Earnings before interest, taxes, depreciation and amortization (EBITDA) were $53.2 million for the third quarter of 2006, 24 percent higher than the $42.8 million reported in the third quarter of 2005. Significantly higher dayrates resulted in a 68 percent EBITDA improvement for Parker's U.S. Gulf of Mexico barge rigs over the prior year's quarter. Quail Tools also showed an improvement, with a 51 percent increase from the prior year's quarter. For the first nine months of 2006, EBITDA was $153.3 million, a 30 percent increase over the $117.7 million for 2005. (The details of the EBITDA calculation, a non-GAAP financial measure, for the current and prior eight quarters are defined and reconciled later in this press release to their most directly comparable GAAP financial measure.)
For the first nine months of 2006, Parker Drilling reported revenues of $440.1 million and net income of $43.9 million or $0.41 per diluted share compared to revenues of $382.1 million and net income of $42.2 million or $0.43 per diluted share for the first nine months of 2005. Included in 2006 results are income of $0.02 per diluted share from non-routine items and $0.29 per share of non-cash deferred tax expense compared to income from non-routine items of $0.10 per diluted share and no deferred tax expense in 2005.
The average utilization of international land rigs for the third quarter of 2006 decreased to 55 percent from the 83 percent reported for the third quarter of 2005. This decrease is attributed to ten rigs that completed contracts in Mexico and Turkmenistan earlier this year. However, fourth quarter land rig revenue will increase as five of the ten rigs will commence new, long-term contracts at increased dayrates averaging more than 75 percent above previous contracted terms. The remaining rigs are currently being marketed and are expected to return to work in the fourth quarter and into 2007 at significantly higher dayrates.
Average utilization for the Gulf of Mexico barge rigs for the third quarter of 2006 was 72 percent, compared to 78 percent reported for the third quarter of 2005. The slight decline in utilization is primarily attributable to two deep barge rigs that were in shipyard during the quarter for upgrades and scheduled preventive maintenance. Deep barge rig 54 completed its upgrade program and scheduled preventive maintenance and re-entered the fleet in August under a one-year contract, and deep barge rig 50 will complete its upgrade program in November, and will mobilize for a three-month contract.
The Company's deep drilling barge dayrates in the Gulf of Mexico averaged a record $45,800 per day during the third quarter of 2006, up approximately 53 percent, or $15,900 per day, from the third quarter of 2005 and approximately 13 percent, or $5,400 per day, above the second quarter of 2006. Average dayrates for each classification of barge by quarter are available on Parker's website and can be viewed or downloaded by going to "Investor Relations" and then to "Dayrates - GOM."
Quail Tools, Parker Drilling's drilling and production rental tools subsidiary, continued its outstanding performance as it posted its third consecutive quarterly record with revenues of $32.8 million. In addition to increased market penetration and new customers, results were fueled by new inventory purchased as a result of Parker's 2006 capital expansion program, which significantly increased rental tool availability. Quail's new operating facility in Northeast Texas is on track to open in early 2007, and will provide increased coverage of the Barnett Shale area and Fayetteville Shale area in Arkansas, in addition to the East Texas and Oklahoma markets.
"Parker delivered another solid quarter, posting records in our two U.S. segments and making good progress towards returning rigs to work at significantly improved dayrates in our international markets," said Robert L. Parker Jr., chairman, president and chief executive officer. "Revenues remain steady despite lower international utilization, and will improve significantly as the new contracts commence work.
"We expect to continue to realize strong contributions from the U.S. business segments throughout the remainder of 2006 and into 2007 based on customer feedback and our success in securing term contracts for our deep barges.
"As we progress in our five-year strategic plan that includes growing a fleet of preferred drilling rigs, focusing on markets that have long-term exploration and development opportunities, and growing the Company's rental tool business, we are excited about the many opportunities created by the plan for all of our business segments," Parker concluded.
Capital expenditures for the nine months ended September 30, 2006 were $129.0 million. Total debt was $329.5 million at September 30, 2006, and the Company's cash balance, including marketable securities, was $172.3 million.
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