Pride's Q4 Offshore Operations Take a Dive Due to Down-Time

Pride International's Offshore Drilling Segment reported revenues for the three months ended December 31, 2007 of $473.8 million, compared to $509.7 million in the third quarter of 2007, while earnings from operations were $202.3 million, compared to $212.2 million over the same comparative period. Results for the quarter were negatively impacted by planned out-of-service time, repairs and maintenance involving several rigs in the company's deepwater, midwater and jackup fleets, resulting in a slight decline in fleet utilization to 72 percent in the fourth quarter of 2007 from 75 percent in the previous quarter of 2007.

The earnings decline was partially offset by lower operating costs, which fell to $242.9 million in the fourth quarter of 2007, from $250.4 million in the third quarter of 2007. The three percent decline was attributable to reduced activity in both the company's jackup rig fleet, resulting in part from the mobilizations of two jackup rigs to Mexico from the U.S. Gulf, and the midwater rig fleet, resulting from shipyard programs on two rigs.

Revenues from the company's deepwater fleet, comprised of two drillships and six semisubmersible rigs, were $163.0 million during the three months ended December 31, 2007, compared to revenues of $176.1 million during the third quarter of 2007. Lower fleet utilization was the primary cause of the decline, settling at 88 percent in the fourth quarter of 2007 compared to 99 percent in the preceding quarter of 2007, due chiefly to 68 days of out-of-service time for repairs on the semisubmersible rig Pride Rio de Janeiro.

The rig returned to service at the end of January, 2008. Earnings from operations were $68.8 million in the fourth quarter of 2007, compared to $80.4 million during the third quarter of 2007, while earnings before interest, taxes, depreciation and amortization (EBITDA) were $87.1 million compared to $99.1 million over the same comparative period. Average daily revenues were $251,300 in the fourth quarter of 2007, up from $242,500 in the preceding quarter of 2007.

Revenues from the company's midwater fleet, comprised of six semisubmersible rigs, were $70.6 million during the three months ended December 31, 2007, compared to $88.0 million in the preceding quarter of 2007. Earnings from operations were $26.0 million compared to $43.1 million, and EBITDA was $34.1 million compared to $50.8 million over the same comparative period. The decline was primarily caused by planned out-of-service time on the Pride South America and Pride South Seas.

The Pride South America returned to service in October 2007, while the Pride South Seas is expected to return to service during March 2008. Due significantly to the out-of-service time on both units and on the Pride Mexico, while the rig completes an upgrade ahead of a five-year contract in Brazil, utilization in the fourth quarter of 2008 declined to 59 percent from 74 percent in the preceding quarter of 2007. The average daily revenue for the midwater fleet was largely unchanged in the fourth quarter of 2007, at $215,200 per day compared to $215,900 per day in the preceding quarter in 2007.

Revenues from the company's 28-rig jackup fleet were $193.1 million in the fourth quarter of 2007, compared to $205.5 million in the preceding quarter of 2007. Earnings from operations over the same comparative period were $77.4 million, compared to $88.8 million, while EBITDA was $98.1 million compared to $107.5 million. The declines were primarily due to lower utilization of the company's U.S. and Mexico-based fleets. Utilization of the U.S. Gulf of Mexico fleet declined to 58 percent in the fourth quarter of 2007 from 68 percent in the preceding quarter of 2007, due in part to fewer days worked by the Pride Missouri, which completed a planned shipyard program, the Pride Florida and the Pride Utah, which was cold stacked in September 2007.

Average daily revenues for the U.S. Gulf of Mexico jackup rig fleet declined slightly to $79,900 from $81,200 over the same comparative period. Utilization of the company's international jackup rig fleet declined to 87 percent in the fourth quarter of 2007, from 89 percent in the preceding quarter of 2007.

The decline was due in part to planned out-of-service time on the Pride Cabinda ahead of the rig's next contract commitment, and fewer days worked for the company's Mexico-based jackup fleet due to required repairs on three units, partially offset by the return to service of the Pride Texas following the completion of a life enhancement program during the third quarter of 2007 and the relocation of the Pride Mississippi and Pride Oklahoma from the U.S. Gulf of Mexico. Average daily revenues were $105,000 in the fourth quarter of 2007 compared to $107,400 in the preceding quarter of 2007.

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