Parker Drilling Reports Third Quarter Results
Parker Drilling Company
|Tuesday, November 02, 2004
For the quarter ended September 30, 2004, Parker Drilling Company (NYSE: PKD) reported revenues of $87.9 million and a net loss of $22.1 million, or $0.23 per share, compared to a net loss of $6.7 million or $0.07 per share on revenues of $82.9 million for the third quarter of 2003. The loss from continuing operations for the third quarter of 2004 was $23.4 million or $0.25 per share compared to a loss from continuing operations of $8.8 million or $0.09 per share for the third quarter of 2003.
As reflected in the Company's recent press release, third quarter operating results were negatively impacted by lack of activity in the international offshore segment, which for the third quarter more than offset improved utilization and dayrates in the US drilling market and increased rental tool activity. Also contributing to the third quarter loss were non- routine costs totaling $10.3 million or $0.11 per share. The Company incurred charges of approximately $8.2 million relating to the issuance of $150 million of Senior Floating Rate Notes on September 2, 2004, the purchase of $80 million of the Company's 10.125% Senior Notes and the pay off of its $70 million Term Loan. These charges included a 6.54% premium paid on the purchase of $80 million of the Company's 10.125% Senior Notes tendered pursuant to a tender offer dated August 6, 2004, the write-off of debt issuance costs associated with the debt paid down, and legal and other fees. In addition, the Mangistau Oblast Court of the Republic of Kazakhstan confirmed the settlement for duties and taxes assessed by the Mangistau Customs Control in connection with the temporary import status of barge rig 257, resulting in a charge of $2.1 million. Though the short term cash impact was $3.9 million for the settlement, $1.8 million is expected to be recaptured through reduced VAT payments over the next six months. The settlement released all claims of the Kazakhstan customs authorities and the rig is free to move from port and is expected to commence operations during the fourth quarter.
For the first nine months of 2004, Parker Drilling reported revenues of $266.7 million and a net loss of $40.5 million or $0.43 per share. For the first nine months of 2003, Parker Drilling reported revenues of $247.1 million and a net loss of $97.3 million or $1.04 per share, which included a $54.0 million or $0.58 per share impairment for assets held for sale. The loss from continuing operations for the first nine months of 2004 was $47.0 million or $0.50 per share compared to a loss from continuing operations of $37.3 million or $0.40 per share for the first nine months of 2003. Reported earnings for both current year and prior year reflect a reclassification of Latin America operations from discontinued operations to continuing operations due primarily to the Company obtaining contracts in Mexico utilizing seven of the rigs previously classified as discontinued operations. The reclassification resulted in an impairment of $5.1 million during the second quarter of 2004. In addition to the $10.3 million non- routine charges in the third quarter of 2004, earlier in the year the Company incurred other non-routine costs of $5.2 million relating to personnel severance costs, an adjustment to a life insurance asset and an additional VAT assessment in Nigeria.
Third quarter average utilization of international land rigs rose to 54 percent from 43 percent during the second quarter of 2004, a significant increase from the 29 percent reported for the third quarter of 2003. Average utilization of Parker Drilling's Gulf of Mexico barge rigs also increased during the third quarter of 2004 to 66 percent, compared to an average utilization of 60 percent in the second quarter of 2004 and 40 percent for the third quarter of 2003. Current utilization is 70 percent for the Gulf of Mexico barge rigs.
Capital expenditures for the nine months ended September 30, 2004, were $34.8 million. Total debt was $481.1 million at September 30, 2004, and the Company's cash balance was $38.8 million.