Exhibit 99
Media Contact:
Rose Maltby
281-406-2212
Rose Maltby
281-406-2212
FOR IMMEDIATE RELEASE
Investor Contact:
Richard Bajenski
281-406-2030
Richard Bajenski
281-406-2030
Parker Drilling Reports 2009 First Quarter Results
HOUSTON, May 6, 2009 — Parker Drilling Company (NYSE: PKD), a global drilling contractor and service provider, today reported financial and operating results for the 2009 first quarter. For the period, Parker Drilling reported net income of $2.1 million or $0.02 per diluted share on revenues of $173.9 million. Excluding non-routine items the Company reported net income of $5.6 million or $0.05 per diluted share. (A reconciliation of net income excluding non-routine items is provided in the attached financial tables).
Significant results and achievements of the first quarter include:
• | Revenues of $173.9 million, on par with the prior year’s first quarter, with revenue increases in the International Drilling and Project Management and Engineering Services segments. Including revenues from the new Construction Contract segment, these offset declines in U.S. Drilling and Rental Tools; |
• | A significant year-to-year increase in segment gross margin as a percent of revenues for International Drilling, reaching 35.7 percent for the quarter; |
• | International average rig utilization of 79 percent, ahead of last year’s first quarter average utilization of 73 percent; |
• | On-schedule progress in the construction of the BP-owned Liberty rig and two Parker-owned arctic Alaska rigs; and |
• | A first quarter company safety performance of 0.77 Total Recordable Incident Rate (TRIR), better than the Company’s 2009 TRIR goal of 0.92. |
“In a difficult market that has impacted every sector of the worldwide energy industry, Parker delivered a successful performance for the quarter, supported by our geographical diversification and balanced business mix,” said Robert L. Parker Jr., chairman and chief executive officer. “The Gulf of Mexico barge business has pared back its operating costs to sustain itself through the downturn in its market while capturing a significant portion of the drilling work that has been available. The longer-term nature and oil drilling focus of our international operations have provided a strong boost to revenues and earnings.
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The impact on Rental Tools from the decline in U.S. land drilling was softened by its position in the stronger shale regions and the strength of its customer relationships.
“The industry outlook for 2009 remains subdued, and will continue to impact the near-term prospects for the Company. Nevertheless, I expect our operating performance to improve as the year progresses, as we gain the benefits of a leaner cost structure; our strong technical, operational and safety leadership and our employee commitment to customer service,” Mr. Parker concluded.
2009 First Quarter Financial Review
For the three months ended March 31, 2009, Parker Drilling posted net income of $2.1 million, or $0.02 per diluted share, on revenues of $173.9 million, compared to net income of $23.2 million, or $0.21 per diluted share, on revenues of $173.3 million for the first quarter 2008. Excluding the impact of non-routine items, adjusted net income for the 2009 first quarter was $5.6 million or $0.05 per diluted share, compared with 2008 first quarter adjusted net income of $18.1 million or $0.16 per diluted share. (The results for 2008 have been restated for the impact of the recently adopted FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)”). The 2009 first quarter included non-routine net after-tax expense of $3.5 million, or $0.03 per diluted share related to the previously disclosed investigations by the Department of Justice and the Securities and Exchange Commission regarding the Company’s utilization of the services of a customs agent in certain countries and an internal investigation regarding U.S. economic sanctions related primarily to the Company’s operations in Turkmenistan. The results for the first quarter 2008 included net after-tax income of $5.1 million, or $0.05 per diluted share, for non-routine items. (Details of the non-routine items are provided in the attached financial tables.)
Total revenues for the 2009 first quarter were relatively unchanged compared to the same period last year. U.S. Barge Drilling revenues declined 78 percent, to $9.9 million from $45.9 million, due to lower utilization and dayrates for the Gulf of Mexico barge drilling fleet. International Drilling revenues rose 13 percent to $77.4 million from $68.7 million, primarily the result of higher average fleet utilization. Rental Tools revenues decreased 4 percent to $37.9 million from $39.5 million, with the impact of the recent decline in U.S. land and Gulf of Mexico sholf drilling mostly offset by increased coverage in the active shale regions, and an increase in demand for workover equipment. Revenues for Project Management and Engineering services increased to $32.1 million from $19.2 million, primarily as a result of higher revenues from the Sakhalin projects and additional engineering and operations maintenance (O&M) services. Construction Contract segment revenues of $16.7 million reflect the quarter’s progress on the construction contract for the BP-owned Liberty ultra-extended-reach rig.
