Pride International Reports First Quarter Results
Pride International, Inc. (NYSE: PDE) reported net earnings and income from continuing operations for the first quarter of 2005 of $16,323,000 ($.11 per diluted share) on revenues of $467,509,000. For the same period in 2004, Pride reported a net loss of $5,900,000 ($.04 per diluted share) and income from continuing operations of $4,660,000 ($.03 per diluted share) on revenues of $403,675,000.
Results for the first quarter of 2005 included a gain on sale of assets, net of tax, of $3,626,000 and non-cash charges of $707,000, net of tax, related to the early retirement of debt. These items collectively increased diluted earnings per share by $.01.
Demand for the Company's drilling rigs continued to improve during the first quarter of 2005, as consolidated operating income (excluding the effects of asset sales in both periods and impairment charges in the earlier quarter) increased 19% over the fourth quarter of 2004.
In the U.S. Gulf of Mexico segment, operating income (excluding the 2004 impairment charges and gain from sale of assets) for the quarter improved 24% over the fourth quarter of 2004 due to improving dayrates and the operation of one additional jackup. Average daily jackup revenues during the first quarter of 2005 increased to $38,200, up from $35,000 during the fourth quarter of 2004 and $27,700 during the first quarter of 2004. Of the Company's ten jackups located in the U.S. Gulf of Mexico, nine are operating, and the remaining rig is contracted to begin work during the second quarter of 2005.
The Company's Latin America Land segment increased operating income (excluding the 2004 impairment charges) 62% sequentially as a result of increased utilization and pricing driven by strong demand throughout the region. Drilling and workover activity in Argentina reached record levels during the quarter. Operating income for the E&P Services segment increased 6% from the fourth quarter of 2004, reflecting continued strong market conditions.
For the Eastern Hemisphere segment, operating income (excluding the effects of asset sales in both periods and impairment charges in the earlier quarter) increased 11% from the fourth quarter of 2004, driven partly by the return of the drillship 'Pride Africa' to service following planned shipyard maintenance in the fourth quarter. Also, the previously idle semisubmersible 'Pride Venezuela' commenced operations in the first quarter, and the deepwater semisubmersible 'Pride South Pacific' worked at a significantly higher dayrate.
The Western Hemisphere segment's operating income declined 16% from the fourth quarter due to the redeployment of a jackup and two semisubmersibles to other business segments and reduced profitability related to two managed jackups.
In the first quarter of 2005, a foreign subsidiary of the Company sold the Energy Explorer IV (Pride Ohio) and received $40 million in cash. The Company used the proceeds from this transaction to repay debt.
Also in the first quarter of 2005, the Company entered into agreements to sell the tender-assisted barge rigs 'Piranha' and 'Ile de Sein', currently working in Southeast Asia. Pursuant to these agreements, the sale of the 'Piranha' closed in April 2005, and the Company is working to complete the closing conditions for the sale of the 'Ile de Sein', which is anticipated to be completed late in the second quarter or early third quarter of 2005. Total proceeds for the two rigs are expected to be approximately $50 million in cash.
The Company reduced debt during the first quarter of 2005 by approximately $84 million. In addition, on March 25, 2005 the Company issued a call notice to redeem the remaining $298.6 million outstanding principal amount of its 2.5% Convertible Senior Notes Due 2007. During the call period, which ended April 25, 2005, substantially all of the notes were converted into approximately 18.1 million shares of common stock.
Since the beginning of 2004 through April 28, 2005, the Company has
reduced outstanding debt by approximately $700 million.