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Superior Energy Services Announces Third Quarter 2021 Results and Conference Call

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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES - ASSETS HELD FOR SALE

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES - ASSETS HELD FOR SALE
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES - ASSETS HELD FOR SALE
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES - ASSETS HELD FOR SALE

HOUSTON, Dec. 02, 2021 (GLOBE NEWSWIRE) -- Superior Energy Services, Inc. (the “Company”) filed its Form 10-Q for the period ending September 30, 2021 on December 2, 2021. In accordance with the Company’s Shareholders Agreement, it will host a conference call with shareholders on Monday, December 6, 2021.

Mike McGovern, Executive Chairman of the Board and Principal Executive Officer, commented, “The Company’s third quarter is reflective of a significant step along our transformation journey. We completed the exit of our fluids management business, announced the sale of our service rig business, and continued the sales of our pressure pumping assets. We expect to complete our exit from the US Land service business by the end of the year. The new Superior is well positioned to capitalize on opportunities in our higher margin business lines as we move forward into 2022.”

McGovern added, “In addition to our dedicated focus on the earnings of the business, our divestitures support another strategic goal to have a continuously improving ESG program. In 2021 alone we’ve exited our water hauling and storage businesses and land service rig operations. Divesting these businesses has significantly reduced our truck and trailer fleet which will reduce our overall carbon footprint. We continue to have active dialogue with customers who are focused on ESG performance and accountability within their own supply chain. Superior’s ESG focus is well aligned with the future needs of our industry.”

Third Quarter 2021 Results

The Company reported a loss from operations for the third quarter of 2021 of $44.0 million on revenue of $178.6 million. This compares to a loss from operations of $36.5 million for the second quarter of 2021 on revenues of $165.9 million. In the third quarter of 2020, the Company reported a loss from operations of $59.4 million on revenues of $136.0 million.

Adjusted EBITDA (a non-GAAP measure) of $31.4 million for the quarter was up slightly compared to $30.0 million in second quarter 2021 and up significantly from a negative EBITDA in the third quarter 2020. Refer to page 10 for a Reconciliation of Adjusted EBITDA to GAAP results.

The valuation process under fresh start accounting caused certain fully depreciated assets to be assigned an estimated fair value of $282.1 million and remaining useful life of less than 36 months. Depreciation expense for the first, second and third quarters of 2021 was $45.6 million, $57.3 million and $56.9 million respectively. Depreciation expense for the fourth quarter is expected to be approximately $50.7 million, and $75.1 million and $46.5 million for the years ended December 31, 2022 and 2023, respectively.

Third Quarter 2021 Geographic Breakdown

U.S. land revenue was $32.3 million in the third quarter of 2021, an increase of 17% compared with revenue of $27.6 million in the second quarter of 2021. U.S. offshore revenue was $51.8 million in the third quarter of 2021, a decrease of 3% compared with revenue of $53.5 million in the second quarter of 2021. International revenue of $94.6 million increased by 11%, as compared to revenue of $84.9 million in the second quarter of 2021.

Segment Reporting

The Rentals segment revenue in the third quarter of 2021 was $76.2 million, a 13% increase from second quarter 2021 revenue of $67.2 million. The Well Services segment revenue in the third quarter of 2021 was $102.4 million, a 4% increase from the second quarter 2021 revenue of $98.7 million.

Discontinued Operations

The Company reported a net loss from discontinued operations for the third quarter of 2021 of $5.2 million on revenue of $17.0 million. This compares to a net loss from discontinued operations for the second quarter of 2021 of $19.4 million on revenue of $45.1 million.

At the end of the third quarter 2021, assets held for sale totaled $87.9 million compared to $170.2 million at the end of the second quarter of 2021. The reduction in assets held for sale relate primarily to the disposition of our subsidiary Complete Energy Services, pressure pumping asset sales, impairments related to the assets of SPN Well Services and a decline in discontinued operations working capital. The Company expects the majority of the remaining assets held for sale to be disposed of during the fourth quarter of 2021. Approximately $26.8 million of assets held for sale at the end of the third quarter relate to various real estate holdings across US basins that we expect to monetize in 2022. Refer to page 6 for a bridge of second quarter assets held for sale to third quarter.