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Adjusted EBITDA for the first quarter 2009 was $39.7 million compared to $61.0 million in the first quarter 2008. (Adjusted EBITDA is a non-GAAP financial measure. The calculations of adjusted EBITDA and reconciliation to the most directly comparable GAAP measure are shown on the attached tables). The Company’s U.S. Barge Drilling segment’s EBITDA was a loss of $3.3 million, compared to income of $24.4 million in the prior year’s first quarter, reflecting the impact of lower utilization and dayrates. The International Drilling segment’s EBITDA increased 71 percent to $27.6 million, compared to first quarter 2008 segment EBITDA of $16.1 million, primarily the result of an increase in fleet utilization and lower operating costs. Rental Tools achieved segment EBITDA of $21.4 million, 9 percent below the prior year first quarter segment EBITDA of $23.7 million. Delivering high quality products and customer service has provided support to strong operating margins for Quail Tools. Segment EBITDA for Project Management and Engineering Services increased 75 percent to $6.2 million, compared to the prior year’s first quarter level of $3.5 million, reflecting higher revenues for the Sakhalin projects and additional O&M and engineering projects.
Operations Review
• | Average utilization for the Company’s Gulf of Mexico barge rigs for the first quarter 2009 was 25 percent, compared to the 77 percent reported for the first quarter 2008 and the 61 percent reported for the fourth quarter 2008. Currently, barge rig utilization is 40 percent. The Company’s barge dayrates in the Gulf of Mexico averaged $28,000 per day during the first quarter 2009, compared to $41,200 per day in the first quarter 2008 and $39,400 per day in the fourth quarter 2008. (Average dayrates for each classification of barge by quarter are available in the “Dayrates — GOM” schedule posted on Parker’s website under “Investor Relations” at “Quarterly Support Materials”.) |
• | Average utilization of international rigs, both land and barge rigs, for the first quarter 2009 was 79 percent, compared to 73 percent reported for the first quarter 2008 and 87 percent reported for the fourth quarter 2008. (Average utilization for each international region’s rig fleet by quarter is available in the “Rig Utilization Schedule” posted on Parker’s website under “Investor Relations” at “Quarterly Support Materials”.) |
• | The Company’s Americas region operated at 90 percent utilization, with nine of ten rigs working throughout the quarter. Most of the working rigs in this region are on multi-well contracts that extend beyond 2009. | ||
• | Parker’s twelve rigs located in the Commonwealth of Independent States / Africa Middle East (CIS / AME) region achieved average utilization of 86 percent during the quarter. Eleven rigs worked during the quarter, with one rig completing its contracted work in January. The majority of the working rigs in the CIS / AME region are operating under contracts that extend beyond 2009. |
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• | The eight-rig Parker fleet located in the Asia Pacific region operated at 64 percent utilization during the quarter. Five of the eight rigs worked during the quarter, one of which completed its contracted work in January. Most contracts in this region are for short duration projects. One working rig is on a contract that extends beyond 2009. |
• | In Project Management and Engineering Services, the Yastreb rig¸ operated by Parker Drilling for the Sakhalin-1 consortium, completed its move north and spent much of the first quarter preparing to drill the Odoptu field. |
Capital expenditures for the three months ended March 31, 2009 totaled $51.4 million, including $17.5 million for the construction of Parker’s two newbuild land rigs for Alaska; and $17.2 million for tubular goods and other rental equipment.
At the end of the period total debt was $446.5 million, and the Company’s total debt-to-capitalization ratio was 43.2 percent. Adjusted for the Company’s cash and cash equivalents balance of $148.4 million at March 31, 2009, Parker’s ratio of net-debt-to-net capitalization increased to 33.7 percent from 31.6 percent at the end of 2008. The Company’s $50 million term loan begins to amortize at $3.0 million per quarter beginning the third quarter 2009, while the remaining components of the Company’s debt do not mature until 2012 and 2013.
