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EXHIBIT 99.1
ANALYST CONTACT: Jeffrey L. Chastain NEWS RELEASE
713 232 7551
MEDIA CONTACT: Guy A. Cantwell FOR RELEASE: October 24, 2000
713 232 7647
TRANSOCEAN SEDCO FOREX INC. REPORTS
THIRD QUARTER 2000 RESULTS
HOUSTON--Transocean Sedco Forex Inc. (NYSE: RIG) today announced that
net income for the three months ended September 30, 2000 was $49.3 million
or $0.23 per diluted share on revenues of $314.5 million. The results
include an extraordinary gain of $1.4 million or $0.01 per diluted share,
relating to the early termination of certain debt, as well as a net gain of
$7.8 million or $0.03 per diluted share resulting from the sale of two
offshore rigs, partially offset by net charges resulting from adjustments
to provisions for legal claims. Excluding the after-tax impact of the
extraordinary gain and the net gain resulting primarily from the sale of
rigs, net income for the three months ended September 30, 2000 was $40.8
million or $0.19 per diluted share. The quarterly results compare favorably
with net income of $35.9 million or $0.17 per diluted share reported for
the second quarter of 2000. Revenues in the preceding quarter of 2000 were
$299.2 million. For the three months ended September 30, 1999, net income
was $31.8 million or $0.29 per diluted share on revenues of $165.3 million.
The December 1999 merger of Transocean Offshore Inc. and Sedco Forex
Holdings Limited (Sedco Forex) was accounted for as a purchase, with Sedco
Forex as the acquiror for accounting purposes. Accordingly, results for the
three and nine months ended September 30, 1999 reflect Sedco Forex
historical results only and exclude historical results of Transocean
Offshore Inc.
For the nine months ended September 30, 2000, net income totaled
$117.7 million or $0.56 per diluted share on revenues of $914.6 million.
Results for the first nine months of 2000 include the previously mentioned
extraordinary gain, the net gain resulting primarily from the rig sales, as
well as a cash settlement of $25.1 million or a net $0.08 per diluted share
relating to the early termination of a rig contract. During the first nine
months of 1999, net income was $70.5 million or $0.64 per diluted share on
revenues of $516.8 million and included charges totaling $42.0 million or a
net $0.30 per diluted share relating to severance costs and provisions for
legal claims.
Average utilization of the company's 61 fully owned or chartered and
active mobile offshore drilling units continued to improve, reaching 81%
for the three months ended September 30, 2000, up from 75% and a pro forma
74% for the three months ended June 30, 2000 and September 30, 1999,
respectively. The company's fleet of 42 fully owned or chartered and active
semisubmersibles and drillships (floaters) saw utilization improve to 84%,
up from 75% in both the previous three months ended June 30, 2000 and the
third quarter of 1999 on a pro forma basis.
J. Michael Talbert, President and Chief Executive Officer of
Transocean Sedco Forex, stated, "As expected, we continued to witness an
improvement in the average fleet utilization during the third quarter of
2000, which served as the primary contributor to the modest recovery in
revenues and operating income. Revenues improved from the previous quarter
in 2000 by 5% while operating income increased 20%, excluding the gain on
the sale of the semisubmersible rig Transocean Discoverer and the
multi-purpose service jackup rig Mr. John. Another contributing factor was
the
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delivery of a second Discoverer Enterprise-class drillship, the Discoverer
Spirit, which commenced drilling operations in early September for Spirit
Energy 76. Regionally, fleet utilization improvement was most evident in
the U.K. sector of the North Sea, where the measure rose to 79% compared to
65% during the second quarter of 2000. Utilization was higher in the U.S.
Gulf of Mexico, where the Discoverer Enterprise's operational performance
improved significantly and in the Middle East, where the semisubmersible
rig Actinia was reactivated.
"Although we are currently witnessing improving market dayrates in all
of our areas of operation, the average dayrate on our 61 fully owned or
chartered and active mobile offshore drilling units declined to $67,200
during the three months ended September 2000. The quarterly average
compared to $69,100 and a pro forma $79,700 during the three months ended
June 2000 and September 1999, respectively. The decline in the average
dayrate was due largely to contracts accepted at more competitive rates for
rigs re-entering the active fleet and rigs previously contracted at
dayrates negotiated prior to the onset of weaker market conditions
declining to the lower, current market level. This is particularly evident
in the floater category where the average dayrate was $81,400 during the
three months ended September 2000, down from $85,900 and a pro forma
$101,900 during the three months ended June 2000 and September 1999,
respectively."
In addressing the near to medium-term prospects for the offshore
drilling industry, Talbert added, "Our customers have initiated a more
active offshore drilling campaign during the second half of 2000 due
primarily to the continued strengthening of industry fundamentals and a
growing conviction that average commodity prices should be sustained at
levels which produce better project economics. Gradually, this growing
conviction is translating into improved business prospects, particularly as
we enter 2001. These improved prospects are best evidenced by recent
contract awards and extensions on a number of rigs including the Transocean
Leader, Sovereign Explorer, Transocean John Shaw, Sedco 601, Transocean
Comet and Transocean Mercury, located in the North Sea, Asia and in the
Middle East regions. These recent contract awards and extensions represent
approximately $112 million in revenues over the duration of the contracts
and improve the company's committed fleet time during 2001 to approximately
41%."
