HOUSTON, Nov. 12, 2009 (GLOBE NEWSWIRE) -- Seahawk Drilling, Inc. ("Seahawk") (Nasdaq:HAWK) reported today a loss of $32.4 million, or $2.79 per diluted share for the three months ended September 30, 2009, including the results from the discontinued operations platform business, which was sold in May of 2008. Continuing operations for the three months ended September 30, 2009, excluding the platform business, reported a loss of $32.5 million, or $2.80 per diluted share, compared to $41.8 million, or $3.61 per diluted share for the three months ended September 30, 2008.
The results of continuing operations for the third quarter included a number of non-recurring charges and other items associated with the recent spin-off from Pride International, Inc. ("Pride") totaling $39.6 million, or $25.7 million after tax, and $2.22 per diluted share. Income from continuing operations adjusted for non-recurring charges represented a loss of $6.7 million, or $0.58 per diluted share. Revenues totaled $67.6 million during the three months ended September 30, 2009 compared with $164.0 million during the three months ended September 30, 2008.
Seahawk's results included the following items:
* An asset impairment charge of $32.1 million, or $20.9 million after tax, and $1.80 per diluted share, as part of an assessment of its rigs' fair value at the time of spin-off; * Initial stock compensation charges associated with the spin-off of $4.1 million, or $2.6 million after tax, and $0.23 per diluted share; * Severance charges of $1.6 million, or $1.0 million after tax, and $0.09 per diluted share; * Transition costs due to the spin-off of $1.8 million or $1.2 million after tax, and $0.10 per diluted share.
For the nine months ended September 30, 2009, Seahawk incurred a loss of $25.1 million, or $2.17 per diluted share, which includes the result of the discontinued operations of the platform business. The loss from continuing operations for the nine months ended September 30, 2009 was $28.2 million, or $2.44 per diluted share, compared to the prior year, excluding the discontinued operations of the platform business, income for the nine months ended September 30, 2008 was $135.1 million, or $11.66 per diluted share. Revenues for the nine months ended September 30, 2009 totaled $259.8 million compared to $529.6 million during the nine months ended September 30, 2008.
Seahawk's combined balance sheet at September 30, 2009 included cash and cash equivalents of $89.5 million and net working capital of $62.3 million. The Company's net working capital includes $58.9 million owed to Pride, which includes $15.9 million that is due to Pride upon collection from a customer. As of September 30, 2009, Seahawk had total assets of $709.5 million, stockholders' equity of $466.5 million, and no debt outstanding.
Randall D. Stilley, President and CEO of Seahawk, commented, "Inquiries for work in the U.S. Gulf of Mexico shelf have continued to increase over the last several weeks, and there are currently 23 contracted jackups in the U.S. Gulf of Mexico, up from 14 just a few months ago. We have been successful in adding backlog for our four jackups working in the U.S., and we now have 3 of our U.S. rigs committed into the first quarter of 2010. We are cautiously optimistic about the prospects for 2010, and it appears that many customers now want to take advantage of improved natural gas prices and reduced well costs.
"Furthermore, the latest guidance from PEMEX's third quarter conference call indicated that its 2010 budget will be essentially flat compared to 2009, which should be a positive for our operations in Mexico. Once PEMEX approves the 2010 budget, we anticipate receiving tenders for additional jackups, and we are hopeful that our three rigs currently in Mexico will secure contracts for ongoing work in the region."
Based on current expectations for activity in the fourth quarter of 2009, which includes four rigs working in the U.S. and two rigs working in Mexico, Seahawk anticipates that their cash and cash equivalents balance on December 31, 2009 will be in the range of $60-70 million.
U.S. Results
During the third quarter of 2009, Seahawk's Gulf of Mexico business generated $8.4 million in revenues in the U.S. This compares to revenues of $62.2 million in the third quarter of 2008. Third quarter 2009 average revenue per day decreased to $46,400 from $91,100 in the third quarter of 2008 and operating days decreased to 180 days, or 14% utilization, from 683 days, or 76% utilization, over the same period. The U.S. segment recorded an operating loss of $42.1 million in the third quarter of 2009 compared to $17.9 million of operating income for the third quarter of 2008.
Mexico Results
In Mexico, Seahawk's business generated $59.3 million of revenues in the third quarter of 2009. This compares to revenues of $101.8 million in the third quarter of 2008. Third quarter 2009 average revenue per day decreased to $116,400 from $113,700 in the third quarter of 2008 and operating days decreased from 918 days, or 63% utilization, to 509 days, or 73% utilization, over the same period. The Mexico segment recorded $821,000 in operating income in the third quarter of 2009 compared with $51.3 million of operating income in the third quarter of 2008.
