Transocean Sedco Forex Reports 1999 Fourth Quarter and Full Year Results
Announces New Contracts and Sale of Coiled Tubing Business
HOUSTON, Feb. 14 /PRNewswire/ -- On December 31, 1999, Transocean Offshore
Inc. completed its merger with Sedco Forex Holdings Limited (Sedco Forex) and
changed its name to Transocean Sedco Forex Inc (NYSE: RIG). Since the company
accounted for the merger using the purchase method of accounting, with Sedco
Forex as the accounting acquiror, the reported results of Transocean Sedco
Forex Inc. for the three and twelve months ended December 31, 1999 and 1998
reflect only the operating results of Sedco Forex and do not include the
historical results of Transocean Offshore Inc.
For the three months ended December 31, 1999, Transocean Sedco Forex Inc.
reported a net loss of $12.4 million or $0.11 per pro forma diluted share on
revenues of $131.4 million. Operating expenses during the three month period
include pre-tax charges of $13.4 million related to provisions for accounts
receivable in West Africa and dayrate contract penalties in Brazil. Net
income was $91.1 million or $0.83 per pro forma diluted share on revenues of
$266.0 million during the corresponding three months in 1998.
For the twelve months ended December 31, 1999, Transocean Sedco Forex
Inc.'s net income totaled $58.1 million or $0.53 per pro forma diluted share
on revenues of $648.2 million. Net income was $341.6 million or $3.11 per pro
forma diluted share on revenues of $1,090.5 million during the corresponding
twelve months in 1998.
Unaudited results for Transocean Offshore Inc. on a historical, pre-merger
basis for the three months ended December 31, 1999 reflected net income of
$38.0 million or $0.38 per diluted share, before merger-related expenses of
$17.7 million. Revenues for the three month period totaled $184.6 million.
For the twelve months ended December 31, 1999, unaudited net income for
Transocean Offshore Inc. on a historical, pre-merger basis was $228.5 million
or $2.26 per diluted share, before merger-related expenses of $19.7 million.
Revenues for the twelve month period totaled $930.8 million.
Unaudited pro forma combined results for Transocean Sedco Forex Inc. for
the three months ended December 31, 1999 reflected a net loss of $2.1 million
or $0.01 per diluted share on pro forma revenues of $316.0 million. For the
twelve months ended December 31, 1999, unaudited pro forma combined results
for the company produced net income of $237.9 million or $1.13 per diluted
share on pro forma revenues of $1,579.0 million. The pro forma operating
results assume the spin-off and merger was completed on January 1, 1999.
These results do not reflect the effects of the following: reduced
depreciation expense related to conforming the estimated lives of Sedco Forex
rigs and the elimination of certain allocated costs from Schlumberger Limited,
which will not be incurred in the future. The pro forma financial data should
not be relied on as an indication of operations that Transocean Sedco Forex
would have achieved had the spin-off and merger taken place earlier or of the
future results that Transocean Sedco Forex may achieve.
J. Michael Talbert, president and chief executive officer of Transocean
Sedco Forex Inc. stated, "The combined utilization of our 62 fully owned,
chartered and active mobile offshore drilling units during the fourth quarter
and full year 1999 was 69% and 74%, respectively, including 71% and 77%,
respectively, for our semisubmersibles and drillships. 1999 fleet activity was
negatively influenced by a reduction in global exploration and production
spending programs, resulting from dramatically lower commodity prices in 1998.
These spending levels were estimated to have declined by more than 18% from
levels experienced during 1998. Although dayrates for mobile offshore
drilling units remain depressed, the 34% improvement in average crude oil
prices during 1999 has given rise to improving fleet activity. In
February 2000, the semisubmersible Transocean Richardson returned to work for
an estimated 45 days in the U.S. Gulf of Mexico following a brief idle period.
In the North Sea, we have recently secured new work assignments for the
semisubmersibles Transocean Leader and Sovereign Explorer. The Leader and
Sovereign Explorer are expected to return to work by April 2000 for firm
periods of approximately one year and approximately 60 days, respectively.
Both rigs have been idle since the fourth quarter of 1999. In West Africa,
operator interest in our jackup fleet has strengthened with several customers
discussing term contracts. Finally, in Southeast Asia, we currently expect
two semisubmersibles and two jackups to begin contracts by March 31, 2000,
which will place all of our semisubmersibles and jackups in the region on
contract."
