,769 | 14,690 | |||||||||
| Depreciation and Amortization | (16,957 | ) | (16,876 | ) | (16,619 | ) | ||||||
Total Drilling and Rental Operating Income | 41,065 | 24,991 | 35,281 | |||||||||
| General and Administrative Expense | (7,694 | ) | (6,976 | ) | (8,011 | ) | ||||||
| Provision for Reduction in Carrying Value of Certain Assets | — | — | (2,584 | ) | ||||||||
| Gain on Disposition of Assets, Net | 448 | 552 | 3,185 | |||||||||
TOTAL OPERATING INCOME | $ | 33,819 | $ | 18,567 | $ | 27,871 | ||||||
Marketable Rig Count Summary
As of March 31, 2006
As of March 31, 2006
| Total | ||||
U.S. Gulf of Mexico Barge Rigs | ||||
| Workover | 6 | |||
| Intermediate | 4 | |||
| Deep | 9 | |||
Total U.S. Gulf of Mexico Barge Rigs | 19 | |||
International Land Rigs | ||||
| Asia Pacific | 9 | |||
| Mexico | 7 | |||
| CIS | 8 | |||
Total International Land Rigs | 24 | |||
International Barge Rigs | ||||
| Mexico | 1 | |||
| Nigeria | 2 | |||
| Caspian Sea | 1 | |||
Total International Barge Rigs | 4 | |||
Total International Rigs | 28 | |||
Total Marketable Rigs | 47 | |||
PARKER DRILLING COMPANY AND SUBSIDIARIES
Adjusted EBITDA
(Unaudited)
(Unaudited)
| Three Months Ending | ||||||||||||||||||||||||||||||||||||
| 03/31/06 | 12/31/05 | 09/30/05 | 06/30/05 | 03/31/05 | 12/31/04 | 09/30/04 | 06/30/04 | 03/31/04 | ||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations | $ | 11,458 | $ | 56,707 | $ | 18,073 | $ | 20,194 | $ | 3,838 | $ | (2,147 | ) | $ | (24,802 | ) | $ | (16,022 | ) | $ | (7,594 | ) | ||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||||||
| Income Tax Expense | 14,496 | (39,087 | ) | 2,165 | 3,486 | 4,852 | 3,001 | 4,542 | 3,417 | 4,049 | ||||||||||||||||||||||||||
| Total Other Income and Expense | 7,865 | 10,251 | 9,627 | 15,140 | 9,877 | 10,698 | 22,027 | 13,017 | 13,681 | |||||||||||||||||||||||||||
| Gain on Disposition of Assets, Net | (448 | ) | (3,185 | ) | (5,943 | ) | (15,898 | ) | (552 | ) | (2,328 | ) | (333 | ) | (346 | ) | (723 | ) | ||||||||||||||||||
| Depreciation and Amortization | 16,957 | 16,619 | 16,563 | 17,146 | 16,876 | 18,642 | 17,806 | 16,544 | 16,249 | |||||||||||||||||||||||||||
| Provision for Reduction in Carrying Value | — | 2,584 | 2,300 | — | — | 6,562 | — | 6,558 | — | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 50,328 | $ | 43,889 | $ | 42,785 | $ | 40,068 | $ | 34,891 | $ | 34,428 | $ | 19,240 | $ | 23,168 | $ | 25,662 | ||||||||||||||||||