Total cash proceeds received from the sale of non-core assets through November 30, 2021 are $76.1 million.

Liquidity

As of November 30, 2021, the Company had cash, cash equivalents, and restricted cash of approximately $370.9 million and availability remaining under our ABL Credit Facility of approximately $79.3 million, assuming continued compliance with the covenants under our ABL Credit Facility.

As of November 30, 2021, the Company owned 3.6 million shares of Select Energy Services Class A common stock (NYSE: WTTR).

Conference Call Information

The Company will host a conference call on Monday, December 6, 2021 at 10:00 a.m. Eastern Time. To listen to the call via a live webcast, please visit Superior’s website at ir.superiorenergy.com and use access code 1516637. You may also listen to the call by dialing in at 1-877-800-3682 in the United States and Canada or 1-615-622-8047 for International calls and using access code 1516637. The call will be available for replay until December 31, 2021 on Superior’s website at ir.superiorenergy.com. If you are a shareholder and would like to submit a question, please email your question beforehand to Wendell York at ir@superiorenergy.com.

About Superior Energy Services

Superior Energy Services serves the drilling, completion and production-related needs of oil and gas companies worldwide through a diversified portfolio of specialized oilfield services and equipment that are used throughout the economic life cycle of oil and gas wells. For more information, visit: www.superiorenergy.com.

Forward-Looking Statements

This press release contains, and future oral or written statements or press releases by the Company and its management may contain, certain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks” and “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact regarding the Company’s financial position, financial performance, depreciation expense, liquidity, strategic alternatives (including dispositions and the timing thereof), market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company’s management in light of its experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties, including but not limited to conditions in the oil and gas industry and the availability of third party buyers, that could cause the Company’s actual results to differ materially from such statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of the Company, which could cause actual results to differ materially from such statements.

While the Company believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in the Company’s Form 10-K for the year ended December 31, 2020 and Forms 10-Q filed on September 30, 2021, October 29, 2021 and December 3, 2021 and those set forth from time to time in the Company’s other periodic filings with the Securities and Exchange Commission, which are available at www.superiorenergy.com. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

Three months ended

Nine months ended

September 30,

June 30,

September 30,

2021

2020

2021

2021(1)

2020

Revenues

$

178,583

$

135,976

$

165,892

$

496,246

$

521,797

Cost of revenues

124,973

87,074

103,579

326,193

318,013

Depreciation, depletion, amortization and accretion

59,208

28,163

59,018

166,614

89,052

General and administrative expenses

33,671

51,440

32,308

95,469

164,957

Restructuring and other expenses

4,712

25,746

7,438

21,803

27,033

Reduction in value of assets

-

2,929

-

-

19,451

Loss from operations

(43,981

)

(59,376

)

(36,451

)

(113,833

)

(96,709

)

Other income

Interest income (expense), net

647

(24,800

)

535

1,596

(74,698

)

Reorganization items, net

-

-

-

335,560

-

Other income (expense)

(6,224

)

(1,399

)

2,570

(8,604

)

(4,810

)

Income (loss) from continuing operations before income taxes

(49,558

)

(85,575

)

(33,346

)

214,719

(176,217

)

Income taxes benefit

9,518

(1,815

)

1,747

(44,453

)

12,345

Net income (loss) from continuing operations

(40,040

)

(87,390

)

(31,599

)

170,266

(163,872

)

Loss from discontinued operations, net of tax

(5,161

)

(69,914

)

(19,400

)

(34,319

)

(138,002

)

Net income (loss)

$

(45,201

)

$

(157,304

)

$

(50,999

)

$

135,947

$

(301,874

)

(1) Combines results from Predecessor periods prior to our emergence from bankruptcy on February 2, 2021 and Successor periods subsequent to emergence which is a non-GAAP financial measure. For further information regarding the breakdown of results, see our Quarterly Report on Form 10-Q for the nine months ended September 30, 2021.

