Chiles reports 43 cents:
SOURCE: Chiles Offshore Inc.
Chiles Offshore Announces Third Quarter Results
HOUSTON, Nov. 2 /PRNewswire/ -- Chiles Offshore Inc. (Amex: COD - news). For the third quarter ended September 30, 2000, and excluding the effect of certain one time, non-cash charges related to the recently completed initial public offering of common stock, the Company reported net income of $4,065,000 or $0.43 per basic share on revenues of $16,015,000. In the corresponding quarter ended September 30, 1999, the Company reported a net loss of $1,536,000 or $0.31 per basic share on revenues of $2,350,000.
For the nine months ended September 30, 2000, and excluding the effect of the one time, non-cash charges referred to above, the Company reported net income of $7,158,000 or $0.92 per basic share on revenues of $38,670,000. In the corresponding nine months ended September 30, 1999, the Company reported a net loss of $1,729,000 or $0.34 per basic share on revenues of $2,878,000.
In connection with its initial public offering of common stock on September 22, 2000, the Company incurred a one time, non-cash deferred income tax charge of $27,462,000 related to the change in its tax status from a limited liability company to a corporation and a one time, non-cash charge of $1,820,000 related to the early extinguishment of certain debt. For the three and nine month periods ended September 30, 2000, the effect of the deferred income tax charge was a loss of $2.93 and $3.54 per basic share, respectively, and the effect of the charge for early extinguishment of debt was a loss of $0.20 and $0.24 per basic share, respectively. Including these non-recurring charges, the Company reported a net loss for the three and nine month periods ended September 30, 2000 of $25,217,000, or $2.69 per basic share, and a net loss of $22,124,000, or $2.85 per basic share, respectively.
The initial public offering involved the issuance of 8,970,000 common shares at $19.00 per share, and the Company now has a total of 17,687,241 common shares outstanding. The Company received net proceeds, after payment of all offering related expenses, of approximately $157 million. Subsequent to the offering, the Company used approximately $99 million to repurchase and retire outstanding indebtedness consisting of approximately $95 million of the Company's 10% Senior Notes due in May 2008, plus accrued interest. The Company also used approximately $7 million to repay outstanding amounts under its bank facility.
On July 20, 2000 the Company entered into an agreement with Perforadora Central, S.A. de C.V. of Mexico, to acquire all of the equity of an entity that will own the ultra-premium jackup rig Tonala, which has been operated by the Company under a bareboat charter since the completion of construction and final commissioning of the rig in April 2000. Under the terms of the agreement, the Company will issue 2,679,723 shares of common stock and assume approximately $64.5 million of debt guaranteed by the US Maritime Administration (``Marad''). The agreement is subject to, among other things, the consent and approval by Marad regarding the terms of the assumption of the debt. The Company is presently in the process of seeking such consent and approval from Marad. The agreement also provides that upon closing of the acquisition there will be a retroactive adjustment to the bareboat charter payments so that from a commercial standpoint, the Company shall be treated as if it owned the Tonala on July 20, 2000, with the Company being credited for cash flow and debited for the debt service payments made after such date. The Company expects the acquisition to close in the second quarter of 2001.
William Chiles, Chief Executive Officer of the Company, commented:
``At this time all three of the rigs operated by the Company are employed and have on-going commitments for work carrying into the middle of the first quarter of 2001. Market rates for ultra-premium jackup rigs continue to be firm, ranging from $50,000 to $70,000 per day. The Company's ability to command rates at the high end of the market is a function of many variables, but the most significant considerations are the complexity of the drilling required to complete a well, the water depth in which the well is to be drilled, and finally, availability of competitive rigs. As relatively few jackup drilling rigs in the Gulf of Mexico can effectively drill complex wells on the 'shelf,' the Company's rigs usually earn their highest rates for such projects. The universe of rigs that are efficient when performing ''work-over`` activity is larger since these jobs are less complicated. In instances when positioning the drilling package over an existing platform is required, the Company can occasionally obtain premium rates reflecting the ability to extend the drilling package up to 70' from the rig platform (usually referred to as 'cantilever' reach).
