Exhibit 99
[Logo]RPC
An Oil & Gas Services Company
FOR IMMEDIATE RELEASE
RPC, Inc. Announces a Long-Term Growth Plan and Higher Capital Expenditures
ATLANTA, July 26, 2006 -- RPC, Inc. (NYSE: RES) announced today its' long-term
growth plan under which it will expand its' revenue-producing equipment to take
advantage of opportunities in the domestic oilfield for its' largest and most
profitable service lines. RPC has carefully formulated a plan which includes
capital expenditures during 2006 through 2008 of approximately $700 million. The
capital expenditures will be used to increase capacity in RPC's largest service
lines, as well as provide for selective geographic expansion of its current
domestic service areas.
Portions of RPC's current growth plans include the following which are subject
to the timing of equipment deliveries and future industry conditions:
Capital Expenditures
(millions)
2006 2007
---- ----
Pressure Pumping/Fracturing $95 $82
Coiled Tubing/ Fluid Pumping 21 72
Nitrogen Pumping 20 58
Snubbing/Hydraulic Workover 13 23
Rental Tools 30 13
Other, including maintenance 43 60
---- ----
Total $222 $308
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The Company is selecting a group of banks that will put a credit facility in
place that will allow for up to $200 million in borrowings to achieve these
plans. The revolving credit facility will have a five-year term and will allow
RPC to borrow and repay principal during the term without penalties. The
interest rate is a floating rate based on current market rates, although RPC
expects to hedge a portion of the potential volatility of these interest
payments by engaging in one or more swap agreements.
Richard A. Hubbell, RPC's President and Chief Executive Officer, stated, "The
plan to grow our company at a higher rate than in the past, and to seek outside
financing to accomplish it, is an important step along RPC's path to become a
larger, stronger oilfield services company. As we stated during our first
quarter conference call, we have planned for some time to make increased capital
expenditures in 2006 and subsequent years. As we also announced today, our
results during the current year continue to be strong. The continued strength in
the oilfield, along with our confidence in our market position and financial
performance of our largest service lines have prompted us to engage in this more
aggressive long-term expansion effort. RPC is more focused than in the past, and
we have the management structure and talent in place now which will allow us to
successfully execute our plans. We have been preparing for this expansion for a
number of months, and anticipate that we will place in service a large amount of
pressure pumping equipment in the fourth quarter of 2006. This will be followed
by additional revenue-producing and ancillary equipment in our largest service
lines throughout 2007 and into 2008. Through the implementation of this
three-year growth plan, we are building on the successes of our strategy of
focusing on our larger service lines, which we can manage for revenue and profit
growth and high returns on invested capital.
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July 26, 2006 Growth Plan Press Release
Hubbell continued, "The resulting capital structure to achieve with these growth
plans departs from our tradition of maintaining a balance sheet that is
virtually debt-free. We made this decision based on very careful planning and
our confidence in our strong management teams operating a profitable group of
service lines. Our projected capital structure will still be conservative,
compared to many in our industry, and we believe that we can employ this capital
to create a larger, more profitable company, while still managing through the
volatility of the oilfield services business."
RPC provides a broad range of specialized oilfield services and equipment
primarily to independent and major oilfield companies engaged in the
exploration, production and development of oil and gas properties throughout the
United States, including the Gulf of Mexico, mid-continent, southwest and Rocky
Mountain regions, and in selected international markets. RPC's investor website
can be found at www.rpc.net.
Certain statements and information included in this press release constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements include
statements regarding RPC's expected activity and performance in the future, such
as the ability raise capital from outside financing sources and the ability to
purchase and place in service large amounts of new equipment. These statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of RPC to be materially
different from any future results, performance or achievements expressed or
implied in such forward-looking statements. Such risks include the possibility
of declines in the price of oil and natural gas, which tend to result in a
decrease in drilling activity and therefore a decline in the demand for our
services, the ability to raise additional capital from outside financing
sources, market interest rates, our ability to hedge against fluctuations in
interest rates, the ability to purchase large amounts of equipment and
successfully place such equipment in service, adverse weather conditions in oil
or gas producing regions, including the Gulf of Mexico, and competition in the
oil and gas industry. Additional discussion of factors that could cause the
actual results to differ materially from management's projections, forecasts,
estimates and expectations is contained in RPC's Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 2005.
For information about RPC, Inc., please contact:
Ben M. Palmer
Chief Financial Officer
404.321.2140
irdept@rpc.net
Jim Landers
Corporate Finance
404.321.2162
jlanders@rpc.net