Conference Call
Parker Drilling has scheduled a conference call at 10:00 a.m. CDT (11:00 a.m. EDT) on Wednesday, May 6, 2009 to discuss first quarter 2009 results. Those interested in listening to the call by telephone may do so by dialing (303) 228-2964. Alternatively, the call can be accessed through the Investor Relations section of the Company’s Web site athttp://www.parkerdrilling.com. A replay of the call will be available by telephone from May 6 through May 13 by dialing (303) 590-3000 and using the access code 11130198#, and for 12 months on the Company’s Web site.
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 demand for drilling and customer spending and the factors affecting demand, competitive advantages including cost effective integrated solutions and technological innovation, future technological innovation, future operating results of the Company’s rigs and rental tool operations, capital expenditures, expansion and growth opportunities, asset sales, successful negotiation and execution of contracts, strengthening of financial position, increase in market share 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 due to certain risk factors, including the ongoing credit crisis which has created volatility in oil and natural gas prices and could result in reduced demand for drilling services. 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,
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and in particular, the report onForm 10-K for the year ended December 31, 2008. 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.
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PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
Consolidated Condensed Balance Sheets
March 31, 2009 | December 31, 2008 | |||||||
(Unaudited) | ||||||||
(Dollars in Thousands) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and Cash Equivalents | $ | 148,403 | $ | 172,298 | ||||
Accounts and Notes Receivable, Net | 182,333 | 186,164 | ||||||
Rig Materials and Supplies | 30,201 | 30,241 | ||||||
Deferred Costs | 7,044 | 7,804 | ||||||
Deferred Income Taxes | 9,735 | 9,735 | ||||||
Other Current Assets | 61,546 | 67,049 | ||||||
TOTAL CURRENT ASSETS | 439,262 | 473,291 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 707,128 | 675,548 | ||||||
OTHER ASSETS | ||||||||
Deferred Income Taxes | 25,852 | 22,956 | ||||||
Other Assets | 33,060 | 33,925 | ||||||
TOTAL OTHER ASSETS | 58,912 | 56,881 | ||||||
TOTAL ASSETS | $ | 1,205,302 | $ | 1,205,720 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Current Portion of Long-Term Debt | $ | 9,000 | $ | 6,000 | ||||
Accounts Payable and Accrued Liabilities | 145,635 | 152,528 | ||||||
TOTAL CURRENT LIABILITIES | 154,635 | 158,528 | ||||||
LONG-TERM DEBT | 437,464 | 435,394 | ||||||
LONG-TERM DEFERRED TAX LIABILITY | 7,133 | 8,230 | ||||||
OTHER LONG-TERM LIABILITIES | 19,342 | 21,396 | ||||||
STOCKHOLDERS’ EQUITY | 586,728 | 582,172 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,205,302 | $ | 1,205,720 | ||||
Current Ratio | 2.84 | 2.99 | ||||||
Total Debt as a Percent of Capitalization | 43 | % | 43 | % | ||||
Book Value Per Common Share | $ | 5.04 | $ | 5.13 |
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
Consolidated Condensed Statements of Operations
(Unaudited)
Three Months Ended March 31, | ||||||||
2009 | 2008 | |||||||
(Dollars in Thousands) | ||||||||
REVENUES: | ||||||||
U.S. Drilling | $ | 9,856 | $ | 45,888 | ||||
International Drilling | 77,381 | 68,740 | ||||||
Project Management and Engineering Services | 32,054 | 19,179 | ||||||
Construction Contract | 16,745 | — | ||||||
Rental Tools | 37,889 | 39,471 | ||||||
