News story on earnings:
(COMTEX) B: NORTON DRILLING SERVICES RELEASES OPERATIONS RESULTS
B: NORTON DRILLING SERVICES RELEASES OPERATIONS RESULTS
Lubbock, Texas-Oct. 14-FWN--NORTON DRILLING SERVICES,
Inc. today released the results of its operations for the
three and nine months ended Aug. 31, 1998.
Sherman Norton, Jr., chairman of the board, stated, "We
are pleased to report our income from continuing operations
of $1,047,880 for the nine months ending Aug. 31, 1998.
This is the second best nine-month period we have had since
1991. We accomplished this despite a drastic drop in oil
prices from 1997 levels. In 1997 oil prices ranged from $20
to $25 per barrel. Oil prices just recently reached a 12-
year low before recovering somewhat to current levels around
$15 per barrel. Due to the drop in oil prices rig activity
and rig rates have also dropped dramatically. Yet we were
able to operate profitably in what would normally be an
extremely depressed environment. Our success is due to
recognizing the problems and taking appropriate steps to
insure a profitable operation. These steps included the
securing of a contract to drill 38 wells in Mexico at a
day rate significantly above what can be charged in the U.S."
For the nine months ending Aug. 31, 1998, Norton
Drilling Services, Inc. had contract drilling revenues of
$22,602,152 as compared to $25,346,857 for the nine months
ending Aug. 31, 1997, a decrease of 10.8%. The decrease
in drilling revenues was due to a decrease in drilling rig utilization.
Average rig utilization was 67.3% in the nine months
ended Aug. 31, 1998, compared to 90.9% in the nine months
ended Aug. 31, 1997. The decrease in rig utilization was
due to the drop in oil prices during this year which
resulted in less demand for drilling services.
Direct drilling costs for the nine months ending Aug.
31, 1998 were $17,541,311 or 77.6% of revenues as compared
to $21,017,510 or 82.9% of revenues for the nine months
ending Aug. 31, 1997. The decrease in direct drilling costs
as a percent of revenues was because of the higher rates
that Norton is receiving for the rigs located in Mexico.
The decrease in the dollar amount of the direct job and rig
costs was due to the decrease in rig utilization.
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