Superior Energy Closes Hallin Marine Acquisition, Provides FY10 Earnings Guidance
02 February 2010Superior Energy Services Inc, a provider of oilfield services and equipment, said it closed its previously announced acquisition of Hallin Marine Subsea International Plc on January 26. In addition, the company provided forecast for fiscal 2010 and also announced details of special charges that will impact its fourth quarter earnings.
The New Orleans, Louisiana-based company said it paid about $162 million to purchase all of the equity in Hallin, in addition to extinguishing Hallin's debt of approximately $55 million. Hallin provides integrated subsea services and engineering solutions, focused on installing, maintaining and extending subsea wells.
The company currently expects the GAAP loss per share for the fourth quarter of 2009 to be between approximately $1.40 and $1.50. Excluding items, earnings per share is expected to be between about $0.19 and $0.23.
On average, twelve analysts polled by Thomson Reuters currently expect the company to report earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.
Superior expects its fourth quarter 2009 earnings to be impacted by a non-cash, pre-tax impairment charge of up to about $120 million or $0.98 per share related to its domestic land well intervention assets and pre-tax charges of about $16 million or $0.13 per share associated with transaction-related expenses for the Hallin acquisition, a write down of components from one of its 265-ft. class liftboats and a reduction of the net realizable value of accounts receivable related to continuing economic uncertainties in Venezuela.
Additionally, the company increased the estimated total cost of the wreck removal project, resulting in an increase in pre-tax expenses of about $69 million or $0.56 per share in the fourth quarter of 2009. The wreck removal project is still expected to be completed by mid-year 2010. In January 2010, Superior received cash payments of about $69 million and expects to collect the remaining $280 million payable for the project by the end of the third quarter of 2010.
In addition,during the fourth quarter of 2009, the company incurred downtime on certain marine assets that had an estimated pre-tax impact of $8 million.
The company also provided 2010 earnings per share guidance of $1.50 to $1.70. Twelve Street analysts currently expect the company to report earnings of $1.61 per share for 2010.
Terry Hall, chairman and chief executive officer of Superior Energy Services, Inc. stated, "Historically, we have not provided annual earnings guidance, but we believe providing earnings guidance for 2010 will be helpful to investors as we wind down the wreck removal project, ramp up activity associated with Bullwinkle and expand our international and subsea presence with Hallin. The earnings guidance provided includes those transactions and reflects our current geographic and product/services outlook. Due to the seasonal nature of the Gulf of Mexico and the fact that many of our well intervention services lag a recovery in the rig count, we anticipate that our 2010 earnings will be weighted more toward the second half of the year."