TOTAL REVENUES | 173,925 | 173,278 | ||||||
OPERATING EXPENSES: | ||||||||
U.S. Drilling | 13,136 | 21,522 | ||||||
International Drilling | 49,777 | 52,621 | ||||||
Project Management and Engineering Services | 25,894 | 15,661 | ||||||
Construction Contract | 15,914 | — | ||||||
Rental Tools | 16,454 | 15,818 | ||||||
Depreciation and Amortization | 27,124 | 26,166 | ||||||
TOTAL OPERATING EXPENSES | 148,299 | 131,788 | ||||||
TOTAL OPERATING GROSS MARGIN | 25,626 | 41,490 | ||||||
General and Administrative Expense | (13,060 | ) | (6,668 | ) | ||||
Gain on Disposition of Assets, Net | 78 | 579 | ||||||
TOTAL OPERATING INCOME | 12,644 | 35,401 | ||||||
OTHER INCOME AND (EXPENSE): | ||||||||
Interest Expense | (8,066 | ) | (6,837 | ) | ||||
Interest Income | 286 | 368 | ||||||
Equity in Loss of Unconsolidated Joint Venture and Related Charges, net of tax | — | (1,105 | ) | |||||
Other Income | (12 | ) | 60 | |||||
TOTAL OTHER INCOME AND (EXPENSE) | (7,792 | ) | (7,514 | ) | ||||
INCOME BEFORE INCOME TAXES | 4,852 | 27,887 | ||||||
INCOME TAX EXPENSE (BENEFIT) | ||||||||
Current | 6,738 | (10,643 | ) | |||||
Deferred | (3,992 | ) | 15,328 | |||||
TOTAL INCOME TAX EXPENSE (BENEFIT) | 2,746 | 4,685 | ||||||
NET INCOME | $ | 2,106 | $ | 23,202 | ||||
EARNINGS PER SHARE — BASIC | ||||||||
Net Income | $ | 0.02 | $ | 0.21 | ||||
EARNINGS PER SHARE — DILUTED | ||||||||
Net Income | $ | 0.02 | $ | 0.21 | ||||
NUMBER OF COMMON SHARES USED IN COMPUTING EARNINGS PER SHARE | ||||||||
Basic | 112,260,517 | 110,546,311 | ||||||
Diluted | 113,366,444 | 111,481,301 |
PARKER DRILLING COMPANY AND SUBSIDIARIES
Selected Financial Data
(Unaudited)
Selected Financial Data
(Unaudited)
Three Months Ended | ||||||||||||
March 31, | December 31, | |||||||||||
2009 | 2008 | 2008 | ||||||||||
(Dollars in Thousands) | ||||||||||||
REVENUES: | ||||||||||||
U.S. Drilling | $ | 9,856 | $ | 45,888 | $ | 33,634 | ||||||
International Drilling | 77,381 | 68,740 | 86,211 | |||||||||
Project Management and Engineering Services | 32,054 | 19,179 | 37,928 | |||||||||
Construction Contract | 16,745 | — | 8,911 | |||||||||
Rental Tools | 37,889 | 39,471 | 45,696 | |||||||||
Total Revenues | 173,925 | 173,278 | 212,380 | |||||||||
OPERATING EXPENSES: | ||||||||||||
U.S. Drilling | 13,136 | 21,522 | 18,929 | |||||||||
International Drilling | 49,777 | 52,621 | 58,494 | |||||||||
Project Management and Engineering Services | 25,894 | 15,661 | 29,858 | |||||||||
Construction Contract | 15,914 | — | 8,442 | |||||||||
Rental Tools | 16,454 | 15,818 | 17,034 | |||||||||
Total Operating Expenses | 121,175 | 105,622 | 132,757 | |||||||||
OPERATING GROSS MARGIN: | ||||||||||||
U.S. Drilling | (3,280 | ) | 24,366 | 14,705 | ||||||||
International Drilling | 27,604 | 16,119 | 27,717 | |||||||||
Project Management and Engineering Services | 6,160 | 3,518 | 8,070 | |||||||||
Construction Contract | 831 | — | 469 | |||||||||
Rental Tools | 21,435 | 23,653 | 28,662 | |||||||||
Depreciation and Amortization | (27,124 | ) | (26,166 | ) | (31,961 | ) | ||||||
Total Operating Gross Margin | 25,626 | 41,490 | 47,662 | |||||||||
General and Administrative Expense | (13,060 | ) | (6,668 | ) | (10,288 | ) | ||||||
Impairment of Goodwill | — | — | (100,315 | ) | ||||||||
Gain on Disposition of Assets, Net | 78 | 579 | 683 | |||||||||
TOTAL OPERATING INCOME (LOSS) | $ | 12,644 | $ | 35,401 | $ | (62,258 | ) | |||||
Marketable Rig Count Summary
As of March 31, 2009
As of March 31, 2009
Total | ||||
U.S. Gulf of Mexico Barge Rigs | ||||
Workover | 2 | |||
Intermediate | 3 | |||
Deep | 10 | |||
Total U.S. Gulf of Mexico Barge Rigs | 15 | |||
