Newpark Resources Provides Operations Update; Reiterates 2003 Guidance
James D. Cole, Newpark Resources Chairman and CEO, said: "Ahead of Newpark's upcoming investor presentation and meetings, we thought it appropriate to provide a preliminary indication of our fourth quarter financial results and guidance on the first quarter. At the same time, we have also taken the opportunity to discuss current market conditions and what we see as good indications of improving activity." Newpark plans to report fourth quarter and 2002 results after the close on February 27th, with a conference call to follow at 10:00 AM EST on February 28th. The conference call can be accessed by dialing 712-271-0973 or over the Internet by visiting Newpark's website at www.newpark.com . The timing is consistent with the company's policy to wait for completion of its audit before announcing annual results.
Newpark also announced that it sees improving industry conditions with indications of a pick-up in activity as the year progresses. Newpark's Gulf Coast site preparation business, historically a leading indicator of drilling activity in this region, began to improve late in the fourth quarter and has continued to remain active in 2003. Pricing in this segment has rebounded approximately 50% from the lows in the third quarter of 2002.
The market for mat rentals began improving this past quarter. Rental pricing increased approximately 40% to $0.70 per square foot in the fourth quarter, and current bidding is in the $1.00 per square foot range. Bidding continues to be active, and the tone of the market suggests that improved utilization and pricing could lead to improved operating results during 2003.
Gulf of Mexico
The Gulf of Mexico deepwater and offshore markets have languished following the storms of the third quarter and their after-effects, including damage to rigs and infrastructure, which continued to hamper fourth quarter activity. However, Newpark is seeing increased project activity for several key customers in the Gulf of Mexico. The upturn in activity should be visible in the first quarter, but more significant in the following periods as these and other customers resume drilling operations.
New Regulations Lead to Higher Revenues
Newpark continues to benefit from new environmental regulations implemented on August 19, 2002, as per-rig waste volumes increase. Operations are positioned for further improvement as industry activity recovers in 2003.
Canada
Newpark also is beginning to realize the benefits of recent geographical expansion and acquisitions. The Canadian market, which accounts for about 15% of company revenues, is recovering sharply as can be seen from current drilling activity levels. First quarter results should reflect this strength in the marketplace, with strong revenue growth anticipated.
New Contracts
Late in the fourth quarter, Newpark's European drilling fluids unit won two multi-year contracts with major multinational companies for work offshore and on land in North Africa. The two contracts anticipate a total of 25 wells over the next 15 to 24 months, and are expected to contribute $25 to $30 million in revenues over that period.
About Newpark Resources, Inc.
Newpark Resources is a leading provider of high-performance, environmentally focused services and products to the domestic and international exploration and production industry. Products and services entail integrated drilling fluids systems, mat sales and rentals, along with site preparation services and E&P waste disposal.
For further information contact:
Matthew W. Hardey
Vice President of Finance
Newpark Resources, Inc.
3850 N. Causeway, Suite 1770
Metairie, Louisiana 70002
(504) 838-8222
The foregoing discussion contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended. There are risks and uncertainties
that could cause future events and results to differ materially from those
anticipated by management in the forward-looking statements included in this
press release. For further information regarding these and other factors, risks
and uncertainties affecting Newpark, reference is made to the risk factors set
forth in the Prospectus included in Newpark's Registration Statement on Form S-3
filed on May 8, 2002 (File No. 333-87840), and to the section titled "Forward
Looking Statements" on page 17 of that Prospectus. In particular, as described
on page 9 of that Prospectus, any material decline in the level of oil and gas
exploration and production activity could result in fewer opportunities being
available for the service industry in general and Newpark in particular, and may
adversely affect the demand for our services. In addition, as described on page
13 of that Prospectus, and rescission or relaxation of governmental regulations,
including in the discharge regulations recently implemented, could reduce the
demand for Newpark's services and reduce Newpark's revenues and income. You are
strongly urged to review these sections for a more detailed discussion of these
risks and uncertainties. Newpark's SEC filings can be obtained at no charge at
www.sec.gov , as well as through our Website, www.newpark.com .
SOURCE Newpark Resources, Inc.
CONTACT: Matthew W. Hardey, Vice President of Finance of Newpark
Resources, Inc., +1-504-838-8222
URL: http://www.newpark.com
http://www.prnewswire.com
Copyright (C) 2003 PR Newswire. All rights reserved.