HOUSTON, May 21, 2020 (GLOBE NEWSWIRE) — Superior Energy Services, Inc. (NYSE: SPN) (the “Company”) today announced a net loss from continuing operations for the first quarter of 2020 of $32.3 million, or $2.18 per share, on revenue of $321.5 million. This compares to a net loss from continuing operations of $6.2 million, or $0.42 per share, for the fourth quarter of 2019, on revenue of $336.1 million and a net loss from continuing operations of $32.6 million, or $2.10 per share, for the first quarter of 2019, on revenue of $365.3 million.
Source: superiorenergy.com
The Company reported pre-tax charges of $16.5 million in reduction in value of assets, $6.0 million in restructuring costs and $4.3 million of merger-related transaction costs. The resulting adjusted net loss from continuing operations for the first quarter of 2020 was $11.7 million, or $0.78 per share.
David Dunlap, President and CEO, commented, “Although our first quarter results don’t reflect an extensive impact from the COVID-19 pandemic, it’s clear that the world changed suddenly as the global spread of this illness accelerated toward the end of the quarter. At Superior Energy, our time and effort increasingly shifted towards ensuring the well-being of our employees and customers as the uncertainty created by the spread of COVID-19 grew.
“A significant consequence of the global pandemic was the precipitous decline in both oil demand and price. In turn, our customers have rapidly and dramatically reduced their spending, causing us to take significant steps to respond to a much smaller market. To date, we have:
- Implemented actions to reduce our payroll costs by an estimated annual net amount of approximately $115 million through a combination of salary reductions, reductions in force and furloughs;
- Reduced 2020 capital expenditures to no more than $50 million for the full year; and
- Leveraged governmental relief efforts to defer payroll and other tax payments, including an anticipated tax refund of approximately $30 million
“We will continue to appropriately scale the cost structure of the Company as we experience changes in customer spending and activity.
“With the secular change to the global oil and gas market beginning in earnest in 2015, our organization embarked on a rigorous evaluation of options to enhance stakeholder value. As a result of our efforts, we have determined the best way to maximize stakeholder value is to separate the Company into two publicly traded companies – one focused on the consolidation of the U.S. onshore completion, production and water solutions market and the other centered around our leading global franchises. This separation better aligns future growth strategies, cost-structures and capital deployment with each entities’ commercial, geographical and product offerings.
“In December 2019, the Company entered into an agreement with Forbes Energy Services (“Forbes”) to combine its North America services business lines with Forbes into a separate company. To date, significant progress has been made in finalizing the combination; however, the COVID-19 pandemic and decline in oil and gas prices have created significant disruption to the capital markets and both companies’ operations. This disruption has rendered the combination of our North America business lines with Forbes and our related note exchange offer impractical to complete on the terms originally contemplated, and we and Forbes intend to terminate the merger agreement. While this specific transaction will not come to pass, the strategic rationale for the separation of the Company’s business lines remains clear, and we will continue to actively pursue strategies to effectuate it.”
First Quarter 2020 Geographic Breakdown
U.S. land revenue was $134.7 million in the first quarter of 2020, a decrease of 2% as compared with revenue of $137.8 million in the fourth quarter of 2019, and a 34% decrease compared to revenue of $203.9 million in the first quarter of 2019. U.S. offshore revenue decreased 16% to $80.1 million as compared with revenue of $95.3 million in the fourth quarter of 2019, and increased 16% from revenue of $69.3 million in the first quarter of 2019. International revenue of $106.8 million increased by 4% as compared with revenue of $102.9 million in the fourth quarter of 2019 and increased 16% as compared to revenue of $92.1 million in the first quarter of 2019.