``Prospects for drilling in the Gulf of Mexico appear good for the foreseeable future. Predictions are always subject to revision based on developments that unfold in the future, but at this time we envision activity being sustained at current levels. It appears that our customers are increasingly interested in drilling on the shelf. This interest appears to reflect their desire to commit capital in an area that can provide an immediate increase in marketable natural gas production.
``In recent weeks the Minerals and Management Service has been researching the potential for increasing natural gas reserves by exploring deeper strata on the Gulf of Mexico shelf. While it is well known that much of the acreage on the Gulf of Mexico continental shelf (0-400') has been explored, we believe that many of the existing wells are producing from formations approximately 8,000-15,000' below the seabed. In order to explore economically at deeper depths it is likely that additional seismic work is required, and it is unclear as to how much of that work will produce clear images. In some instances the deeper formations lie beneath salt deposits, although this is not the case in all instances.
``At this time management believes that the outlook through the second half of 2001 is promising. The prospects for 2002 will be influenced by the demand for natural gas during the winter heating season. The increase in drilling during the last eight months, in the Gulf of Mexico and on land, has led to increased production of natural gas. However, inventories remain well below those of last year and expectations are that the winter season will begin with inventories below the five-year average. Barring a winter even milder than last year, which is always a possibility, management expects that inventories at the end of the heating season will have been drawn to levels that will support active drilling programs in the Gulf of Mexico.''
Chiles Offshore Inc. is a provider of contract drilling services to the worldwide offshore oil and gas industry. The Company currently operates a fleet of three ultra-premium jackup rigs in the Gulf of Mexico, all of which have been delivered after May 1999. The Company is presently building its fourth and fifth ultra-premium jackup rigs, which are expected to be delivered in the 2nd and 3rd quarters of 2002. For further information, please contact Dick Fagerstal, Senior Vice President and Chief Financial Officer at (212) 621-9283 or (713) 339-3777 or via e-mail at: dickf@ckor.com and / or visit our website at www.chilesoffshore.com.
This release includes ``forward-looking statements'' intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Statements herein that describe the company's business strategy, industry outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements, including risks associated with level of oil and natural gas exploration in the Gulf of Mexico, the availability of competitive drilling rigs and level of oil and natural gas prices. We urge you to carefully consider the more detailed discussion of these risks and uncertainties under the heading ``Forward-Looking Statements'' in the company's Amendment No. 4 to Registration Statement on Form S-1. The forward-looking statements included in this release are made only as of the date of this release and the company undertakes no obligation to publicly update the forward-looking statements to reflect subsequent events or circumstances.
CHILES OFFSHORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share, per share, operating data and footnotes)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Operating revenue $16,015 $2,350 $38,670 $2,878
Costs and expenses:
operating 4,880 1,667 12,473 2,069
bareboat charter 2,468 --- 3,930 ---
general and administrative 701 382 2,047 827
depreciation and amortization 1,801 874 5,325 1,096
total costs and expenses 9,850 2,923 23,775 3,992
Operating income (loss) 6,165 (573) 14,895 (1,114)
Other income (expense):
interest expense - net of
capitalized interest (2,155) (1,018) (7,945) (1,394)
interest income 207 55 360 779
total other
income (expense) (1,948) (963) (7,585) (615)
Income (Loss) before income
taxes and extraordinary item 4,217 (1,536) 7,310 (1,729)
Provision for income tax including
change in tax filing status(A) (27,614) --- (27,614) ---
Income (Loss) before
extraordinary item (23,397) (1,536) (20,304) (1,729)
Extraordinary item, net of tax (1,820) --- (1,820) ---
Net income $(25,217) $(1,536) $(22,124) $(1,729)
Earnings (Loss) per common share - basic:
before extraordinary item $(2.49) $(0.31) $(2.61) $(0.34)
extraordinary item (0.20) --- (0.24) ---
Net income (loss) $(2.69) $(0.31) $(2.85) $(0.34)
Earnings (Loss) per common share - diluted:
before extraordinary item $(2.49) $(0.31) $(2.61) $(0.34)
extraordinary item (0.20) --- (0.24) ---
Net income (loss) $(2.69) $(0.31) $(2.85) $(0.34)
Weighted average common shares outstanding(B):
basic 9,388,466 5,014,338 7,766,876 5,014,338
diluted 9,388,466 5,014,338 7,766,876 5,014,338
EBITDA© $7,966 $301 $20,220 $(18)
Operating data:
Average dayrates(D) $58,027 $26,024 $53,563 $25,714
Average utilization(D) 100% 98% 100% 99%
(A) The Company incurred a one-time, non-cash deferred income tax charge
of $27,462,000 related to the change in corporate structure on
September 22, 2000.
