Pride International Reports Second Quarter Results
Pride International, Inc. late Tuesday reported net earnings for the second quarter 2006 of $67.8 million ($0.39 per diluted share) on record revenues of $616.5 million. For the second quarter 2005, Pride reported net earnings of $0.8 million ($.01 per diluted share) on revenues of $477.3 million. For the six-month period ended June 30, 2006, Pride reported net earnings of $138.3 million ($0.80 per diluted share) on revenues of $1,183.4 million. For the corresponding six- month period in 2005, Pride reported net earnings of $19.1 million ($0.13 per diluted share) on revenues of $943.5 million.
Results for the second quarter 2006 included expenditures relating to the Audit Committee's ongoing investigation and gains on sales of assets that, in total, reduced net earnings by $4.0 million ($.02 per diluted share) after tax. The second quarter 2005 included executive severance charges and a loss on sale of assets that totaled $17.1 million ($.11 per diluted share) after tax.
The Company achieved record revenues in the second quarter as dayrates increased across all of the Company's operating segments. Leading the increase were the Company's jackups operating in the U.S. Gulf of Mexico, where average daily revenue per rig increased to $108,700 compared to $43,400 in the second quarter 2005 and $91,800 in the first quarter 2006. Average daily revenue for the Company's drillships and semisubmersibles increased to $142,500 compared to $127,100 in the second quarter 2005 and $135,800 in the first quarter 2006. During the second quarter 2006, utilization for drillships and semisubmersibles was 86% compared to 90% in the first quarter 2006, and utilization for jackups was 88% and 93% during the same periods, respectively, due to an increase in planned shipyard days for special periodic rig surveys.
Revenues for the Company's Latin America Land segment in the second quarter 2006 increased to $151.1 million compared to $121.9 million in the second quarter 2005 and $135.8 million in the first quarter 2006. The increase in revenue was driven by increased dayrates and operating days primarily in Argentina, Colombia, and Venezuela. Revenues for the Company's E&P Services segment increased to $50.9 million in the second quarter 2006 as compared to $50.4 million in the second quarter 2005 and $39.7 million in the first quarter 2006. Utilization increased during the second quarter, following the first quarter resolution of general labor disruptions in Argentina.
Consolidated earnings from operations for the second quarter 2006 totaled $125.2 million, as compared to $49.3 million in the second quarter 2005 and $129.8 million in the first quarter 2006. Earnings from operations during these time periods included: expenses relating to the Audit Committee's ongoing investigation totaling $8.7 million and gains on asset sales of $1.7 million in the second quarter 2006; Audit Committee investigation expenses of $0.9 million and gains on asset sales of $26.7 million in the first quarter 2006; and executive severance charges of $10.8 million and a loss on sale of assets of $2.6 million in the second quarter 2005. Excluding these items, operating results for the second quarter 2006 increased $69.5 million, or 111%, over the prior year and $28.2 million, or 27%, sequentially.
At June 30, 2006, the Company's consolidated balance sheet reflected $1.1 billion in total debt and $103 million in cash and cash equivalents. The Company invested $124 million in capital expenditures in the second quarter and $167 million for the six months ended June 30, 2006, while reducing debt by an additional $168 million and increasing cash by $56 million during the six-month period.
Louis A. Raspino, President and Chief Executive Officer, commented, "Our second quarter financial results reflect the strength of worldwide drilling demand and limited rig availability. While we are currently observing some seasonal softness in the U.S. Gulf of Mexico, our exposure to dayrate fluctuations is somewhat limited in the near term. Also, we are confident that rig supply and demand dynamics in the Gulf will remain highly favorable after this year's hurricane season. Globally, we expect the strong demand for drilling services to be sustained well beyond next year, and our financial performance should continue to improve as our fleet rolls to new contracts or reprices at leading edge rates. Our current contract backlog of $3.1 billion across our worldwide offshore fleet is the highest in the history of our company."