EX-99 2 h19626exv99.txt PRESS RELEASE DATED NOVEMBER 2, 2004 EXHIBIT 99 FOR IMMEDIATE RELEASE Investor Contact: David Tucker 281-406-2370 November 2, 2004 Parker Drilling Reports Third Quarter Results HOUSTON - For the quarter ended September 30, 2004, Parker Drilling Company (NYSE: PKD) today 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. Quarterly utilization information can be accessed in the section entitled "Rig Utilization" on the Parker Web site, referenced below. 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. Parker has scheduled a conference call at 10 a.m. CST (11 a.m. EST) November 2, 2004 to discuss third quarter 2004 results. Those interested in participating in the call may dial in at (303) 262-2131. The conference call replay can be accessed from noon CST November 2, 2004, until 6 p.m. CST November 9, 2004, by dialing (303) 590-3000 and using the access code 11011921#. Alternatively, the call can be accessed live through the Parker Web site at http://www.parkerdrilling.com. An archive of the call will be available on the Web for 12 months. This release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Securities Acts. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including the outlook for rig utilization and dayrates, general industry conditions including bidding activity, future operating results of the Company's rigs and rental tool operations, capital expenditures, expansion and growth opportunities, asset sales and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this release are based on reasonable assumptions, actual results may differ materially from those expressed or implied in the forward-looking statements. For a more detailed discussion of risk factors, please refer to the Company's reports filed with the SEC, and in particular, the report on Form 10-K for the year ended December 31, 2003. Each forward-looking statement speaks only as of the date of this release, and the Company undertakes no obligation to publicly update or revise any forward-looking statement. PARKER DRILLING COMPANY AND SUBSIDIARIES Consolidated Condensed Statements of Operations (Unaudited)
Three Months Ended September 30, Nine Months Ended September 30, -------------------------------- -------------------------------- 2004 2003 2004 2003 ------------- ------------- ------------- ------------- (Dollars in Thousands) DRILLING AND RENTAL REVENUES U.S. Drilling $ 22,788 $ 13,872 $ 63,209 $ 49,593 International Drilling 49,686 54,950 156,238 157,094 Rental Tools 15,471 14,054 47,278 40,366 ------------- ------------- ------------- ------------- TOTAL DRILLING AND RENTAL REVENUES 87,945 82,876 266,725 247,053 ------------- ------------- ------------- ------------- DRILLING AND RENTAL OPERATING EXPENSES U.S. Drilling 13,399 11,964 38,596 37,466 International Drilling 43,824 37,343 122,218 111,398 Rental Tools 6,558 5,860 19,883 16,868 Depreciation and Amortization 17,806 17,450 50,599 56,580 ------------- ------------- ------------- ------------- TOTAL DRILLING AND RENTAL OPERATING EXPENSES 81,587 72,617 231,296 222,312 ------------- ------------- ------------- ------------- DRILLING AND RENTAL OPERATING INCOME 6,358 10,259 35,429 24,741 ------------- ------------- ------------- ------------- Construction Contract Revenue - 1,061 - 7,030 Construction Contract Expense - 61 - 5,030 ------------- ------------- ------------- ------------- NET CONSTRUCTION CONTRACT OPERATING INCOME - 1,000 - 2,000 ------------- ------------- ------------- ------------- General and Administrative Expense (4,924) (4,079) (17,958) (14,485) Provision for Reduction in Carrying Value of Certain Assets - - (6,558) - Gain on Disposition of Assets, Net 333 533 1,402 1,344 ------------- ------------- ------------- ------------- TOTAL OPERATING INCOME 1,767 7,713 12,315 13,600 ------------- ------------- ------------- ------------- OTHER INCOME AND (EXPENSE) Interest Expense (12,202) (13,152) (39,077) (39,901) Loss on Extinguishment of Debt (8,151) - (8,729) - Other Income (Expense) - Net (294) (430) 461 703 ------------- ------------- ------------- ------------- TOTAL OTHER INCOME AND (EXPENSE) (20,647) (13,582) (47,345) (39,198) ------------- ------------- ------------- ------------- LOSS BEFORE INCOME TAXES (18,880) (5,869) (35,030) (25,598) Income Tax Expense 4,542 2,914 12,008 11,668 ------------- ------------- ------------- ------------- LOSS FROM CONTINUING OPERATIONS (23,422) (8,783) (47,038) (37,266) Discontinued Operations, Net of Taxes 1,359 2,127 6,586 (59,999) ------------- ------------- ------------- ------------- NET LOSS $ (22,063) $ (6,656) $ (40,452) $ (97,265) ============= ============= ============= ============= EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED Loss From Continuing Operations $ (0.25) $ (0.09) $ (0.50) $ (0.40) Discontinued Operations, Net of Taxes $ 0.02 $ 0.02 $ 0.07 $ (0.64) Net Loss $ (0.23) $ (0.07) $ (0.43) $ (1.04) AVERAGE COMMON SHARES OUTSTANDING Basic and Diluted 94,196,255 93,728,825 93,944,927 93,198,996