International Land and Barge Rigs | ||||
Asia Pacific | 8 | |||
Americas | 10 | |||
CIS/AME | 12 | |||
Other | 1 | |||
Total International Land and Barge Rigs | 31 | |||
Total Marketable Rigs | 46 | |||
Adjusted EBITDA
(Unaudited)
(Dollars in Thousands)
(Unaudited)
(Dollars in Thousands)
Three Months Ended | ||||||||||||||||||||||||||||||||||||
March 31, 2009 | December 31, 2008 | September 30, 2008 | June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | ||||||||||||||||||||||||||||
Previously Reported Net Income (Loss) | $ | 2,106 | $ | (39,477 | ) | $ | 18,551 | $ | 22,596 | $ | 23,888 | $ | 34,571 | $ | 22,653 | $ | 16,860 | $ | 29,994 | |||||||||||||||||
Restated Interest Expense, Net of Tax — Per APB 14-1 | — | (724 | ) | (721 | ) | (699 | ) | (686 | ) | (670 | ) | (562 | ) | — | — | |||||||||||||||||||||
Restated N et Income (Loss) | 2,106 | (40,201 | ) | 17,830 | 21,897 | 23,202 | 33,901 | 22,091 | 16,860 | 29,994 | ||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||
Income Tax (Benefit) Expense | 2,746 | (31,178 | ) | 19,673 | 13,762 | 4,685 | (21,830 | ) | 18,803 | 15,813 | 24,109 | |||||||||||||||||||||||||
Total Other Income and Expense | 7,792 | 9,121 | 6,344 | 6,531 | 7,514 | 31,385 | 9,706 | 4,231 | 5,920 | |||||||||||||||||||||||||||
Loss/(Gain) on Disposition of Assets, Net | (78 | ) | (683 | ) | (799 | ) | (636 | ) | (579 | ) | 784 | (543 | ) | (269 | ) | (16,404 | ) | |||||||||||||||||||
Impairment of Goodwill | — | 100,315 | ||||||||||||||||||||||||||||||||||
Depreciation and Amortization | 27,124 | 31,961 | 30,663 | 28,166 | 26,166 | 25,059 | 23,043 | 19,642 | 18,059 | |||||||||||||||||||||||||||
Provision for Reduction in Carrying Value of Certain Assets | — | — | — | — | — | 371 | 1,091 | — | — | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 39,690 | $ | 69,335 | $ | 73,711 | $ | 69,720 | $ | 60,988 | $ | 69,670 | $ | 74,191 | $ | 56,277 | $ | 61,678 | ||||||||||||||||||
PARKER DRILLING COMPANY AND SUBSIDIARIES
Reconciliation of Non-Routine Items *
(Unaudited)
(Dollars in Thousands, except Per Share)
Reconciliation of Non-Routine Items *
(Unaudited)
(Dollars in Thousands, except Per Share)
Three Months Ending | ||||
March 31, 2009 | ||||
Net income | $ | 2,106 | ||
Earnings per diluted share | $ | 0.02 | ||
Adjustments: | ||||
DOJ investigation | 5,308 | |||
Total adjustments | $ | 5,308 | ||
Tax effect of non-routine adjustments | (1,858 | ) | ||
Net non-routine adjustments | $ | 3,450 | ||
Adjusted net income | $ | 5,556 | ||
Adjusted earnings per diluted share | $ | 0.05 | ||
Three Months Ending | ||||
March 31, 2008 | ||||
Previously reported net income | $ | 23,888 | ||
Previously reported earnings per diluted share | $ | 0.21 | ||
Restated interest expense, net of tax — per APB 14-1 | $ | (686 | ) | |
Restated net income | $ | 23,202 | ||
Restated earnings per share | $ | 0.21 | ||
Adjustments: | ||||
Saudi Arabia | $ | 1,105 | ||
FIN 48 tax benefit — Kazakhstan | (10,560 | ) | ||
PNG tax | 4,127 | |||
DOJ investigation | 441 | |||
Total adjustments | $ | (4,887 | ) | |
Tax effect of non-routine adjustments | (175 | ) | ||
Net non-routine adjustments | $ | (5,062 | ) | |
Adjusted net income | $ | 18,140 | ||
Adjusted earnings per diluted share | $ | 0.16 | ||
* | Adjusted net income, a non-GAAP financial measure, excludes items that management believes are of a non-routine nature and which detract from an understanding of normal operating performance and comparisons with other periods. Management also believes that results excluding these items are more comparable to estimates provided by securities analysts and used by them in evaluating the Company’s performance. |