Hamilton, Bermuda (February 24, 2011)
Fourth Quarter Highlights
· The quarter produced Operating revenues of NOK1,029.3 million, an increase of 9.7% sequentially and 41% year on year.
· Fourth quarter EBITDA of NOK118.9 million including NOK15.5 million one time items related to the merger with Allis Chalmers. Operating EBITDA at NOK134,4 million for the quarter.
· Net profit for the quarter of NOK0.9 million.
· Acquired Gray Wireline for USD160.5 million (inclusive of USD 3 million in cash) to expand the Cased Hole Wireline and Slickline service offering in the United States.
Year 2010 Highlights
· 2010 Operating Revenues of NOK3,687.5 million representing a 19% year on year increase
· 2010 EBITDA of NOK521.9 million including NOK29.4 million one time items. Operating EBITDA at NOK551.3 million for the year 2010
· Allis-Chalmers Energy Inc. (formerly NYSE:ALY) merger agreement executed in August 2010 was approved by ALY shareholders 23 February and the merger is now completed.
· On 27 January Seawell acquired Universal Wireline for USD 25.5 million on a debt and cash free basis.
· The Board propose to change the name of the new combined company to Archer Limited.
The Company will continue to trade on the OSE as SEAW until the name change has been approved by shareholders, and will then trade with the ticker ARCHER.
Archer is managed by the following executive team:
Jørgen Peter Rasmussen, Chief Executive Officer
Thorleif Egeli, Chief Operating Officer
Lars Bethuelsen, Chief Financial Officer
Max Bouthillette, General Counsel
Carlos Calad, VP for Marketing and Sales
Gunnar Lemvik, Senior VP for Human Resources and Chief Information Officer
Steve Russell, VP for Operational Personnel Management and Supply Chain
“We are very pleased with the closure of the merger with Allis Chalmers, and the launch of a new brand, a strong positioning into the well company and proud to be ready to service our customers all over the world,” says Jorgen Peter Rasmussen, CEO and President Archer, The well company
Fourth Quarter Operating Results
Consolidated revenues in the fourth quarter were NOK1,263.2 million compared to NOK1,069.9 million in the previous quarter. EBITDA for the fourth quarter amounted to NOK118.9 million including NOK15.5 million in acquisition and integration costs. Wireline and logging services continued to exceed expectations in the fourth quarter, while the results from engineering were below expectations.
Preliminary 2010 Operating Results
Consolidated revenues for the year 2010 were NOK4,328.9 million compared to NOK3,824.8 million in 2009. EBITDA for the year 2010 amounted to NOK521.9 compared to NOK490.9 in 2009. The EBITDA number absorbs NOK 29,4 in costs related to one off items. The company experienced growth in revenues and results from all operations in 2010. There were however some pressure on margins particular in Drilling Services division.
Net Financial Items
Interest expense for the fourth quarter was NOK53.9 million, including financing fees of NOK39.4 million, compared to NOK30.0 million, including financing fees of NOK10.2 million in the third quarter. Excluding financing fees, interest expense decreased in the fourth quarter as a result of reduced net interest bearing debt. Other financial items for the fourth quarter were expenses of NOK 5.3 million compared to NOK109.8 million for the third quarter, mainly related to unrealised foreign exchange losses.
Cash and cash equivalents, excluding restricted cash, totalled NOK1,023.6 million for the fourth quarter compared to NOK1,369.6 million for the previous quarter. Cash flow from operations and current asset reduction amounts to a total of NOK 625. This has been offset by cash consideration of USD160.5 million paid for Gray Wireline in December.
Multi-Currency Term and Revolving Credit Facility Agreement
In November, Seawell executed a five-year USD550 million multi-currency term and revolving facilities agreement with a syndicate of banks. The purpose of the new facilities is to finance the existing operation but also the additional indebtness triggered by taking over Allis Chalmers and its subsidaries.
A total of 225,400,050 shares of par value $2.00 each were issued and outstanding as of December 31, 2010. In addition, approximately 99 million shares (97% share consideration) will be issued in connection with the merger with Allis-Chalmers. In addition, a total of 6,507,000 options were outstanding as of December 31st and a further 3,770,000 options were granted January 3, 2011 under the company’s long-term employee incentive plans.
Merger with Allis-Chalmers Energy Inc.
Seawell announced on August 12, 2010 the execution of a definitive merger agreement providing for the acquisition of Allis-Chalmers Energy Inc. (NYSE: ALY) by Seawell. The combined company’s Drilling and Well Services comprising more than 7000 employees operates in more than 30 of the world’s key oil and gas regions. The merger is effective as of 23 February.
The combined company’s new Chief Executive Officer and President is Jørgen Peter Rasmussen and the Chief Operating Officer and Executive Vice-President is Thorleif Egeli.
Allis-Chalmers stand alone revenues in the fourth quarter were USD186 million, an increase of 6,9% sequentially and 44.9% year on year. Revenues for the year 2010 were USD659 million compared to USD506 million in 2009, an increase of 30.3%. The operational EBITDA was USD 33.2 million before one time charges and merger cost in the fourth quarter and USD121.3 for the year 2010. Total one off cost were USD 23.8 million for the quarter including loss on asset disposition of USD 10.6 million and USD 34.1 million for the year.. Allis-Chalmers reported a net loss for the year of USD42 million after one off costs.
Supplemental unaudited financial information for the forth quarter and twelve months ending 31 December 2010 for Allis-Chalmers is included as an attachment after the unaudited financial statements below.
Acquisition of Gray Wireline
Seawell Limited announced December 16, 2010 the acquisition of Gray Wireline from Centre Partners for an Enterprise value of 160.5 million. Seawell used existing cash reserves to complete the acquisition. For the twelve months ending December 31, 2010, Gray Wireline reported unaudited stand alone revenues of USD95.4 million and EBITDA of USD19.2 million.
Gray Wireline is the largest independent cased hole wireline company in the U.S. The Company is a leading provider of a full range of cased-hole wireline services in the Permian basin and in unconventional plays such as the Barnett, Marcellus, Haynesville, Bakken, Eagle Ford and Woodford shales. The Company also operates offshore units out of Louisiana.
Gray senior executives average over 25 years of experience in wireline operations and services and lead a solid core of regional and district managers, engineers and operators with a total of 390 employees. Gray positions Seawell to become a complete cased hole wireline solutions provider in the U.S. land market. In addition, Gray will serve as a distribution network for our TecWel logging technologies and C6-Technologies products and services in the US.
Attachment: 2010 4Q Results
For further information, please contact:
Jorgen Peter Rasmussen, +47 51 30 80 00
Thorleif Egeli, +47 51 30 80 00
Lars Bethuelsen, +47 51 30 80 00