Exhibit 99.1
1105 Peters Road
Harvey, Louisiana 70058
(504) 362-4321
Fax (504) 362-1818
NYSE: SPN
Harvey, Louisiana 70058
(504) 362-4321
Fax (504) 362-1818
NYSE: SPN
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
Terence Hall, CEO; Robert Taylor, CFO;
Greg Rosenstein, VP of Investor Relations, 504-362-4321
Terence Hall, CEO; Robert Taylor, CFO;
Greg Rosenstein, VP of Investor Relations, 504-362-4321
Superior Energy Services, Inc. Announces Fourth Quarter 2005 Results, Year-Over-Year
Fourth Quarter Earnings Per Share Grow 25 Percent
Fourth Quarter Earnings Per Share Grow 25 Percent
(Harvey, La., Thursday, February 23, 2006) Superior Energy Services, Inc. (NYSE: SPN) today announced fourth quarter net income, excluding gains and losses net of income taxes, of $18.5 million or $0.23 diluted earnings per share on revenues of $188.0 million.
The fourth quarter results include a non-recurring, non-cash loss of $3.8 million as a result of the Company’s sale of its non-hazardous oilfield waste subsidiary for $18.7 million in cash, which closed today, and a $0.3 million gain from the finalization of the second quarter 2005 sale of 17 small liftboats. Including these gains and losses, fourth quarter net income was $16.2 million, or $0.20 diluted earnings per share, as compared to net income of $12.3 million, or $0.16 diluted earnings per share on revenues of $157.8 million for the fourth quarter of 2004, a 25% increase in diluted earnings per share.
For the year ended December 31, 2005, revenues were a record $735.3 million and net income was a record $67.9 million, or $0.85 diluted earnings per share, as compared to revenues of $564.3 million and net income of $35.9 million, or $0.47 diluted earnings per share, for the year ended December 31, 2004.
The fourth quarter was adversely impacted by ongoing hurricane-related repairs to the Company’s platforms and to pipelines owned by third parties, resulting in deferred oil and gas production of approximately 523,400 barrels of oil equivalent (‘boe”). In addition, the Company incurred approximately $4.6 million in operating expenses for repairs at its offshore oil and gas properties and $1.0 million in general and administrative expenses related to the 2005 hurricane season.
Chairman and CEO Terry Hall Comments
Chairman and CEO Terry Hall commented, “We are extremely pleased with these results, despite the fact that the strong Gulf of Mexico activity levels for services and rental tools we experienced before Hurricane Katrina did not begin to resume until mid-November. Gulf demand for many of our products and services exceeded pre-storm levels by year-end.
“Our Gulf of Mexico-based customers spent a significant part of the fourth quarter assessing and repairing damage from the active hurricane season. Also, our oil and gas production was significantly lower due to ongoing repairs at some of our properties. Only the marine segment
had a full quarter of strong activity levels as our liftboats supported damage assessment and hurricane-related construction work.
“In addition to strong performance from our marine segment, growth in our non-Gulf of Mexico markets was a major contributor to our quarterly results. For instance, international revenue was a quarterly record of $31.4 million, driven mainly by rental activity in the North Sea, the Middle East and West Africa, and well intervention activity in Australia, Egypt and Venezuela. For the year, international revenue was a record $99.3 million. International and domestic land markets will continue to represent a larger part of our business mix going forward as we diversify into growing markets with our rental tools and production-related services.
“We believe our outlook remains extremely favorable given the high year-end demand levels in the Gulf of Mexico, the geographic expansion of our rental and service footprint domestically onto land and our increasing international presence. The underlying factors helping to drive our growth remain firmly in place. As a result, we expect to achieve record financial performance in 2006.”
Well Intervention Group Segment
Fourth quarter revenues for the Well Intervention Group were a record $66.2 million. Although Gulf of Mexico pre-Hurricane Katrina demand did not resume until mid-quarter, revenue and income from operations improved over the third quarter of 2005. This was due primarily to higher activity levels for production-related services such as coiled tubing, electric line, mechanical wireline, hydraulic workover and well control services, as well as increased demand for plug and abandonment services.
By the end of the quarter, Gulf of Mexico-based, production-related services such as coiled tubing, electric line and mechanical wireline were experiencing demand that exceeded pre-storm levels. In addition, international activity increased significantly as compared to the third quarter for hydraulic workover services in Australia, Egypt and Venezuela, and well control services in Egypt.
