Marine Drilling Companies Reports a Prosperous 2000

Monday, April 30, 2001
Three years ago Marine Drilling Companies weathered a challenging year, posting its first operating lost in four years. Today the company has conquered those challenges, positioning Marine to make the most of a world of opportunities in fiscal 2000.

Marine Drilling Companies, Inc. is engaged in offshore contract drilling of oil and gas wells for independent and major oil and gas companies. Operations are conducted in the U.S. Gulf of Mexico and internationally. The company owns and operates a fleet of 17 offshore drilling rigs consisting of five independent leg jack-up units, four of which have a cantilever feature, 10 mat supported jack-up units, five of which have a cantilever feature, and two semi-submersible units. Additionally, the company owns one independent leg jack-up rig configured as an accommodation unit. Currently, 15 of the company’s rigs are located in the Gulf of Mexico. The three remaining rigs are in Southeast Asia, the North Sea, and Australia.

The company provides drilling services to a customer base that includes independent and major foreign and domestic oil and gas companies. As is typical in the industry, the company does business with a relatively small number of customers at any given time. During the first six months of 2000, the company performed services for approximately 33 different customers. For the period ended June 30, 2000, Western Australian Petroleum Pty., Ltd. accounted for approximately 28 percent of revenues, Esso Exploration, Inc. accounted for approximately 23 percent of revenues and Applied Drilling Technology, Inc., a subsidiary of Global Marine Inc., accounted for approximately 18 percent of the company’s total consolidated revenues. The loss of any one of the company’s customers could have a material adverse effect on the company’s profitability.

For fourth quarter 2000, Marine reported net income of $20 million on revenues of $80.1million, compared to net income of $2.5 million on revenues of $44.8 million for the same period in 1999. Average daily revenue and rig utilization for the quarter ended December 31, 2000, increased to $52,205 per operating day and 93 percent, respectively, compared to $33,643 per operating day and 90 pecent, respectively, for the fourth quarter of 1999.

For the year ended Dec. 31, 2000, net income was $48.3 million, or $0.81 per share, on $264.0 million of revenue versus a net loss of $6.1 million, or $0.11 per share, on revenues of $115.4 million for 1999.

Jan Rask, president and CEO of Marine, said, “We are very pleased with our fourth quarter results, which improved approximately 31 percent over our third quarter results due primarily to higher dayrates for our jackup fleet in the Gulf of Mexico. Average dayrates for the fourth quarter were 14 percent higher than the third quarter and these rates have continued to increase during the first quarter of 2001. Additionally, our fourth quarter results do not reflect any dayrate increases related to the Marine 700 since we are still awaiting the arbitration hearing. We are comfortable with consensus earnings estimates for the first quarter of 2001 and all indications are that 2001 earnings will be significantly higher than the $0.81 per share earned in 2000.”

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