Conference Call Information
Seahawk will host a conference call to discuss these results on Thursday, November 12, 2009 at 10:00 a.m. Central Time. To participate in the call, dial (866) 900-5727 or (574) 941-1321 and reference access code 38353762 approximately 10 minutes prior to the start of the call. The conference call will also be broadcast live via the Internet at http://www.seahawkdrilling.com in the "Investor Relations" section on the "Upcoming Events" tab.
A replay of the conference call will be available on Thursday, November 12, 2009, beginning at 2:00 p.m., Central Time, through Thursday, November 19, 2009, ending at 11:00 p.m., Central Time. The phone number for the conference call replay is (800) 642-1687 or (706) 645-9291 and the access code is 38353762.
Seahawk Drilling, Inc. is an offshore drilling company headquartered in Houston, Texas. Seahawk owns and operates a fleet of 20 jackup rigs that are located in the United States and Mexico. Seahawk's shares are traded on the NASDAQ Stock Market under the symbol "HAWK." Additional information may be found at www.seahawkdrilling.com.
The Seahawk Drilling, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6559
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, project, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements may include, but are not limited to, references to our liquidity, future gas prices, future drilling activity and our future operating results and financial condition. Forward-looking statements are not guarantees of performance. We have based these statements on our assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. No assurance can be given that these assumptions are accurate. Moreover, these statements are subject to a number of risks and uncertainties. Important factors that could cause Seahawk's actual results to differ materially from the expectations reflected in Seahawk's forward-looking statements include those described under Item 1A of our Registration Statement on Form 10, as amended, any updates to those factors set forth in Seahawk's subsequent Quarterly Reports on Form 10-Q and the following factors, among others:
* general economic and business conditions, including conditions in the credit markets; * prices of crude oil and natural gas and industry expectations about future prices; * ability to adequately staff our rigs; * foreign exchange controls and currency fluctuations; * political stability in the countries in which we operate; * the business opportunities, or lack thereof, that may be presented to and pursued by us; * cancellation or renegotiation of our drilling contracts or payment or other delays or defaults by our customers; * changes in laws or regulations; * demand for our rigs; * the effect of litigation and contingencies, including those relating to the Pride Wyoming and the pending and possible future tax assessments by the Mexican government; * competition and market conditions in the contract drilling industry; and * severe weather.
In light of these risks, uncertainties and assumptions, the events anticipated by Seahawk's forward-looking statements may not occur, and you should not place any undue reliance on any of Seahawk's forward-looking statements. Seahawk's forward-looking statements speak only as of the date made and Seahawk undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
Seahawk Drilling, Inc.
Consolidated and Combined Balance Sheets
(Dollar amounts in thousands)
Sept. 30, Dec. 31,
2009 2008
-------- --------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 89,482 $ 41,095
Trade receivables, net 71,202 83,245
Deferred income taxes 3,009 960
Due from Pride 2,075 --
Prepaid expenses and other current assets 56,062 62,434
-------- --------
Total current assets 221,830 187,734
Property and equipment, net 483,179 612,046
Goodwill 1,227 1,227
Other assets 3,219 4,397
-------- --------
Total assets $709,455 $805,404
======== ========
LIABILITIES, STOCKHOLDERS' EQUITY AND NET
PARENT FUNDING
Current liabilities:
Accounts payable $ 31,109 $ 18,778
Due to Pride 58,942 --
Accrued expenses and other current liabilities 69,479 87,095
-------- --------
Total current liabilities 159,530 105,873
Other long-term liabilities 11,717 3,584
Deferred income taxes 71,707 144,361
-------- --------
Total liabilities 242,954 253,818
Preferred stock, $0.01 par value, 10,000,000
shares authorized; none issued and
outstanding -- --
Common stock, $0.01 par value, 75,000,000
shares authorized; 11,648,312 shares issued
and outstanding 116 --
Additional paid-in capital 475,075 --
Net parent funding -- 551,586
Retained earnings (deficit) (8,690) --
-------- --------
Total stockholders' equity and net parent
funding 466,501 551,586
-------- --------
Total liabilities, stockholders' equity and
net parent funding $709,455 $805,404
======== ========
Seahawk Drilling, Inc.
