Parker Drilling Reports 2017 Second Quarter Results

HOUSTON, Aug. 2, 2017 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced results for the second quarter ended June 30, 2017, including a reported net loss available to common stockholders of $31.1 million, or a $0.23 loss per common share, on revenues of $109.6 million. 

Second quarter Adjusted EBITDA was $13.5 million.

"Parker continues to capitalize on increasing activity in the U.S. and is prudently managing international operations, which are recovering more slowly," said Gary Rich, the Company's Chairman, President and CEO.  "As expected, our U.S. rental tools business led our second quarter improvement with a 47 percent sequential increase in revenues and incremental margin growth of 73 percent driven by higher equipment utilization and select pricing increases on specific product lines.   For the third consecutive quarter, the growth of our U.S. rental tools business outpaced the growth in the U.S. land rig count, which increased 21 percent in the second quarter.  Our U.S. barge drilling business also experienced an increase in activity, with utilization of 19 percent in the second quarter compared with 4 percent in the first quarter.

"Internationally, we continue to see signs of an emerging recovery.  We executed a one-well contract plus optional wells for a rig in the Kurdistan region of Iraq that should commence operations in the fourth quarter and a one-year contract for a rig in Indonesia that should begin mobilizing in September. We are encouraged by our recent contract wins and remain cautiously optimistic about continued contracting activity in the second half of 2017 and heading into 2018.

"With oil prices declining below $50 per barrel in the second quarter, we are maintaining a prudent approach to our capital spending plan. We remain encouraged by the recent higher activity in the U.S. and indications of improving conditions in our other markets, and believe we are well positioned to capture opportunities as they arise," concluded Rich.

Second Quarter Review

Parker Drilling's revenues for the 2017 second quarter, compared with the 2017 first quarter, increased 11.5 percent to $109.6 million from $98.3 million.  Operating gross margin excluding depreciation and amortization expense (gross margin) increased 60.0 percent to $20.0 million from $12.5 million and gross margin as a percentage of revenues was 18.2 percent, compared with 12.7 percent for the 2017 first quarter.

Drilling Services

For the Company's Drilling Services business, which is comprised of the U.S. (Lower 48) Drilling and International & Alaska Drilling segments, second quarter revenues increased 2.0 percent to $65.7 million from $64.4 million for the 2017 first quarter.  Gross margin increased 2.5 percent to $8.2 million from $8.0 million, and gross margin as a percentage of revenues was 12.5 percent, compared with 12.4 percent for the prior period.  Contracted backlog was $289 million at the end of the second quarter.

U.S. (Lower 48) Drilling

U.S. (Lower 48) Drilling segment revenues increased $3.8 million to $5.0 million from $1.2 million for the 2017 first quarter. Gross margin improved 66.7 percent to a $1.0 million loss from a loss of $3.0 million for the 2017 first quarter. The increase in revenues and gross margin improvement were primarily the result of increased utilization.

International & Alaska Drilling

International & Alaska Drilling segment revenues decreased 4.0 percent to $60.7 million from $63.2 million for the 2017 first quarter. Gross margin was $9.3 million, a 15.5 percent decrease from 2017 first quarter gross margin of $11.0 million.  The decrease in revenues and gross margin were driven primarily by our Operations & Management (O&M) business due to an O&M contract that was completed in the first quarter and lower earnings from our joint venture in Kazakhstan partially offset by a Company-owned rig shifting from standby to an operating rate.

Rental Tools Services

For the Company's Rental Tools Services business, which is comprised of the U.S. Rental Tools and International Rental Tools segments, second quarter revenues increased 29.9 percent to $43.9 million from $33.8 million for the 2017 first quarter.  Gross margin increased 165.9 percent to $11.7 million from $4.4 million, and gross margin as a percentage of revenues was 26.7 percent compared with 13.0 percent for the prior period.

