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Superior Energy Services, Inc. (SPN) today announced net income from continuing operations of $85.7 million, or $0.55 per diluted share, and net income of $79.9 million, or $0.51 per diluted share, on revenue of $1,209.0 million for the third quarter of 2014.

These results compare with the third quarter of 2013 net income from continuing operations of $67.5 million, or $0.42 per diluted share, and net income of $69.8 million, or $0.43 per diluted share, on revenue of $1,096.4 million.

David Dunlap, President and CEO of the Company, commented, “We had another great quarter of performance at Superior Energy Services.  Our U.S. land revenue continues to grow as we experienced higher demand across most of our product lines, with hydraulic fracturing leading the way.  We expect the fracturing business to have more expansion opportunities in the U.S. land market as we continue to activate idle equipment in the coming quarters.

“We have frequently mentioned the operating leverage that is available in our U.S. land business. The increased horizontal completions demand that we have experienced the past two quarters has provided us the opportunity to demonstrate how operating leverage translates into higher earnings.

“Although the majority of our earnings improvement in the past two quarters has been driven by higher demand in the United States, our international growth is also producing impressive gains. We have been very deliberate in choosing specific countries to grow our business and have avoided the turbulence that is impacting many other oilfield service companies.

“We are continuing to introduce product lines into established operating areas through equipment transfers, focused capital expenditures and targeted acquisitions.  We believe these actions support the steady and reliable growth that we have delivered, and intend to continue to deliver in our international business.”

During the third quarter of 2014, the Company repurchased and retired approximately 2.0 million shares of its common stock for a total purchase price of $69.1 million. Year to date through September 30, 2014, the Company has repurchased and retired approximately 5.9 million shares for a total purchase price of $185.6 million.

Third Quarter 2014 Geographic Breakdown

U.S. land revenue was $814.1 million, as compared with $718.2 million in the third quarter of 2013 and $721.3 million in the second quarter of 2014. Gulf of Mexico revenue was $210.8 million, as compared with $214.5 million in the third quarter of 2013 and $211.7 million in the second quarter of 2014. International revenue was $184.1 million, as compared with $163.7 million in the third quarter of 2013 and $174.6 million in the second quarter of 2014.

Drilling Products and Services Segment

Drilling Products and Services segment revenue was $239.2 million, an 11% increase from third quarter 2013 revenue of $215.5 million and a 6% increase from second quarter 2014 revenue of $226.0 million.

The primary factor driving the higher sequential revenue in this segment was a 24% increase in international revenue to $63.7 million due to increased rentals of premium drill pipe and accommodations.  U.S. land revenue increased 5% sequentially to $85.9 million due to increased rentals of bottom hole assemblies and accommodations.  Gulf of Mexico revenue decreased 3% sequentially to $89.6 million due to decreased specialty rentals.

Onshore Completion and Workover Services Segment

Onshore Completion and Workover Services segment revenue was $470.8 million, an 18% increase from third quarter 2013 revenue of $398.0 million, and an 18% increase from second quarter 2014 revenue of $398.1 million. Practically all of the revenue in this segment is generated from U.S. land market areas.

On a sequential basis, the revenue increase was driven by higher demand for pressure pumping services.

Production Services Segment

Production Services segment revenue was $348.8 million, a 3% decrease from third quarter 2013 revenue of $359.7 million and a 1% increase from second quarter 2014 revenue of $343.9 million.

U.S. land revenue increased 5% sequentially to $225.0 million, primarily due to increased activity for coiled tubing and wireline. International revenue decreased 5% sequentially to $86.6 million primarily due to lower demand for snubbing services and pressure control tools. Gulf of Mexico revenue decreased 3% sequentially to $37.2 million primarily due to decreased coiled tubing activity.

Technical Solutions Segment

Technical Solutions segment revenue was $150.2 million, a 22% increase from third quarter 2013 revenue of $123.2 million and an 8% increase from second quarter 2014 revenue of $139.6 million.

Gulf of Mexico revenue increased 4% sequentially to $84.0 million due to an increase in well control services, which was offset by a decline in demand for completion tools and services. U.S. land revenue increased 20% sequentially to $32.4 million primarily related to increases in well control services and completion tools and products.  International revenue increased 5% sequentially to $33.8 million as a result of an increase in well service activity.

Conference Call Information

The Company will host a conference call at 11 a.m. Eastern Time on Thursday, October 30, 2014.  The call can be accessed from the Company’s website at www.superiorenergy.com, or by telephone at 719-457-1035.  For those who cannot listen to the live call, a telephonic replay will be available through November 13, 2014 and may be accessed by calling 719-457-0820 and using the pass code 2102356#. An archive of the webcast will be available after the call for a period of 60 days at www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling, completion and production-related needs of oil and gas companies worldwide through its brand name drilling products and its integrated completion and well intervention services and tools, supported by an engineering staff who plan and design solutions for customers.