At present, the company has 49 of its fully owned, chartered and active
mobile offshore drilling units either on contract or expected to commence
contracts shortly, including 35 out of 42 semisubmersibles and drillships.
Separately, the company announced an agreement with BP Amoco to cancel the
remaining 14 months of firm contract time on the semisubmersible Transocean
Amirante for a cash settlement of approximately $25 million. The contract
termination and settlement were based on an effective termination date of
January 4, 2000. The Transocean Amirante is currently idle in the U.S. Gulf
of Mexico.
Also, the company announced that it has signed an agreement to sell its
coiled tubing drilling services business, Transocean Petroleum Technology, to
Schlumberger. The planned sale, which includes 11 coiled tubing units in the
United Kingdom and Norwegian sectors of the North Sea, is expected to close by
February 29, 2000, subject to customary closing conditions. Excluded from the
planned sale are the company's joint ventures, Transocean-Nabors Drilling
Technology LLC in Alaska and Deep Vision LLC. Transocean Sedco Forex expects
to realize proceeds of approximately $25 million from the planned sale.
Statements regarding estimated term and commencement date of drilling
contracts, as well as any other statements that are not historical facts in
this release, are forward-looking statements that involve certain risks,
uncertainties and assumptions. These include but are not limited to operating
hazards and delays, risks associated with international operations, actions by
customers and other third parties and other factors detailed in the company's
filings with the Securities and Exchange Commission (SEC), which are available
free of charge on the SEC's website at www.sec.gov. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those indicated.
Transocean Sedco Forex Inc. is the world's largest offshore drilling
contractor, with an equity market capitalization in excess of $7.0 billion.
The company's modern and versatile mobile offshore drilling fleet, currently
totaling 74 fully or partially owned, chartered and managed rigs, is located
in every major oil and gas drilling region. Transocean Sedco Forex Inc.
specializes in technically demanding segments of the offshore drilling
business, including industry-leading positions in deepwater and harsh
environment drilling services. The company is listed on the New York Stock
Exchange under the symbol "RIG."
TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES
CONDENSED COMBINED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
(In thousands, except per share data)
Operating Revenues $ 131,396 $ 266,042 $ 648,236 $ 1,090,523
Costs and Expenses
Operating and
maintenance 112,563 141,954 450,756 562,565
Depreciation and
amortization 35,025 32,496 131,933 124,707
General and
administrative 4,426 7,039 16,703 25,986
152,014 181,489 599,392 713,258
Operating Income (Loss) (20,618) 84,553 48,844 377,265
Other Income
(Expense), Net
Equity in earnings
of joint ventures 1,891 2,874 5,610 5,389
Interest income 640 857 5,433 3,361
Interest expense, net
of amounts capitalized (88) (672) (10,250) (12,950)
Other, net (1,197) 928 (830) 956
1,246 3,987 (37) (3,244)
Income (Loss) Before
Income Taxes (19,372) 88,540 48,807 374,021
Income Tax
Expense (Benefit) (6,977) (2,574) (9,296) 32,443
Net Income (Loss) $ (12,395) $ 91,114 $ 58,103 $ 341,578
Earnings (Loss) Per
Share (Pro forma prior
to effective date
of the merger)
Basic $ (0.11) $ 0.83 $ 0.53 $ 3.11
Diluted $ (0.11) $ 0.83 $ 0.53 $ 3.11
Weighted Average
Shares Outstanding
(Pro forma prior to
effective date of
the merger)
Basic 109,697 109,697 109,697 109,697
Diluted 109,769 109,769 109,769 109,769
On December 31, 1999, Transocean Offshore Inc. completed its merger with
Sedco Forex Holdings Limited (Sedco Forex) and changed its name to Transocean
Sedco Forex Inc. Since the company accounted for the merger using the
purchase method of accounting, with Sedco Forex as the accounting acquiror,
the above Condensed Combined Statements of Operations for the three and
twelve months ended December 31, 1999 and 1998 reflect only the operating
results of Sedco Forex and do not include the results of historical Transocean
Offshore Inc.
SOURCE Transocean Sedco Forex Inc.
CO: Transocean Sedco Forex Inc.
ST: Texas
IN: OIL
SU: ERN CON TNM
02/14/2000 08:29 EST prnewswire.com |