(B) Pro-forma to reflect the initial public offering of shares on
September 22, 2000.
(C) As used herein, "EBITDA" is operating income plus depreciation and
amortization, before interest expense and applicable income taxes.
(D) Based on the rigs under operation including where applicable the
Tonala.
CHILES OFFSHORE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
September 30, December 31,
2000 1999
Cash & cash equivalents $67,658 $3,952
Other current assets 10,134 3,985
Total current assets 77,792 7,937
Property & equipment and other assets 206,323 195,309
Total assets $284,115 $203,246
Current liabilities $12,331 $11,668
Long term debt --- 117,000
Deferred income taxes 26,591 ---
Shareholders' equity 245,193 74,578
Total liabilities and
shareholders' equity $284,115 $203,246
CHILES OFFSHORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except operating data and footnotes)
(unaudited)
Supplementary Financial and Operational Data
Quarter Ended
9/30/00 6/30/00 3/31/00 12/31/99
Operating revenue $16,015 $14,309 $8,346 $4,773
Costs and expenses:
operating 4,880 4,514 3,080 2,363
bareboat charter 2,468 1,461 --- ---
general and administrative 701 637 709 500
depreciation and
amortization 1,801 1,769 1,754 1,381
total costs and
expenses 9,850 8,381 5,543 4,244
Operating income 6,165 5,928 2,803 529
Interest expense, net (1,948) (2,678) (2,960) (2,275)
Income (Loss) before income
taxes and extraordinary item 4,217 3,250 (157) (1,746)
Provision for income tax including
change in tax filing
status(E) (27,614) --- --- ---
Income (Loss) before
extraordinary item (23,397) 3,250 (157) (1,746)
Extraordinary item,
net of tax (1,820) --- --- (488)
Net income (loss) $(25,217) $3,250 $(157) $(2,234)
EBITDA(F) $7,966 $7,697 $4,557 $1,910
Operating data:
Average dayrates(G) $58,027 $54,628 $45,263 $33,071
Average utilization(G) 100% 100% 100% 100.0%
Rig operating days(G) 276 262 182 144
(E) The Company incurred a one-time, non-cash deferred income tax charge
of $27,462,000 related to the change in corporate structure on
September 22, 2000.
(F) As used herein, "EBITDA" is operating income plus depreciation and
amortization, before interest expense and applicable income taxes.
(G) Based on the rigs under operation including where applicable the
Tonala.
CHILES OFFSHORE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
Supplemental Financial and Operational Data
Quarter Ended
9/30/00 6/30/00 3/31/00 12/31/99
Cash & cash equivalents $67,658 $4,677 $4,246 $3,952
Current assets $77,792 $15,967 $10,016 $7,937
Property & equipment and
other assets $206,323 $207,887 $193,948 $195,309
Total assets $284,115 $223,855 $203,964 $203,246
Current liabilities $12,331 $11,394 $12,553 $11,668
Long term debt $--- $102,000 $117,000 $117,000
Deferred income taxes $26,591 $--- $--- $---
Total Shareholders' equity $245,193 $110,461 $74,411 $74,578
Total liabilities and
shareholders' equity $284,115 $223,855 $203,964 $203,246
Rig Fleet Summary
Rig Fleet: Design Delivery
Chiles Columbus LeTourneau Super 116 2Q 1999
Chiles Magellan LeTourneau Super 116 4Q 1999
Tonala LeTourneau Super 116 2Q 2000
Chiles Discovery KFELS Mod V "B" 2Q 2002
Chiles Option Rig # 1 - "TBN" KFELS Mod V "B" 3Q 2003
Rig Fleet: Location Status Customer
Chiles Columbus US Gulf of Mexico Working Remington
Chiles Magellan US Gulf of Mexico Working Shell
Tonala US Gulf of Mexico Working Shell
Chiles Discovery Singapore Construction ---
Chiles Option Rig # 1 - "TBN" Brownsville Construction ---
SOURCE: Chiles Offshore |
