Due to the impairment charge, the Company recorded a loss for its fourth fiscal quarter 2004 of $12,624,000 ($0.25 per diluted share) from revenues of $181,410,000, compared with net income of $6,530,000 ($0.13 per diluted share) from revenues of $138,626,000 for last year's fourth quarter. Included in fourth quarter results were gains from the sale of portfolio securities of $0.16 per share for 2004, and $0.06 per share in 2003.
Operating profit in the Company's U.S. land rig operations increased to $14,439,000 for the fourth quarter of fiscal 2004, from $6,361,000 for the same period last year, and from $9,579,000 for this year's third quarter. Average fourth quarter revenue per rig day rose to $12,517 and cash margins per rig day to $4,303, compared with $11,550 revenue per rig day and $3,657 cash margins per rig day for the previous quarter. Average U.S. land rig utilization during the fourth quarter of 2004 was 92%, compared with 83% during last year's fourth quarter, and 89% during this year's third quarter.
The Company's offshore platform rig business reported an operating loss of $47,180,000 for the fourth quarter 2004, compared with an operating profit of $8,860,000 for the fourth quarter of fiscal 2003, and operating profit of $3,826,000 for this year's third quarter. For quarterly comparisons, the offshore operations would have reported an operating profit of $4,336,000 for the fourth quarter of 2004 without the $51,516,000 impairment charge. Rig utilization was 54% during the quarter, compared with 48% during last year's fourth quarter, and 52% during this year's third quarter. As previously announced, the Company retired Rig 108 and currently has five active offshore platform rigs out of its eleven available offshore platform rigs in the Gulf of Mexico.
International operating profit improved significantly during the fourth quarter of 2004 to $6,936,000, from $609,000 for last year's fourth quarter, and $1,756,000 for this year's third quarter. In addition to improved operating profit in Venezuela, Ecuador, Argentina and Equatorial Guinea, this quarter's operating profit included a pre-tax gain of $1,682,000 from an insurance settlement resulting from rig damage sustained earlier in the year. Fourth quarter cash margins per rig day were $6,048 (excluding effects of the previously mentioned insurance gain), down slightly from $6,103 per rig day during last year's fourth quarter, but up from the $4,257 per day recorded during this year's third quarter. Additionally, rig utilization for international operations rose to 57% for the quarter, up from 38% during last year's fourth quarter, and 53% during this year's third quarter. The Company has recently shipped five rigs from international locations to the U.S. with four now in transit and one being mobilized for work in Florida. Of the 27 rigs now in international locations, 24 are currently working or committed for work.
Company President and C.E.O., Hans Helmerich commented: "The long-awaited tightening in the U.S. land rig market resulted in significant improvement of land rig revenue and margins per day. While the offshore platform rig business continues to underperform from year ago levels, operating profit (excluding the impairment charge) has been relatively flat for the past four quarters. We are encouraged by the improved operating profit and increased rig activity in both our U.S. and international land rig segments, and believe customer interest and market conditions bode well for 2005 and beyond."
Separately, the Company reported that during the year-end financial statement closing process, it identified an after-tax gain of $959,000 that related to a non-monetary exchange of an investment security and that should have been recorded in the first quarter of 2004. First quarter net income, earlier reported as $5,629,000 ($0.11 per diluted share), will be reported as $6,588,000 ($0.13 per diluted share) in all future public filings.
Helmerich & Payne, Inc. (HP/NYSE) is a contract drilling company that owns 90 U.S. land rigs, 11 U.S. offshore platform rigs located in the Gulf of Mexico, 26 rigs located in South America, one rig in Hungary and 2 rigs in transit to the U.S. from international operations, for a total of 130 rigs. Included in the total fleet of 130 rigs are 50 H&P-designed and operated FlexRigs.
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