U.S. Rental Tools

U.S. Rental Tools segment revenues increased 47.0 percent to $29.7 million, from $20.2 million for the 2017 first quarter.  Gross margin increased 101.5 percent to $13.7 million from $6.8 million for the 2017 first quarter.  The increases in revenues and gross margin were driven by increased U.S. land drilling activity and select price increases.

International Rental Tools

International Rental Tools segment revenues increased 4.4 percent to $14.2 million from $13.6 million for the 2017 first quarter.  Gross margin improved 16.7 percent to a $2.0 million loss from a $2.4 million loss for the 2017 first quarter.  The increase in revenues was attributable to increased tubular running services partially offset by reduced rental activity in Latin America and the Asia Pacific regions.  Gross margin improvement was due to increased activity partially offset by increases in payroll taxes and benefits.

Consolidated

General and Administrative expenses were $6.5 million for the 2017 second quarter, down from $7.0 million for the 2017 first quarter.  The decrease was primarily due to incentive compensation adjustments during the 2017 second quarter.

Capital expenditures in the second quarter were $12.1 million, and year-to-date through June 30, 2017 were $26.6 million.

Conference Call

Parker Drilling has scheduled a conference call for 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Thursday, August 3, 2017, to review second quarter results.  The call will be available by telephone by dialing (+1) (412) 902-0003 and asking for the Parker Drilling Second Quarter Conference Call.  The call can also be accessed through the Investor Relations section of the Company's website.  A replay of the call can be accessed on the Company's website for 12 months and will be available by telephone through August 10, 2017 at (+1) (201) 612-7415, conference ID 13665029#.

Cautionary Statement

This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements in this press release other than statements of historical facts addressing activities, events or developments the Company expects, projects, believes, or anticipates will or may occur in the future are forward-looking statements. These statements include, but are not limited to, statements about anticipated future financial or operational results; the outlook for rental tools utilization and rig utilization and dayrates; the results of past capital expenditures; scheduled start-ups of rigs; general industry conditions such as the demand for drilling and the factors affecting demand; competitive advantages such as technological innovation; future operating results of the Company's rigs, rental tools operations and projects under management; future capital expenditures; expansion and growth opportunities; acquisitions or joint ventures; asset purchases and sales; successful negotiation and execution of contracts; scheduled delivery of drilling rigs or rental equipment for operation; the Company's financial position; changes in utilization or market share; outcomes of legal proceedings; compliance with credit facility and indenture covenants; and similar matters. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Although the Company believes its expectations stated in this press release are based on reasonable assumptions, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that could cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to changes in worldwide economic and business conditions, fluctuations in oil and natural gas prices, compliance with existing laws and changes in laws or government regulations, the failure to realize the benefits of, and other risks relating to, acquisitions, the risk of cost overruns, our ability to refinance our debt and other important factors, many of which could adversely affect market conditions, demand for our services, and costs, and all or any one of which could cause actual results to differ materially from those projected. For more information, see "Risk Factors" in the Company's Annual Report filed on Form 10-K with the Securities and Exchange Commission and other public filings and press releases. Each forward-looking statement speaks only as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

This news release contains non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable U.S. Generally Accepted Accounting Principles (GAAP) financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided in the following tables.

Company Description

Parker Drilling provides drilling services and rental tools to the energy industry. The Company's Drilling Services business serves operators in the inland waters of the U.S. Gulf of Mexico utilizing Parker Drilling's barge rig fleet and in select U.S. and international markets and harsh-environment regions utilizing Parker-owned and customer-owned equipment. The Company's Rental Tools Services business supplies premium equipment and well services to operators on land and offshore in the U.S. and international markets.  More information about Parker Drilling can be found on the Company's website at www.parkerdrilling.com.

Contact: Jason Geach, Vice President, Investor Relations & Corporate Development, (+1) (281) 406-2310, [email protected].

 

 

 

 

 

 

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SOURCE Parker Drilling Company