No earnings per share information is presented due to the change in reporting entity as a result of our emergence from bankruptcy in the first quarter of 2021.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

September 30,

December 31,

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$

258,024

$

188,006

Accounts receivable, net

174,065

158,516

Income taxes receivable

-

8,891

Prepaid expenses

26,881

31,793

Inventory and other current assets

78,630

86,198

Investment in equity securities

18,684

-

Assets held for sale

87,922

242,104

Total current assets

644,206

715,508

Property, plant and equipment, net

403,473

408,107

Operating lease right-of-use assets

28,871

33,317

Goodwill

-

138,677

Notes receivable

75,564

72,129

Restricted cash

79,560

80,179

Intangible and other long-term assets, net

24,109

53,162

Total assets

$

1,255,783

$

1,501,079

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$

56,500

$

50,330

Accrued expenses

109,054

114,777

Liabilities held for sale

23,241

46,376

Total current liabilities

188,795

211,483

Decommissioning liabilities

173,132

134,436

Operating lease liabilities

20,608

29,464

Deferred income taxes

32,396

5,288

Other long-term liabilities

70,355

123,261

Liabilities subject to compromise

-

1,335,794

Total liabilities

485,286

1,839,726

Total stockholders’ equity (deficit)

770,497

(338,647

)

Total liabilities and stockholders’ equity (deficit)

$

1,255,783

$

1,501,079


The graph “SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES - ASSETS HELD FOR SALE” is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/35a906b2-4dae-42f2-bc2d-92ff6b1e9dcc

Assets Held For Sale Bridge

June 30, 2021 to September 30, 2021

(in millions)

$170.2

Q2 Assets Held for Sale

($41.4)

Disposition of Complete Energy Services

($15.0)

Pressure Pumping Sales

($14.5)

SPN WS Impairment

($11.4)

Decline in Working Capital

$87.9

Q3 Assets Held for Sale


Assets Held For Sale

Three months ended September 30, 2021

$26.8

Real Estate

$8.5

SPN Well Services Assets

$26.8

Pressure Pumping and Excluded Assets (Machinery and Equip)

$62.1

Total PP&E

$17.9

Current Assets ($11M A/R)

$7.9

Right of Use (Lease Assets) and other

$87.9

Total Assets Held for Sale


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Nine months ended

September 30,

2021(1)

2020

Cash flows from operating activities

Net income (loss)

$

135,947

$

(301,874

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities

Depreciation, depletion, amortization and accretion

200,257

113,313

Reduction in value of assets

26,905

129,042

Reorganization items, net

(354,279

)

-

Other non-cash items

20,727

17,627

Changes in operating assets and liabilities

12,652

60,489

Net cash from operating activities

42,209

18,597

Cash flows from investing activities

Payments for capital expenditures

(28,482

)

(37,408

)

Proceeds from sales of assets

58,781

44,097

Net cash from investing activities

30,299

6,689

Cash flows from financing activities

Other

(3,419

)

(12,340

)

Net cash from financing activities

(3,419

)

(12,340

)

Effect of exchange rate changes on cash

311

(378

)

Net change in cash, cash equivalents and restricted cash

69,400

12,568

Cash, cash equivalents and restricted cash at beginning of period

268,184

275,388

Cash, cash equivalents and restricted cash at end of period

$

337,584

$

287,956

(1) Combines results from Predecessor periods prior to our emergence from bankruptcy on February 2, 2021 and Successor periods subsequent to emergence which is a non-GAAP financial measure. For further information regarding the breakdown of results, see our Quarterly Report on Form 10-Q for the nine months ended September 30, 2021.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

REVENUE BY GEOGRAPHIC REGION BY SEGMENT

(in thousands, except per share data)

(unaudited)

Three months ended

September 30,

June 30,

2021

2020

2021

U.S. land

Rentals

$

25,627

$

-

$

20,789

Well Services

6,638

-

6,781

Drilling Products and Services

-

10,459

-

Production Services

-

383

-

Technical Solutions

-

4,694

-

Total U.S. land

32,265

15,536

27,570

U.S. offshore

Rentals

28,997

-

26,890

Well Services

22,756

-

26,574

Drilling Products and Services

-

26,242

-

Production Services

-

6,630

-

Technical Solutions

-

15,740

-

Total U.S. offshore

51,753

48,612

53,464

International

Rentals

21,593

-

19,558

Well Services

72,972

-

65,300

Drilling Products and Services

-

19,301

-

Production Services

-

39,948

-

Technical Solutions

-

12,579

-

Total International

94,565

71,828

84,858

Total Revenues

$

178,583

$

135,976

$

165,892

(1) Combines results from Predecessor periods prior to our emergence from bankruptcy on February 2, 2021 and Successor periods subsequent to emergence. For further information regarding the breakdown of results, see our Quarterly Report on Form 10-Q for the three months ended March 31, 2021.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