The press release contains forward-looking statements which involved risks and uncertainties.  Generally, the words “expects,” “anticipates,” “targets,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words.  Such forward-looking statements are subject to uncertainties that could cause actual results to differ materially from such statements. Such uncertainties include, but are not limited to: risks inherent in acquiring businesses; the effect of regulatory programs and environmental matters on the Company’s performance, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for the Company’s pressure pumping services; risks associated with business growth outpacing the capabilities of the Company’s infrastructure and workforce; risks associated with the uncertainty of macroeconomic and business conditions worldwide; the cyclical nature and volatility of the oil and gas industry, including the level of exploration, production and development activity and the volatility of oil and gas prices; changes in competitive factors affecting the Company’s operations; political, economic and other risks and uncertainties associated with international operations; the impact that unfavorable or unusual weather conditions could have on the Company’s operations; the potential shortage of skilled workers; the Company’s dependence on certain customers; the risks inherent in long-term fixed-price contracts; and, operating hazards, including the significant possibility of accidents resulting in personal injury or death, property damage or environmental damage. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. Investors are cautioned that many of the assumptions on which the Company’s forward-looking statements are based are likely to change after the forward-looking statements are made, including for example the market prices of oil and natural gas and regulations affecting oil and gas operations, which the Company cannot control or anticipate. Further, the Company may make changes to its business plans that could or will affect the Company’s results. The Company undertakes no obligation to update any of its forward-looking statements and it does not intend to update its forward-looking statements more frequently than quarterly, notwithstanding any changes in the assumptions, changes in the Company’s business plans, its actual experience, or other changes.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Three and Nine Months Ended September 30, 2014 and 2013

(in thousands, except earnings per share amounts)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2014

2013

2014

2013

Revenues

$   1,209,026

$   1,096,412

$    3,377,996

$  3,274,413

Cost of services and rentals (exclusive of items shown separately below)

721,692

671,632

2,023,590

1,969,930

Depreciation, depletion, amortization and accretion

170,154

152,028

493,437

446,432

General and administrative expenses

154,859

147,364

457,631

440,812

Income from operations

162,321

125,388

403,338

417,239

Other income (expense):

  Interest expense, net

(24,169)

(25,564)

(72,610)

(81,610)

  Other income (expense)

(2,051)

(1,697)

(1,480)

41

  Loss on early extinguishment of debt

(884)

Income from continuing operations before income taxes

136,101

98,127

329,248

334,786

Income taxes

50,358

30,658

121,822

112,620

Net income from continuing operations

85,743

67,469

207,426

222,166

Income (loss) from discontinued operations, net of income tax

(5,886)

2,366

(15,735)

(20,045)

Net income

$        79,857

$        69,835

$       191,691

$     202,121

Basic earnings (losses) per share:

Net income from continuing operations

$            0.55

$            0.42

$             1.33

$           1.40

Income (loss) from discontinued operations

(0.03)

0.02

(0.10)

(0.13)

Net income

$            0.52

$            0.44

$             1.23

$           1.27

Diluted earnings (losses) per share:

Net income from continuing operations

$            0.55

$            0.42

$             1.31

$           1.38

Income (loss) from discontinued operations

(0.04)

0.01

(0.10)

(0.12)

Net income

$            0.51

$            0.43

$             1.21

$           1.26

Weighted average common shares used

  in computing earnings per share:

    Basic

154,530

159,326

156,424

159,204

    Diluted

156,336

160,883

158,068

160,804

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2014 AND DECEMBER 31, 2013

(in thousands)

9/30/2014

12/31/2013

(Unaudited)

(Audited)

ASSETS

Current assets:

  Cash and cash equivalents

$      320,042

$     196,047

  Accounts receivable, net

967,943

937,195

  Deferred income taxes

27,024

8,785

  Income taxes receivable

5,532

  Prepaid expenses

72,072

70,421

  Inventory and other current assets

185,613

258,449

  Assets held for sale

285,759

        Total current assets

1,858,453

1,476,429

Property, plant and equipment, net 

2,702,532

3,002,194

Goodwill

2,456,522

2,458,109

Notes receivable

25,560

23,708

Intangible and other long-term assets, net

420,873

450,867

        Total assets

$   7,463,940

$  7,411,307

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

  Accounts payable

$      207,242

$     216,029

  Accrued expenses

367,476

376,049

  Income taxes payable 

37,417

  Current portion of decommissioning liabilities

27,322

  Current maturities of long-term debt

20,344

20,000

  Liabilities held for sale

76,849

        Total current liabilities

709,328

639,400

Deferred income taxes 

729,246

736,080

Decommissioning liabilities

87,443

56,197

Long-term debt, net

1,630,834

1,646,535

Other long-term liabilities

165,379

201,651

Total stockholders’ equity

4,141,710

4,131,444

        Total liabilities and stockholders’ equity

$   7,463,940

$  7,411,307

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

THREE MONTHS ENDED SEPTEMBER 30, 2014, JUNE 30, 2014, AND SEPTEMBER 30, 2013

(unaudited)

(in thousands)

Three months ended, 

Revenue

September 30, 2014

June 30, 2014

September 30, 2013

Drilling Products and Services

$                  239,204

$                  225,982

$                  215,523

Onshore Completion and Workover Services

470,849

398,048

398,016

Production Services

348,793

343,876

359,722

Technical Solutions

150,180

139,646

123,151

Total Revenues

$               1,209,026

$               1,107,552

$               1,096,412

Gross Profit (1)

September 30, 2014

June 30, 2014

September 30, 2013

Drilling Products and Services

$                  162,927

$                  153,245

$                  141,650

Onshore Completion and Workover Services

153,416

123,141

122,340

Production Services

100,226

112,757

108,147

Technical Solutions

70,765

68,116

52,643

Total Gross Profit

$                  487,334

$                  457,259

$                  424,780

Income from Operations (2)

September 30, 2014

June 30, 2014

September 30, 2013

Drilling Products and Services

$                    78,110

$                    66,948

$                    63,396

Onshore Completion and Workover Services

54,782

31,748

32,548

Production Services

13,374

27,334

15,858

Technical Solutions

16,055

23,411

13,586

Total Income from Operations

$                  162,321

$                  149,441

$                  125,388