Transocean Offshore Inc. Reports First Quarter
Results Mobile Rig Contract Backlog and Turnkey
Performance Contribute to Record Results
HOUSTON, April 22 /PRNewswire/ -- Transocean Offshore Inc. (NYSE, OSE: RIG) announced today that net income for
the three months ended March 31, 1999 reached a record level of $85.2 million or $0.85 per diluted share on revenues of
$306.4 million. The results compare to net income of $77.6 million or $0.77 per diluted share on revenues of $258.3 million
during the corresponding three months of 1998. First quarter 1998 results included a non-recurring after-tax gain of $13.9
million or $0.14 per diluted share arising from the settlement of a dispute with Global Marine Inc. Excluding the impact of the
settlement, net income for the first three months of 1998 was $63.7 million or $0.63 per diluted share.
Revenues derived from the Company's Mobile Units business segment totaled $250.9 million during the three months ended
March 31, 1999, while operating income, before depreciation and amortization and general and administrative expenses, was
$150.2 million. The current quarter segment revenue and operating income represent an improvement of 12% and 20%,
respectively, when compared to revenues of $223.1 million and operating income of $125.1 million during the initial three
months of 1998.
Utilization of the Company's 26 fully-owned and active mobile offshore drilling units was 90% during the three months ended
March 31, 1999, compared to 98% during the same period in 1998. Two of the Company's jackup rigs, Transocean Jupiter
and Transocean III, and one semisubmersible, Transocean Explorer, were idle at the conclusion of the current year quarter.
During the three months ended March 31, 1999, revenues from the Company's Drilling Services business segment were $55.5
million while operating income, before depreciation and amortization and general and administrative expenses, was $9.6 million.
The results compare to revenues of $35.2 million and operating income of $1.3 million during the corresponding period in
1998. First quarter 1999 results include better than expected revenues and operating income from the third and final turnkey
well in Mexico.
Commenting on the Company's quarterly performance, J. Michael Talbert, Chairman and Chief Executive Officer of
Transocean Offshore Inc., stated, ''The Mobile Units business segment continued to benefit from a backlog of contracts signed
prior to the weakening of the market for offshore drilling rigs. During the quarter, utilization of our 20 fully owned and active
semisubmersibles and drillships, or floating rigs, was 93%, down from 99% in both the fourth quarter and corresponding three
months of 1998. However, during the first quarter of 1999, the semisubmersible Transocean Arctic and drillship Discoverer
534 commenced new contracts with increased dayrates, and the drillship Discoverer Seven Seas received a premium dayrate
while drilling a well in over 7,000 feet of water. These contract changes contributed to an improvement in the average dayrate
on our 20 floating rigs to $132,100. The first quarter 1999 figure compares to an average dayrate of $125,100 during the
fourth quarter of 1998 and $112,800 during the three months ended March 31, 1998.
Operating results within our Drilling Services business segment improved during the quarter due to the completion of the
turnkey portion and subsequent daywork on the third and final well associated with our turnkey drilling project in Mexico. The
well contributed $47.1 million in revenue and $9.2 million in operating income.''
In closing, Talbert stated, ''Crude oil prices have recently reached levels not seen since early 1998, suggesting there could be
an improving fundamental outlook for the offshore drilling business. However, despite the commodity price improvement, we
expect our customers to continue a cautious approach to exploration and production spending until these commodity price
gains prove to be sustainable. The reduced spending levels seen to date have created a highly competitive market for offshore
drilling rigs, causing a decline in dayrates for all classes of offshore rigs. We currently expect 13 of our rigs to complete
contracts before the conclusion of 1999. Securing follow-on contracts for these rigs will be our greatest challenge during the
year.'' At present, Transocean Offshore has 75% and 42% of its fleet days committed during 1999 and 2000, respectively.
Current contract commitments extend into 2005, equating to approximately $2.6 billion in revenue.
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 an international 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 industry-leading positions in deepwater and harsh environment drilling services. The Company also provides
international turnkey, coiled tubing and integrated drilling services to customers worldwide.
TRANSOCEAN OFFSHORE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
1999 1998
(In thousands, except per share data)
Operating Revenues $ 306,359 $ 258,313
Costs and Expenses
Operating and maintenance 146,591 131,948
Depreciation and amortization 32,001 28,078
General and administrative 6,669 6,968
185,261 166,994
Operating Income 121,098 91,319
Other Income (Expense), Net
Equity in earnings of joint
ventures 3,224 2,333
Interest income 548 868
Interest expense, net of amounts
capitalized (2,388) (7,107)
Gain on termination of cash flow
sharing agreement -- 21,386
Other, net (1,587) 1,215
(203) 18,695
Income Before Income Taxes 120,895 110,014
Income Taxes 35,664 32,454
Net Income $ 85,231 $ 77,560
Earnings Per Share
Basic $ 0.85 $ 0.78
Diluted $ 0.85 $ 0.77
Weighted Average Shares Outstanding
Basic 100,329 99,673
Diluted 100,758 100,683
Dividends Paid Per Share $ 0.03 $ 0.03 |