Finally, Talbert provided an update on the company's newbuild program,
stating, "Our new construction program achieved two significant milestones
recently with the deliveries of the drillship Discoverer Spirit and jackup
rig Trident 20. As stated earlier, the Discoverer Spirit, the second of
three Discoverer Enterprise-class, ultra-deepwater drillships, was
delivered in September to Spirit Energy 76, a division of Unocal, under a
five-year, estimated $372 million contract. This rig delivery was followed
by the completion and October 21 delivery of the jackup rig Trident 20,
which commenced a three-year, estimated $137 million contract with a
subsidiary of Elf in the Caspian Sea."
Four units remain in the Transocean Sedco Forex newbuild program,
including the final Discoverer Enterprise-class rig, the Discoverer Deep
Seas, which has an expected delivery date of late fourth quarter 2000, and
three new fifth-generation Sedco Express-class semisubmersibles - the Sedco
Express, Cajun Express and Sedco Energy. Talbert concluded by saying, "Our
three Sedco Express-class semisubmersibles are in the late stages of
project completion, which includes the testing and commissioning of the
software that controls the drilling equipment. This has proven to be time
consuming due to the complexity of the software and limited availability of
third-party resources. As a result, we have extended the expected delivery
dates on all three units. Our current
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expectation is to complete and deliver the Sedco Express during the late
fourth quarter of 2000, followed by the completion and delivery of the
Cajun Express in January 2001 and the Sedco Energy in March 2001."
Drilling rig status and contract information on Transocean Sedco
Forex's offshore drilling fleet has been condensed into a report entitled
"Monthly Fleet Update" and will be made publicly available by the end of
October 2000 through the company's website at www.deepwater.com. Once
available, the report can be found in the investor resources segment of the
site. The report will also be available through a free monthly email
distribution. To be added to the email distribution, please contact Jeffrey
L. Chastain, Director of Investor Relations and Communications at
[email protected] or at fax number 1-713-232-7031.
Statements regarding future market conditions, future dayrates, rig
delivery dates, estimated term, commencement date of drilling contracts,
estimated contract revenues and utilization trends and prospects, as well
as any other statements that are not historical facts in this release, are
forward-looking statements that involve certain risks, uncertainties and
assumptions. These include but are not limited to operating hazards and
delays, risks associated with international operations, actions by
customers, including their right to terminate contracts for late delivery,
actions by other third parties, the future price of oil and gas, risks
relating to acquisitions and other factors detailed in the company's
filings with the Securities and Exchange Commission (SEC), which are
available free of charge on the SEC's website at www.sec.gov. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
indicated.
Transocean Sedco Forex Inc. is the world's largest offshore drilling
contractor, with a current equity market capitalization in excess of $12
billion. The company's mobile offshore drilling fleet is comprised of 71
rigs, including four newbuilds not yet active. This modern and versatile
fleet is located in every major offshore oil and gas drilling region.
Transocean Sedco Forex Inc. specializes in technically demanding segments
of the offshore drilling business, including industry-leading positions in
deepwater and harsh environment drilling services. The company is listed on
the New York Stock Exchange under the symbol "RIG."
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TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Operating Revenues $ 314,483 $ 165,250 $ 914,575 $ 516,840
Costs and Expenses
Operating and maintenance 192,208 98,508 561,950 338,041
Depreciation and amortization 64,353 33,169 193,779 96,908
General and administrative 9,189 4,093 31,594 12,277
265,750 135,770 787,323 447,226
Gain (Loss) from sale of assets 11,314 (142) 13,564 (107)
Operating Income 60,047 29,338 140,816 69,507
Other Income (Expense), Net
Equity in earnings of joint ventures 2,592 1,192 7,584 3,719
Interest income 1,724 624 4,636 4,793
Interest expense, net of amounts capitalized (1,806) (3,251) (2,110) (10,162)
Other, net 26 716 1,268 367
2,536 (719) 11,378 (1,283)
Income Before Income Taxes, Minority
Interest and Extraordinary Item 62,583 28,619 152,194 68,224
Income Tax Expense (Benefit) 14,628 (3,230) 35,413 (2,319)
Minority Interest Expense 101 45 507 45
Income Before Extraordinary Item 47,854 31,804 116,274 70,498
Gain on Extraordinary Item, Net of Tax 1,424 -- 1,424 --
Net Income $ 49,278 $ 31,804 $ 117,698 $ 70,498
Basic Earnings Per Share (Pro forma prior
to the effective date of the merger)
Income Before Extraordinary Item $ 0.22 $ 0.29 $ 0.55 $ 0.64
Gain on Extraordinary Item, Net of Tax 0.01 -- 0.01 --
Net Income $ 0.23 $ 0.29 $ 0.56 $ 0.64
Diluted Earnings Per Share (Pro forma prior
to the effective date of the merger)
Income Before Extraordinary Item $ 0.22 $ 0.29 $ 0.55 $ 0.64
Gain on Extraordinary Item, Net of Tax 0.01 -- 0.01 --
Net Income $ 0.23 $ 0.29 $ 0.56 $ 0.64
Weighted Average Shares Outstanding (Pro
forma prior to the effective date of the merger)
Basic 210,526 109,564 210,356 109,564
Diluted 212,016 109,636 211,597 109,636
</TABLE>
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On December 31, 1999, Transocean Offshore Inc. completed its merger with Sedco
Forex Holdings Limited (Sedco Forex), and changed its name to Transocean Sedco
Forex Inc. Since the company accounted for the merger using the purchase method
of accounting, with Sedco Forex as the accounting acquiror, the above Condensed
Consolidated Statements of Operations for the three and nine months ended
September 30, 1999 reflect only the operating results of Sedco Forex and do not
include the results of historical Transocean Offshore Inc.
