LONDON, England, March 27, 2001 (PRIMEZONE) -- Stolt Offshore S.A. (OSE:STO) (Nasdaq:SOSA) today reported results for the first quarter ended February 28, 2001. The net loss for the quarter was $(15.5) million, or $(0.18) per share, on net operating revenue of $191.1 million, compared with a net loss of $(15.7) million, or $(0.25) per share, on net operating revenue of $192.4 million for the same period last year. The weighted average number of common share equivalents outstanding for the quarter was 87.2 million compared with 63.0 million for the same period of 2000.
Commenting on the results, Bernard Vossier, Chief Executive Officer, said, "The results for the quarter are in line with our expectations and reflect the low level of activity in our markets at this time of year. We are now expecting to see much higher activity levels in the second half, particularly in West Africa, the UK Sector of the North Sea, and in the Gulf of Mexico.
"During the quarter in West Africa we progressed the Shell EA and Total Fina Elf Amenam projects at our fabrication yard in Nigeria. The first of the Shell EA platforms is due to be installed offshore in the next few weeks. The Seaway Legend completed the pre-installation survey work for the Total Fina Elf Girassol project during the quarter, and the installation phase is now well under way. The Seaway Polaris has installed the moorings for the riser towers and is now laying the water injection pipelines with her new J Lay system. The Girassol FPSO is due to leave the Hyundai yard in Korea at the end of this month.
"The recent award of the $200 million Shell Bonga contract confirms the strength of our position in this very important market in which we have a substantial investment in local infrastructure in both Nigeria and in Angola. Our investment in these countries has played an important part in enabling us to maxims the local content in both the Bonga and Girassol projects. The market for our services in Southern Europe, Africa, and the Middle East, is more than doubling in value this year to some $3 billion with a number of major bids for work in this region now coming up for award. In the next few months we expect to see six major contracts come out to bid for new West African developments for projects starting in 2002 and beyond, which together are worth some $4 billion.
"In the North Sea UK Sector, the Seaway Kestrel completed the $10 million tie-back of the Beauly subsea well to the Balmoral FPV for Talisman Energy (UK) Ltd. This involved the installation of a 5.2 km six-inch diameter production line, two-inch diameter gas lift line, and well control umbilical. During the quarter we were awarded a $16 million contract by Talisman Energy (UK) Ltd for tie-back of the Hannay subsea development to the Talisman Buchan FPSO. This EPIC contract includes the installation by the Seaway Falcon of a 13 km eight-inch diameter rigid production line with a three-inch diameter gas injection line. The well control system, manifold structure and subsea isolation valve will be installed by the Discovery in the fourth quarter of this year.
"We have been awarded the first contract under the new UK Satellite Accelerator Initiative which has been set up by a group of oil companies to give contractors, working on a collaborative basis, an opportunity to apply creative and innovative ideas to make marginal developments economically viable. This contract is to verify that the technical and commercial aspects of the proposals that we and our partners have made for the BP Wood field are viable. This may lead on to a contract for the full development of the field, which is expected to come on stream in 2003.
"The North Sea UK market is growing by over 40% this year and we expect to see further growth in 2002 as some larger new developments come into the market. The tightening supply of diving and construction assets for the second half of the year should improve the pricing environment for future contract awards.
"In Norway we progressed the engineering work for the Norsk Hydro Vale and Statoil Glitne developments during the quarter. The Stolt Rockwater JV was awarded a $10 million contract for the tie-back of the Statoil Vesterled project, which connects the Heimdal platform to the FNA gas export pipeline. The installation work is scheduled for the third quarter of this year.
"In the Gulf of Mexico, the Seaway Falcon which was recently upgraded with Serimer Dasa automatic welding systems, has been achieving pipe lay rates of over 6 km a day as she has continued her deep water installation program throughout the quarter. She has installed two six-inch diameter 26 km pipelines for Bluewater Industries, on behalf of ATP/Unocal, which were tied to Texaco's Garden Banks 189 platform with steel catenary risers. She has also installed well control umbilicals for Exxon Mobil on the Mica field and for Shell on the Oregano and Serano developments, as well as, completing the Pecten field installation work for Santa Fe Snyder. The shallow water maintenance market has seen low levels of activity throughout the quarter, but we expect this market segment to be much busier as we go into the second half of the year.
"The Gulf of Mexico market is also expected to double in value for us this year. We are, for the first time, active in all of the offshore construction market segments. We anticipate a much stronger shallow water maintenance market than in either of the last two years and we are already participating in an active deepwater construction market. We are present, for the first time this year, in both the shallow water pipelay market and in the deeper water trunkline market through the award of the Gulfstream project, which has enabled us to move specialist pipelay barges to this region from elsewhere in the world.
"In Brazil we have had a good operating performance from the Seaway Condor and the Seaway Harrier throughout the quarter on their long term contracts for Petrobras. We have received a letter of intent from Petrobras for the award of an $80 million contract which will keep the Seaway Harrier working in Brazil for another four years.
"In the Asia Pacific region the activity level has been low throughout the quarter and we are not expecting this to improve later in the year. We have however been awarded a $15.8 million two-year contract from Total Indonesie for the Makaham Delta pipeline repair on the Tunu field.
"Our backlog now stands at $1.5 billion of which $786 million is for 2001. This compares with a backlog of $1.2 billion of which $697 million was for 2000. The level of bids outstanding now stands at $3.7 billion compared to $2.2 billion at this time last year.
"The outlook remains encouraging as we see our markets continue to grow, particularly in West Africa, the UK Sector of the North Sea and the Gulf of Mexico, with Brazil remaining constant. We anticipate that margins will improve for work awarded in the second half of the year as the demand for premium assets continues to rise. Due to the timing of some projects being delayed, earnings per share in the second quarter will be a loss of between $(0.08) and $0.00. We should then see all of the earnings for the year coming in the second half. We maintain our previous guidance on full year earnings of between $0.30 to $0.50 per share," Mr. Vossier concluded.
The previously announced share-restructuring plan was completed on March 7th. The shareholder vote was 94.3% in favor of reclassifying the former non-voting Class A Shares to voting Common Shares. This resulted in an increase in the free float of the Common Share shares of 50%.
Stolt Offshore is a leading offshore contractor to the oil and gas industry, specializing in technologically sophisticated offshore and subsea engineering, flowline and pipeline lay, construction, inspection, and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas.
This news release contains forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Actual future results and trends could differ materially from those set forth in such statements due to various factors. Additional information concerning these factors is contained from time to time in the Company's U.S. SEC filings, including but not limited to the Company's report on form 20-F for the year ended November 30, 1999. Copies of these filings may be obtained by contacting the Company or the SEC.
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