(in thousands)

(unaudited)

Three months ended

September 30,

June 30,

2021

2021

Revenues

Rentals

$

76,217

$

67,237

Well Services

102,366

98,655

Corporate and other

-

-

Total Revenues

$

178,583

$

165,892

Loss from Operations

Rentals

$

(6,046

)

$

(9,232

)

Well Services

(18,229

)

(5,226

)

Corporate and other

(19,706

)

(21,993

)

Total loss from Operations

$

(43,981

)

$

(36,451

)

Adjusted EBITDA

Rentals

$

35,595

$

32,851

Well Services

8,894

9,987

Corporate and other

(13,042

)

(12,833

)

Total loss from Operations

$

31,447

$

30,005

We define EBITDA as income (loss) from continuing operations adjusted for the impact of depreciation, depletion, amortization and accretion, interest and income taxes. Additionally, our definition of Adjusted EBITDA adjusts for the impact of reorganization items and restructuring and other expenses, other income/expense and other adjustments.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED EBITDA

(in thousands)

(unaudited)

Three months ended

September 30,

June 30,

2021

2020

2021

Net income (loss) from continuing operations

$

(40,040

)

$

(87,390

)

$

(31,599

)

Depreciation, depletion, amortization and accretion

59,208

28,163

59,018

Interest (income) expense, net

(647

)

24,800

(535

)

Income taxes

(9,518

)

1,815

(1,747

)

Restructuring and other expenses

4,712

25,746

7,438

Reduction in value of assets

-

2,929

-

Other (income) expense

6,224

1,399

(2,570

)

Other adjustments (1)

11,508

Adjusted EBITDA

$

31,447

$

(2,538

)

$

30,005

We define EBITDA as income (loss) from continuing operations adjusted for the impact of depreciation, depletion, amortization and accretion, interest and income taxes. Additionally, our definition of Adjusted EBITDA adjusts for the impact of reorganization items and restructuring and other expenses, other income/expense and other adjustments.

(1) Other adjustments relate to costs associated with our Transformation Project which are included in cost of revenues in our condensed consolidated statements of operations. These costs primarily relate to shut down costs incurred at certain locations and include severance of personnel and the write-down of inventory.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT

(in thousands)

(unaudited)

Three months ended September 30, 2021

Well

Corporate

Consolidated

Rentals

Services

and Other

Total

Loss from continuing operations

$

(6,046

)

$

(18,229

)

$

(19,706

)

$

(43,981

)

Depreciation, depletion, amortization and accretion

41,641

15,615

1,952

59,208

Restructuring and other expenses

-

-

4,712

4,712

Other adjustments (1)

-

11,508

-

11,508

Adjusted EBITDA

$

35,595

$

8,894

$

(13,042

)

$

31,447

Three months ended June 30, 2021

Well

Corporate

Consolidated

Rentals

Services

and Other

Total

Loss from continuing operations

$

(9,232

)

$

(5,226

)

$

(21,993

)

$

(36,451

)

Depreciation, depletion, amortization and accretion

42,083

15,213

1,722

59,018

Restructuring and other expenses

-

-

7,438

7,438

Adjusted EBITDA

$

32,851

$

9,987

$

(12,833

)

$

30,005

We define EBITDA as income (loss) from continuing operations adjusted for the impact of depreciation, depletion, amortization and accretion, interest and income taxes. Additionally, our definition of Adjusted EBITDA adjusts for the impact of reorganization items and restructuring and other expenses, other income/expense and other adjustments.

(1) Other adjustments relate to costs associated with our Transformation Project which are included in cost of revenues in our condensed consolidated statements of operations. These costs primarily relate to shut down costs incurred at certain locations and include severance of personnel and the write-down of inventory.

FOR FURTHER INFORMATION CONTACT:
Wendell York, VP – IR, Corporate Development & Treasury
1001 Louisiana St., Suite 2900
Houston, TX 77002
Investor Relations, ir@superiorenegy.com, (713) 654-2200


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