Transocean Offshore Inc. Reports Improved Fourth Quarter 1997 Results,
Up 146% From Previous Year
HOUSTON, Feb. 9 /PRNewswire/ -- Transocean Offshore Inc. (NYSE: RIG;
OSE) announced today that net income for the three months ended December
31, 1997 totaled $47.2 million or $0.46 per share diluted (basic
earnings per share of $0.47), a 146% improvement when compared to fourth
quarter 1996 net income of $19.2 million or $0.18 per share diluted
(basic earnings per share of $0.19). Revenues during the fourth quarter
of 1997 were $241.1 million, up 19% from the $201.9 million reported
during the corresponding period in 1996.
For the twelve months ended December 31, 1997, net income totaled $141.9
million or $1.38 per share diluted (basic earnings per share of $1.40)
on revenues of $892.0 million compared to reported net income of $78.0
million or $1.07 per share diluted (basic earnings per share of $1.09)
on revenues of $528.9 million during the corresponding period in 1996.
Prior year results include a non-recurring, after-tax gain of $4.3
million or $0.06 per share diluted relating to a rig disposal. Excluding
the impact of the non-recurring item, 1996 adjusted net income totaled
$73.7 million or $1.01 per share diluted (basic earnings per share of
$1.03).
Revenues derived from the Mobile Units business segment during the three
months ended December 31, 1997 were $205.9 million while operating
income, before depreciation and amortization and corporate general and
administrative expense, reached $110.9 million. The results compare to
revenues of $150.8 million and operating income of $59.4 million during
the corresponding period of 1996.
Revenues derived from the Drilling Services business segment during the
three months ended December 31, 1997 were $35.1 million while operating
activities resulted in an $8.5 million loss due primarily to the
previously announced $12.6 million accrued loss on a turnkey project in
the U.S. Gulf of Mexico. The results compare to revenues of $51.0
million and operating income of $0.3 million during the corresponding
period of 1996. Results for 1996 include certain non-core activities
from the Drilling Services line of business which were divested in May
1997.
J. Michael Talbert, Chairman and Chief Executive Officer of Transocean
Offshore Inc. said, ''Improved fourth quarter 1997 results were driven
by our Mobile Rig line of business which continues to benefit from full
utilization levels and increasing dayrates. During the fourth quarter of
1997, the average dayrate experienced among our 19 fully-owned and
active semisubmersibles and drillships reached $106,000 a day, up 31%
from a year ago. Based on current discussions with customers concerning
future fleet availability, we anticipate continued upward pressure on
rig dayrates.''
While discussing the business outlook for the offshore drilling industry
and Transocean Offshore, Talbert concluded, ''Recent industry surveys
indicate the possibility of increased exploration and production
spending in 1998 with a growing percentage of expenditures directed to
the offshore, particularly deepwater. Our customers are demonstrating a
tendency to plan spending over a long-term horizon as evidenced by
recent multi-year contract awards on our semisubmersibles Transocean
Arctic, Transocean Driller, Treasure Legend and a second Discoverer
Enterprise class drillship, to be named Discoverer Spirit. A lengthening
average contract duration translates into committed fleet time of
approximately 94%, 62% and 39% for each of the years 1998, 1999 and
2000, respectively and equates to a solid base of revenue over this
period.''
Separately, the Company announced that it has signed a contract with
Astillero y Talleres del Noroeste SA (Astano), allowing for the
construction of the Discoverer Spirit. Construction of the hull and
major marine systems will be completed at Astano's fabrication yard in
Ferrol, Spain. The ultra- deepwater, dual activity drillship is under
contract to Union Oil Company of California for 5-years plus 5 one-year
options. The Discoverer Spirit is expected to be in operation by the
first quarter of 2000.
The information above includes forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of
1934. These statements are based on certain assumptions and analyses
made by the Company in light of its experience and its perception of
historical and future trends, on general economic and business
conditions and on numerous other factors, including expected future
developments, many of which are beyond the control of the Company. Such
forward-looking statements are also subject to certain risks and
uncertainties as disclosed by the Company from time to time in its
filings with the Securities and Exchange Commission. As a result of
these factors, the Company's actual results may differ materially from
those indicated in or implied by such forward-looking statements.
Transocean Offshore Inc. is a worldwide offshore drilling company
engaged in contract drilling of oil and gas wells. Headquartered in
Houston, Texas, the Company specializes in technically demanding
segments of the offshore drilling business, including deepwater, harsh
environment, international turnkey and integrated drilling services.
TRANSOCEAN OFFSHORE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
1997 1996 1997 1996
(In thousands, except per share data)
Operating Revenues $241,052 $201,876 $891,962 $528,903
Costs and Expenses
Operating and maintenance 138,624 142,203 546,025 358,729
Depreciation and amortization 26,771 23,642 103,017 46,587
General and administrative 5,809 5,203 25,444 15,973
171,204 171,048 674,486 421,289
Operating Income 69,848 30,828 217,476 107,614
Other Income (Expense), Net
Equity in earnings of
joint ventures 2,063 1,343 10,196 5,168
Interest income 261 1,042 1,854 6,228
Interest expense, net of
amounts capitalized (6,351) (4,372) (22,853) (7,220)
Other, net 2,483 2,257 572 9,862
(1,544) 270 (10,231) 14,038
Income Before Income Taxes 68,304 31,098 207,245 121,652
Income Taxes 21,115 11,898 65,312 43,607
Net Income $ 47,189 $ 19,200 $141,933 $ 78,045
Earnings Per Share
of Common Stock
Basic $ 0.47 $ 0.19 $ 1.40 $ 1.09
Diluted $ 0.46 $ 0.18 $ 1.38 $ 1.07
Weighted Average Shares
Outstanding
Basic 100,323 102,763 101,234 71,678
Diluted 101,888 104,271 102,784 73,119
The Company acquired over 99 percent of the outstanding capital shares
of Transocean ASA, a Norwegian company, pursuant to an exchange offer
for Company common stock and cash completed in September 1996 and
subsequent purchases of Transocean ASA shares in November and December
1996 (the ''Combination''). All remaining outstanding shares were
purchased in July 1997. The operating results of Transocean ASA are
included from September 1, 1996, the effective date of the Combination.
In August 1997, the Board of Directors declared a two-for-one stock
split to be effected in the form of a 100% stock dividend. Such
distribution was made on September 19, 1997 to stockholders of record on
September 5, 1997. The weighted average shares outstanding have been
retroactively restated to reflect the increased number of shares of
common stock issued and outstanding.
SOURCE: Transocean Offshore Inc. |
