Hercules Offshore Reports 3Q Results
Hercules Offshore, Inc. reported income from continuing operations of $33.1 million, or $0.37 per diluted share on revenues of $315.7 million for the third quarter 2008, compared with income from continuing operations of $48.7 million, or $0.58 per diluted share, excluding charges, on revenues of $272.6 million for the third quarter 2007.
John Rynd, Chief Executive Officer and President of Hercules Offshore stated, "As previously announced, the active hurricane season in the U.S. Gulf of Mexico had an adverse impact on our third quarter results for all of our domestic segments. However, the significant amount of infrastructure repair work should result in an improved operating environment for our Domestic Liftboat segment through the first quarter of 2009. I am exceptionally pleased with the way our employees responded to Hurricanes Gustav and Ike, safely and efficiently evacuating approximately 1,400 employees from 42 rigs for both storms and 40 liftboats for Gustav and 30 liftboats for Ike, all without incident."
Rynd continued, "The global financial crisis and lower commodity prices will almost certainly result in a number of our customers reducing their capital spending in 2009. However, with our significant international contract backlog working mostly for national oil companies, coupled with our greater than $325 million in liquidity, nominal capital commitments and a debt structure with minimal scheduled principal maturities until 2013, we are well positioned for any downturn in our domestic customers' capital spending."
During the third quarter 2008, revenues from Domestic Offshore were $112.7 million compared to $99.6 million in the same prior year period due to stronger utilization and the addition of the Hercules 350 in June 2008. Utilization increased to 79.1% in the third quarter 2008 from 69.8% in the previous year, while average revenue per day per rig declined to $67,384 from $77,200 in the third quarter 2007. Operating income decreased to $31.3 million in the third quarter 2008 versus $36.7 million in the prior year period.
Revenues for International Offshore were $95.3 million for the quarter ended September 30, 2008, an increase of approximately 89% from the same period of 2007. Average revenue per rig per day increased to $130,704 from $85,735 in the comparable quarters of 2008 and 2007, respectively. These increases are largely a result of the addition of the Hercules 260 to the marketed fleet in April 2008, as well as significant dayrate increases for Hercules 156, 170 and 185. Utilization for the third quarter declined slightly to 94.3% from 100% in the third quarter 2007 due to downtime experienced on Hercules 206. Operating income increased by $12.5 million to $34.2 million in the third quarter compared to the same prior year period.
Inland recorded a decrease in revenues to $44.4 million in the third quarter 2008 compared with $53.6 million in the third quarter 2007. A decrease in inland drilling demand contributed to a decline in utilization to 77.6% versus 83.4% in the previous year and, an approximate $8,000 decline in average revenue per day per rig to $38,911 from $46,682 for the respective periods. This segment recorded an operating loss of $1.2 million in the period compared with operating income of $19.6 million in the third quarter 2007.
Domestic Liftboats posted revenues of $25.4 million for the third quarter 2008, down from $35.7 million in the third quarter 2007. Average revenue per day per liftboat decreased to $8,094 in the third quarter 2008 from $12,483 in the same period of 2007 while utilization increased to 81.1% from 67.5% in the same periods, respectively. Excluding the impact of the hurricanes our average revenue per day per liftboat for the third quarter of 2008 would have approximated $9,000. Operating income declined to $5.8 million in the third quarter of 2008 versus $12.5 million in the same quarter of 2007.
International Liftboats generated revenues of $20.3 million, a 12% increase from $18.1 million in the third quarter 2007 due to higher average revenue per day and the addition of the Blackjack, a 200 class vessel that entered our fleet in May 2008. Average revenue per day per liftboat was $17,780 in the third quarter of 2008, up from $13,080 per day in the third quarter 2007, stemming mainly from a dayrate increase for nine of our liftboats in July and five of our liftboats in September. Operating income for the period was $5.1 million, slightly down from $6.7 million in the comparable period of 2007 resulting from an increase in operating expenses.
The Company sold its nine land rigs and related equipment in the fourth quarter of 2007. The results of operations of the land rig operations are reflected in the Consolidated Statements of Operations as a discontinued operation for all periods presented.
At September 30, 2008, the Company's balance sheet reflected total assets of $4.0 billion, including cash and equivalents totaling $106.2 million, total debt of $1.2 billion and stockholders' equity of $2.0 billion.
- C&J Energy Files for Bankruptcy to Cut $1.4B in Debt (Jul 20)
- Hercules Offshore Sells Jackup at 94% Loss (Jul 12)
- Hercules Offshore Lays Off 60 at Houston Headquarters (Jun 13)