President and CEO Terry Hall Comments
President and CEO Terry Hall commented, "Gulf of Mexico activity levels through much of the first quarter remained weak before bottoming in late February. In March, however, we benefited significantly from employing our bundled services concept to abandon wells owned by SPN Resources and from an improving production-related services market. Our average liftboat utilization rebounded in March to its highest level since this past October, with utilization of more than 70% for the month. Also, in rental tools, we again set a quarterly record for revenue as deepwater projects and increased land drilling drove demand for drill pipe and stabilizers.
"Clearly, we are entering the second quarter on much stronger footing than we experienced for most of the first quarter. Well intervention activity and tool rentals are higher in April as compared to March. Although the liftboat market still remains highly competitive, we are experiencing longer-term projects for some of our liftboats, which should help utilization in certain classes."
Well Intervention Group Segment
First quarter revenues for the Well Intervention Group were $44.3 million, an 11% decrease from the fourth quarter of 2003. On a sequential basis, activity decreased for most production-related services, with the exception of mechanical wireline services, which benefited from several high pressure projects.
Rental Tools Segment
Revenues for the Rental Tools segment were a record $38.7 million, 11% higher than the fourth quarter of 2003, and 6% higher than the prior record of $36.4 million established in the second quarter of 2003. Rentals of stabilizers, drill pipe and accessories to customers in the U.S. land and Gulf of Mexico deepwater markets steadily increased throughout the quarter. The company rented its first drill pipe and handling tools in the West Africa market area. In addition, demand increased for rentals and services associated with refinery and plant projects, including bolting, torque services and on-site machining.
Superior's marine revenues were $13.6 million, a 15% decrease as compared to the fourth quarter of 2003. Average fleet utilization was 64% as compared to 66% for the fourth quarter of 2003. Liftboat utilization showed improvement beginning in mid-February and increased for the remainder of the quarter. Average liftboat dayrates decreased approximately 5% as compared to the fourth quarter of 2003.
Liftboat Average Dayrates and Utilization by Class Size Three Months Ended March 31, 2004 ($ actual) Class Liftboats Average Dayrate Utilization ----- --------- --------------- ----------- 105' 6 $ 2,708 49.8% 120-135' 8 3,384 67.0% 145-155' 11 4,190 67.8% 160'-175' 6 5,739 61.9% 200' 2 8,957 60.4% 230'-245' 3 11,318 72.8% 250' 2 16,105 78.0%
Other Oilfield Services Segment
Revenues in this segment were $19.9 million, a 3% increase as compared to the fourth quarter of 2003. The sequential improvement was due primarily to increased activity for waste disposal, dockside cleaning and other environmental services.
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