Rental Tools Segment
Revenues for the Rental Tools segment were a record $68.1 million. Domestic land and international rentals offset hurricane-related Gulf of Mexico downtime. The Gulf market for several of our rental tools returned to pre-storm levels by mid-quarter. Rentals of specialty tubulars, drill pipe, drill collars, stabilizers and on-site accommodations on land and internationally helped drive this segment’s record performance. Revenues from domestic land and international markets were approximately $45 million as compared to $39 million in the third quarter of 2005.
Marine Segment
Marine revenues were a record $30.7 million as the Company’s liftboats continued to play an integral role in supporting hurricane-related damage assessment and construction-related work. Average fleet utilization was 90% as compared to 76% in the fourth quarter of 2004 and in the third quarter of 2005. Average daily revenue in the fourth quarter was approximately $333,900, inclusive of subsistence revenue.
Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended December 31, 2005
($ actual)
Three Months Ended December 31, 2005
($ actual)
| Average | ||||||||||||
| Class | Liftboats | Dayrate | Utilization | |||||||||
| 145-155’ | 11 | $ | 8,920 | 89.0 | % | |||||||
| 160’-175’ | 6 | 12,077 | 89.9 | % | ||||||||
| 200’ | 4 | 14,466 | 90.2 | % | ||||||||
| 230’-245’ | 3 | 22,831 | 85.9 | % | ||||||||
| 250’ | 2 | 28,339 | 99.5 | % | ||||||||
Other Oilfield Services
Revenues in this segment were $22.4 million, an 8% increase as compared to the fourth quarter of 2004 and essentially unchanged from the third quarter of 2005. Increases in property management services and volumes of non-hazardous oilfield waste lead to the year-over-year improvement.
Oil and Gas Segment
Oil and gas revenues were $1.7 million as compared to $11.5 million in the fourth quarter of 2004 and $21.8 million in the third quarter of 2005. Fourth quarter production from SPN Resources was approximately 104,500 boe as compared to approximately 289,400 boe in the fourth quarter of 2004 and approximately 426,800 boe in the third quarter of 2005. Fourth quarter production was significantly lower as compared to the fourth quarter last year and on a sequential basis as a result of deferred production of approximately 523,400 boe due to downtime related to repairs caused by the active 2005 hurricane season.
Current production is approximately 5,500 boe per day. The Company expects an additional 1,500 boe per day to come on-line by the end of the first quarter following repairs to third-party pipelines.
The Company will host a conference call at 10:30 a.m. Central Time on Friday, February 24. The call can be accessed from Superior’s website at www.superiorenergy.com, or by telephone at 800-763-5557. The replay telephone number is 800-642-1687 and the replay passcode is 5161688. The replay is available beginning two hours after the call and ending March 3, 2006.
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 property’s 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 Company’s rapid growth; 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 Superior or any other person that the projected outcomes can or will be achieved.
# # #
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Twelve Months Ended December 31, 2005 and 2004
(in thousands, except earnings per share amounts)
(unaudited, except as noted)
Consolidated Statements of Operations
Three and Twelve Months Ended December 31, 2005 and 2004
(in thousands, except earnings per share amounts)
(unaudited, except as noted)
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2005 | 2004 | 2005 | 2004 | |||||||||||||
| (audited) | ||||||||||||||||
| Oilfield service and rental revenues | $ | 186,272 | $ | 146,373 | $ | 656,423 | $ | 527,331 | ||||||||
| Oil and gas revenues | 1,714 | 11,462 | 78,911 | 37,008 | ||||||||||||
| Total revenues | 187,986 | 157,835 | 735,334 | 564,339 | ||||||||||||
| Cost of oilfield services and rentals | 86,997 | 75,571 | 330,200 | 288,561 | ||||||||||||
| Cost of oil and gas sales | 10,540 | 8,277 | 45,804 | 21,547 | ||||||||||||
| Total cost of services and sales | 97,537 | 83,848 | 376,004 | 310,108 | ||||||||||||
| Depreciation, depletion, amortization and accretion | 20,428 | 18,891 | 89,288 | 67,337 | ||||||||||||
| General and administrative expenses | 37,856 | 30,980 | 140,989 | 110,605 | ||||||||||||
