Grey Wolf, Inc. Announces Operating Results for the Quarter Ended March 31, 2000
HOUSTON, April 25 /PRNewswire/ -- Grey Wolf, Inc. (Amex: GW) ("Grey Wolf"
or the "Company"), reported a net loss of $5.7 million, or $0.03 per share on
a diluted basis, for the three months ended March 31, 2000, compared to a net
loss of $9.5 million, or $0.06 per share on a diluted basis, for the first
quarter of 1999. Revenues for the first quarter of 2000 were $58.7 million
compared to revenues for the first quarter of 1999 of $37.7 million. Included
in the loss for the first quarter of 1999, is a non-cash extraordinary loss of
$0.4 million (net of applicable tax) for the write-off of deferred financing
costs from the early extinguishment of the Company's then existing line of
credit.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the first quarter of 2000 were $6.8 million compared with negative EBITDA
of $200,000 for the first quarter of 1999. The $6.8 million of EBITDA for the
first quarter of 2000 was $7.9 million and $3.2 million greater than EBITDA of
negative $1.1 million and $3.6 million for the third and fourth quarters of
1999, respectively.
The quarter-over-quarter improvement in results from the fourth quarter of
1999 to the first quarter of 2000 can be attributed in part to an increase in
rig utilization from 54% to 56%, combined with a $587 increase in the average
operating margin to $1,569 per rig day in the first quarter of 2000.
"The first quarter of 2000 marks the third sequential quarter of improving
results and reflects our focus on improving margins through increasing
dayrates and cost control while selectively reactivating drilling rigs,"
commented Mr. Tom Richards, Chief Executive Officer of Grey Wolf. "Commodity
prices continue to be strong, and we look forward to further increases in
demand as our customers seek to replace production and reserves through the
drill bit."
During the first quarter of 2000, the Company's rig fleet operated a total
of 5,530 days compared to 3,961 days for the first quarter of 1999. Domestic
utilization for the first quarter of 2000 was 56% compared to 39% for the
first quarter of 1999. Since the second quarter of 1999, the Company has
reactivated 15 drilling rigs from cold-stacked status bringing the marketed
rig fleet to a total of 75.
Average revenue per day for the first quarter of 2000 was $10,616 versus
$9,513 for the first quarter of 1999. The increase in average revenue per day
during the first quarter of 2000 is due to increases in the average per day
rate received on both daywork and turnkey contracts. Average revenue per day
for the first quarter of 2000 also was higher than the third and fourth
quarters of 1999, which had average revenues per day of $8,449 and $9,559,
respectively. The improvement between the third and fourth quarters of 1999
and the first quarter of 2000 was also attributable to increases in the
average per day rate received on both turnkey and daywork contracts. Leading
edge bid rates continue to increase with current bid rates ranging from $6,800
to $7,750 per day without fuel.
Mr. Richards went on to say, "While utilization for the second quarter is
consistent with utilization for the first quarter, based on increasing bid
rates and bid activity, we believe operating results for the second quarter of
2000 will be better than the first quarter of 2000."
The Company's cash balance at the end of the first quarter of 2000 was
$13.7 million. As of today, the Company's cash balance is approximately
$66.7 million, which includes the proceeds from the sale of 13,000,000 shares
of the Company's common stock which closed on April 4, 2000. The Company
netted $52.0 million from the offering. At March 31, 2000, the Company had
total long-term indebtedness of $250.0 million with no borrowings outstanding
under the Company's $50.0 million line of credit. Interest expense for the
first quarter of 2000 was $6.0 million. Capital expenditures for the current
quarter were $2.5 million, which is in line with estimated capital
expenditures for the year 2000 of between $13.2 million and $19.3 million,
depending on the level of utilization and the number of cold-stacked rigs
ultimately reactivated.
This press release contains forward-looking statements within the meaning
of the Securities Act of 1933 and the Securities Exchange Act of 1934. The
specific forward-looking statements cover our expectations and projections
regarding increasing demand, second quarter utilization and operating results,
reactivation of our cold-stacked rigs, attainment of our margin goals, and
capital expenditures in 2000. These forward-looking statements are subject to
a number of important factors, many of which are beyond our control, that
could cause actual results to differ materially, including oil and gas prices
and trends in those prices, the pricing and other competitive policies of our
competitors, uninsured or under-insured casualty losses, unexpected costs
under turnkey drilling contracts, weather conditions, and the overall level of
drilling activity in our market areas. Please refer to our Annual Report on
Form 10-K for the year ended December 31, 1999, for additional information
concerning risk factors that could cause actual results to differ from these
forward-looking statements.
Grey Wolf , Inc., headquartered in Houston, Texas, is a leading provider
of contract oil and gas land drilling services in the Ark-La-Tex, Gulf Coast,
Mississippi/Alabama and South Texas regions with a total drilling rig fleet of
125.
Three Months Ended March 31,
2000 1999
(In thousands, except per
share amounts)
(unaudited)
Revenues $ 58,709 $ 37,680
Costs and expenses:
Drilling operations 50,035 36,145
Depreciation and amortization 8,889 7,735
Provision for doubtful accounts 44 91
General and administrative 1,810 1,611
Total costs and expenses 60,778 45,582
Operating income (loss) (2,069) (7,902)
Other income (expense):
Gain on sale of assets 94 65
Interest income 184 423
Interest expense (5,975) (5,992)
Other (22) (52)
Other income (expense), net (5,719) (5,556)
Income (loss) before income taxes (7,788) (13,458)
Income tax expense (benefit) (2,096) (4,389)
Income (loss) before extraordinary item (5,692) (9,069)
Extraordinary item, net of taxes --- (420)
Net income (loss) applicable to
Common stock $ (5,692) $ (9,489)
Net income (loss) per Common share:
Basic and Diluted:
Before extraordinary item $ (0.03) $ (0.06)
Extraordinary item, net of taxes --- (0.00)
Basic and Diluted Net Income/Loss
per Common share $ (0.03) $ (0.06)
Weighted average Common shares
outstanding:
Basic 165,253 165,065
Diluted 165,253 165,065
Operating data for the periods:
Number of operating days 5,530 3,961
Number of total available days 9,919 10,260
Utilization rate 56% 39%
Average revenue per day $ 10,616 $ 9,513
Rigs at March 31, 2000:
Marketable rigs 71
Labor contract - non-owned rig 1
Cold-stacked rigs 37
Inventory rigs 17
Total 126
SOURCE Grey Wolf, Inc.
CO: Grey Wolf, Inc.
ST: Texas
IN: OIL
SU: ERN
04/25/2000 07:55 EDT prnewswire.com |
