Parker Drilling Reports First Quarter Earnings
Parker Drilling Company announced a net loss of $11.1 million, or $0.12 per share, on unaudited revenues of $97.5 million for the first quarter of 2002. This compares to net income of $1.5 million or $0.02 per share on unaudited revenues of $114.9 million for the first quarter of 2001.
"We continue to make progress on our goal of putting international land rigs to work. Since third quarter last year, we have increased international land rig utilization by 33 percent and revenues continue to come in strong," said Robert L. Parker Jr., president and CEO. "I am excited about the new contracts we have to build and operate a world-class drilling rig for the Sakhalin I Consortium in Russia. This rig, which will be owned by the Consortium, allows us to showcase our engineering expertise and expand our worldwide operations presence without investing our own capital."
Utilization of the company's international land rigs currently is 49 percent. Average utilization was 47 percent in the first quarter of 2002 compared to average utilization of 44 percent for the fourth quarter of 2001.
"The growing strength of our international operations is being offset by the weakness in the Gulf of Mexico gas market," Parker said. "However, we are in the beginning stages of a recovery in the Gulf, evidenced by higher rig utilization in the Gulf of Mexico jackup and barge rig markets."
Utilization of Parker Drilling's Gulf of Mexico rigs is currently 55 percent. Average utilization was 41 percent in the first quarter of 2002 compared to an average utilization of 51 percent in the fourth quarter of 2001.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $26.4 million for the first quarter of 2002. This compares to EBITDA of $34.2 million for the fourth quarter of 2001, and $40.5 million for the first quarter of 2001.
Capital expenditures for the three months ended March 31, 2002, were $12.7 million. Total debt was $589.2 million at March 31, 2002, and the company's cash balance was $60.9 million at the end of the first quarter.
Management believes that utilization of the company's Gulf of Mexico fleet will show modest increases in the second quarter and larger increases in the second half of the year. However, the company doesn't expect to see significant increases in barge and jackup rig dayrates until utilization reaches higher levels. Based on this view of the market, management anticipates EBITDA and net income for the second quarter will approximate first quarter, and results for the year will fall in the lower half of the range of earnings guidance given last quarter of $125 million to $150 million for EBITDA and a loss of $20 million to breakeven for net income.
Parker Drilling expects capital expenditures to be approximately $50 million for 2002. This level of expenditures is substantially lower than in 2001 and prior years, and will free up cash to reduce debt.