Consolidated and Combined Statements of Operations
(Dollar amounts in thousands, except share and per share amounts)
Three Months Ended
September 30,
----------------------
2009 2008
---------- ----------
(Unaudited) (Unaudited)
Revenues $ 67,611 $ 163,961
Costs and expenses:
Operating costs, excluding depreciation
and amortization 61,811 79,004
Depreciation and amortization 14,900 15,424
General and administrative, excluding
depreciation and amortization 12,857 4,631
Impairment of property and equipment 32,084 --
Loss on sales of assets, net 100 297
---------- ----------
Earnings (loss) from operations (54,141) 64,605
Other income (expense), net (1,003) (469)
---------- ----------
Income before income taxes (55,144) 64,136
Income tax expense (benefit) (22,674) 22,338
---------- ----------
Income (loss) from continuing
operations, net of tax (32,470) 41,798
Income from discontinued operations,
net of tax 49 1,841
---------- ----------
Net income (loss) $ (32,421) $ 43,639
========== ==========
Basic and diluted earnings (loss) per share:
Continuing operations $ (2.80) 3.61
Discontinued operations 0.01 0.16
---------- ----------
Net income (loss) $ (2.79) 3.77
========== ==========
Shares used in the computation of earnings
(loss) per share: 11,608,342 11,584,066
Nine Months Ended
September 30,
----------------------
2009 2008
---------- ----------
(Unaudited) (Unaudited)
Revenues $ 259,827 $ 529,634
Costs and expenses:
Operating costs, excluding depreciation
and amortization 203,066 257,113
Depreciation and amortization 46,736 47,267
General and administrative, excluding
depreciation and amortization 23,492 17,101
Impairment of property and equipment 32,084 --
(Gain) loss on sales of assets, net 341 288
---------- ----------
Earnings (loss) from operations (45,892) 207,865
Other income (expense), net 389 181
---------- ----------
Income before income taxes (45,503) 208,046
Income tax expense (benefit) (17,254) 72,986
---------- ----------
Income (loss) from continuing
operations, net of tax (28,249) 135,060
Income from discontinued operations,
net of tax 3,141 19,493
---------- ----------
Net income (loss) $ (25,108) $ 154,553
========== ==========
Basic and diluted earnings (loss) per share:
Continuing operations $ (2.44) 11.66
Discontinued operations 0.27 1.68
---------- ----------
Net income (loss) $ (2.17) 13.34
========== ==========
Shares used in the computation of earnings
(loss) per share: 11,592,247 11,584,066
Seahawk Drilling, Inc.
Supplementary Financial Information - U.S. Operating Results
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(In thousands)
Revenues $ 8,358 $ 62,203 $ 67,049 $186,341
-------- -------- -------- --------
Costs and expenses:
Operating costs, excluding
depreciation and
amortization 23,070 38,058 86,302 122,519
Depreciation and amortization 8,668 5,929 19,803 17,709
General and administrative
excluding depreciation and
amortization 7 -- 7 --
Impairment of property and
equipment 18,725 -- 18,725 --
(Gain) loss on sales of
assets, net -- 297 1 288
-------- -------- -------- --------
50,470 44,284 124,838 140,516
-------- -------- -------- --------
Earnings (loss) from
operations $(42,112) $ 17,919 $(57,789) $ 45,825
======== ======== ======== ========
U.S. Owned Rigs
Operating days 180 683 908 2,795
Available days 1,288 903 3,822 3,797
Utilization 14% 76% 24% 74%
Average daily revenues $ 46,400 $ 91,100 $ 73,800 $ 60,800
Average marketed rigs 7.0 9.0 6.4 9.9
U.S. Managed Rigs
Operating days -- -- -- 273
Available days -- -- -- 273
Utilization --% --% --% 100%
Average daily revenues -- -- -- 60,400
Average marketed rigs -- -- -- 1.0
Seahawk Drilling, Inc.
Supplementary Financial Information - Mexico Operating Results
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
(In thousands)
Revenues $ 59,253 $101,758 $192,778 $343,293
-------- -------- -------- --------
Costs and expenses:
Operating costs, excluding
depreciation and
amortization 38,741 40,945 116,764 134,594
Depreciation and amortization 6,232 9,496 26,933 29,558
Impairment of property and
equipment 13,359 -- 13,359 --
(Gain) loss on sales of
assets, net 100 -- 340 --
-------- -------- -------- --------
58,432 50,441 157,396 164,152
-------- -------- -------- --------
Earnings (loss) from
operations $ 821 $ 51,317 $ 35,382 $179,141
======== ======== ======== ========
Mexico Owned Rigs
Operating days 270 736 1,081 2,455
Available days 552 920 1,638 2,774
Utilization 49% 80% 66% 89%
Average daily revenues $124,600 $100,000 $111,700 $105,800
Average marketed rigs 3.7 8.0 4.6 9.4
Mexico Managed Rigs
Operating days 239 182 614 541
Available days 251 184 687 548
Utilization 95% 99% 89% 99%
Average daily revenues $108,100 $177,600 $117,700 $165,900
Average marketed rigs 2.3 2.0 2.3 2.0