PARKER DRILLING COMPANY AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Unaudited)
September 30, 2004 December 31, 2003 -------------------- -------------------- ASSETS (Dollars in Thousands) CURRENT ASSETS Cash and Cash Equivalents $ 38,757 $ 67,765 Accounts and Notes Receivable, Net 90,001 89,050 Rig Materials and Supplies 15,769 13,627 Other Current Assets 15,258 2,466 -------------------- -------------------- TOTAL CURRENT ASSETS 159,785 172,908 -------------------- -------------------- PROPERTY, PLANT AND EQUIPMENT, NET 405,623 387,664 ASSETS HELD FOR SALE 27,428 150,370 OTHER ASSETS Goodwill 114,398 114,398 Other Assets 33,869 22,292 -------------------- -------------------- TOTAL OTHER ASSETS 148,267 136,690 -------------------- -------------------- TOTAL ASSETS $ 741,103 $ 847,632 ==================== ==================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current Portion of Long-Term Debt $ 60 $ 60,225 Accounts Payable and Accrued Liabilities 96,590 68,404 -------------------- -------------------- TOTAL CURRENT LIABILITIES 96,650 128,629 -------------------- -------------------- LONG-TERM DEBT 481,062 511,400 DISCONTINUED OPERATIONS 1,035 6,421 OTHER LIABILITIES 7,973 8,379 STOCKHOLDERS' EQUITY 154,383 192,803 -------------------- -------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 741,103 $ 847,632 ==================== ==================== Current Ratio 1.65 1.34 Total Long Term Debt as a % of capitalization 76% 73% Book Value per common share $ 1.63 $ 2.05
PARKER DRILLING COMPANY AND SUBSIDIARIES Selected Financial Data (Unaudited)
Three Months Ended ------------------------------------------------ September 30, June 30, ------------------------------ ------------ 2004 2003 2004 ------------ ------------ ------------ DRILLING AND RENTAL REVENUES (Dollars in Thousands) U.S. Drilling $ 22,788 $ 13,872 $ 20,662 International Land Drilling 45,918 37,105 41,120 International Offshore Drilling 3,768 17,845 9,395 Rental Tools 15,471 14,054 16,704 ------------ ------------ ------------ Total Drilling and Rental Revenues 87,945 82,876 87,881 ------------ ------------ ------------ DRILLING AND RENTAL OPERATING EXPENSES U.S. Drilling 13,399 11,964 12,506 International Land Drilling 33,553 25,035 26,781 International Offshore Drilling 10,271 12,308 11,722 Rental Tools 6,558 5,860 6,712 ------------ ------------ ------------ Drilling and Rental Operating Expenses 63,781 55,167 57,721 ------------ ------------ ------------ DRILLING AND RENTAL OPERATING INCOME U.S. Drilling 9,389 1,908 8,156 International Land Drilling 12,365 12,070 14,339 International Offshore Drilling (6,503) 5,537 (2,327) Rental Tools 8,913 8,194 9,992 Depreciation and Amortization (17,806) (17,450) (16,544) ------------ ------------ ------------ Total Drilling and Rental Operating Income 6,358 10,259 13,616 Net Construction Contract Operating Income - 1,000 - General and Administrative Expense (4,924) (4,079) (6,992) Provision for Reduction in Carrying Value of Certain Assets - - (6,558) Gain on Disposition of Assets, Net 333 533 346 ------------ ------------ ------------ TOTAL OPERATING INCOME $ 1,767 $ 7,713 $ 412 ============ ============ ============
Marketable Rig Count Summary As of September 30, 2004
Total ------------ U.S. Gulf of Mexico Barge Rigs Workover 7 Intermediate 5 Deep 8 ------------ Total U.S. Gulf of Mexico Barge Rigs 20 ------------ International Land Rigs Asia Pacific 12 Africa/Middle East 2 Latin America 16 CIS 8 ------------ Total International Land Rigs 38 International Barge Rigs Mexico 1 Nigeria 4 Caspian Sea 1 ------------ Total International Barge Rigs 6 ------------ Total International Rigs 44 ------------ Rig Held for Sale - U.S. Gulf of Mexico Jackup Rig 1 ------------ Total Marketable Rigs 65 ============