| Reduction in value of assets | 3,750 | — | 6,994 | — | ||||||||||||
| Gain on sale of liftboats | 275 | — | 3,544 | — | ||||||||||||
| Income from operations | 28,690 | 24,116 | 125,603 | 76,289 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (5,332 | ) | (5,752 | ) | (21,862 | ) | (22,476 | ) | ||||||||
| Interest income | 731 | 401 | 2,201 | 1,766 | ||||||||||||
| Equity in income of affiliates | 3 | 437 | 1,339 | 1,329 | ||||||||||||
| Reduction in value of investment in affiliate | — | — | (1,250 | ) | — | |||||||||||
| Income before income taxes | 24,092 | 19,202 | 106,031 | 56,908 | ||||||||||||
| Income taxes | 7,854 | 6,916 | 38,172 | 21,056 | ||||||||||||
| Net income | $ | 16,238 | $ | 12,286 | $ | 67,859 | $ | 35,852 | ||||||||
| Basic earnings per share | $ | 0.20 | $ | 0.16 | $ | 0.87 | $ | 0.48 | ||||||||
| Diluted earnings per share | $ | 0.20 | $ | 0.16 | $ | 0.85 | $ | 0.47 | ||||||||
| Weighted average common shares used in computing earnings per share: | ||||||||||||||||
| Basic | 79,464 | 76,163 | 78,321 | 74,896 | ||||||||||||
| Diluted | 80,621 | 77,618 | 79,735 | 75,900 | ||||||||||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2005 AND 2004
(in thousands)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2005 AND 2004
(in thousands)
| 12/31/2005 | 12/31/2004 | |||||||
| (unaudited) | (audited) | |||||||
ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 54,457 | $ | 15,281 | ||||
| Accounts receivable — net | 196,365 | 156,235 | ||||||
| Income taxes receivable | — | 2,694 | ||||||
| Notes receivable | 2,364 | 9,611 | ||||||
| Prepaid insurance and other | 51,116 | 28,203 | ||||||
| Total current assets | 304,302 | 212,024 | ||||||
| Property, plant and equipment — net | 534,962 | 515,151 | ||||||
| Goodwill — net | 220,064 | 226,593 | ||||||
| Notes receivable | 29,483 | 29,131 | ||||||
| Investments in affiliates | — | 13,552 | ||||||
| Other assets — net | 8,439 | 7,462 | ||||||
| Total assets | $ | 1,097,250 | $ | 1,003,913 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 42,035 | $ | 36,496 | ||||
| Accrued expenses | 69,926 | 56,796 | ||||||
| Income taxes payable | 11,353 | — | ||||||
| Fair value of commodity derivative instruments | 10,792 | 2,018 | ||||||
| Current portion of decommissioning liabilities | 14,268 | 23,588 | ||||||
| Current maturities of long-term debt | 810 | 11,810 | ||||||
| Total current liabilities | 149,184 | 130,708 | ||||||
| Deferred income taxes | 97,987 | 103,372 | ||||||
| Decommissioning liabilities | 107,641 | 90,430 | ||||||
| Long-term debt | 216,596 | 244,906 | ||||||
| Other long-term liabilities | 1,468 | 618 | ||||||
| Total stockholders’ equity | 524,374 | 433,879 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,097,250 | $ | 1,003,913 | ||||
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended December 31, 2005, September 30, 2005, and December 31, 2004
(Unaudited)
(in thousands)
Segment Highlights
Three months ended December 31, 2005, September 30, 2005, and December 31, 2004
(Unaudited)
(in thousands)
| Three months ended, | ||||||||||||
| December 31, 2005 | September 30, 2005 | December 31, 2004 | ||||||||||
Revenue | ||||||||||||
| Well Intervention | $ | 66,228 | $ | 63,361 | $ | 62,779 | ||||||
| Rental tools | 68,101 | 61,686 | 44,971 | |||||||||
| Marine | 30,717 | 18,467 | 20,456 | |||||||||
| Other Oilfield Services | 22,398 | 22,487 | 20,789 | |||||||||
| Oil and Gas | 1,714 | 21,764 | 11,462 | |||||||||
| Less: Oil and Gas Eliminations (2) | (1,172 | ) | (3,664 | ) | (2,622 | ) | ||||||
| Total Revenues | $ | 187,986 | $ | 184,101 | $ | 157,835 | ||||||
| Three months ended, | ||||||||||||
| December 31, 2005 | September 30, 2005 | December 31, 2004 | ||||||||||
Gross Profit (1) | ||||||||||||
| Well Intervention | $ | 31,615 | $ | 21,501 | $ | 29,154 | ||||||
| Rental tools | 43,942 | 39,694 | 29,731 | |||||||||
| Marine | 18,963 | 6,628 | 7,357 | |||||||||
| Other Oilfield Services | 4,755 | 4,485 | 4,560 | |||||||||
| Oil and Gas | (8,826 | ) | 10,396 | 3,185 | ||||||||
| Total Gross Profit | $ | 90,449 | $ | 82,704 | $ | 73,987 | ||||||
| (1) | Gross profit is calculated by subtracting cost of services from revenue for each of the Company’s five segments. | |
| (2) | Oil and gas eliminations represent products and services from the company’s segments provided to the Oil and Gas Segment. |