FILED BY ENSCO INTERNATIONAL INCORPORATED
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
SUBJECT COMPANY: CHILES OFFSHORE INC.
SUBJECT COMPANY COMMISSION FILE NO.: 001-16005
[ENSCO LOGO]
NEWS RELEASE
ENSCO INTERNATIONAL INCORPORATED
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2700 FOUNTAIN PLACE O 1445 ROSS AVENUE O DALLAS, TEXAS 75202-2792
TEL: (214) 922-1500 O FAX: (214) 855-0080 O WEB SITE: WWW.ENSCOUS.COM
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ENSCO REPORTS SECOND QUARTER RESULTS
Dallas, Texas, July 18, 2002....ENSCO International Incorporated (NYSE:
ESV) reported net income of $23.3 million ($.17 per diluted share) on revenues
of $157.2 million for the three months ended June 30, 2002, compared to net
income of $61.2 million ($.44 per diluted share) on revenues of $215.5 million
for the year earlier quarter.
ENSCO's net income for the first six months of 2002 was $39.5 million,
or $.29 per diluted share, on revenues of $299.5 million, compared to net income
of $108.1 million, or $.77 per diluted share, on revenues of $410.8 million for
the prior six month period. Included in the results for the six months ended
June 30, 2002 is a $5.8 million gain ($3.8 million after tax or $.03 per diluted
share) in connection with an insurance claim relating to the ENSCO 51 jackup
rig, which sustained extensive damage from a natural gas well fire in March of
2001.
The average day rate for ENSCO's jackup rig fleet was $42,100 for the
second quarter of 2002, compared to $52,600 in the year earlier period.
Utilization for the Company's jackup fleet was 87% in the most recent quarter,
versus 91% in the second quarter of 2001. Excluding rigs in a shipyard for
regulatory inspection and enhancement, jackup utilization was 94% in the most
recent quarter, compared to 98% in the year earlier period.
In ENSCO's marine transportation segment, the average day rate for the
Company's marine fleet was $5,900 in the second quarter of 2002, compared to
$8,300 in the year earlier period. Utilization for the marine fleet was 73% in
the quarter ended June 30, 2002, versus 84% in the second quarter of 2001.
Carl Thorne, Chairman and Chief Executive Officer of ENSCO, commented
on the Company's recent results and outlook, "Second quarter results were
somewhat better than anticipated due primarily to the rescheduling of various
shipyard activity and the resulting additional revenue days in the quarter, and
the pace of day rate improvement in the Gulf of Mexico being slightly in excess
of that anticipated.
"We continue to make progress relative to increasing the capability and
earnings potential of our rig and vessel fleets through enhancement,
redeployment, and additions. With regard to asset enhancement, six of our jackup
rigs were in a shipyard for planned regulatory and upgrade work during the most
recent quarter. We also anticipate having as many as six of our rigs in a
shipyard during the third quarter.
"In connection with asset redeployment, we have a term contract work
commitment with Shell in Nigeria for one of our North Sea harsh environment
jackups (ENSCO 100) commencing this September. We have also received a term
contract commitment from TotalFinaElf requiring the relocation of one of our
Venezuelan barge rigs (ENSCO I) to Indonesia for work expected to commence by
the end of this year.
"The proposed acquisition of Chiles Offshore Inc., which we announced
in May, is proceeding as planned. The Chiles shareholder meeting to vote on the
transaction is scheduled for August 7, 2002. Chiles owns and operates the newest
jackup fleet in the industry, with four ultra premium jackup rigs in service,
all having been built since 1999, and a fifth unit in the final stages of
construction. We look forward to the positive contribution we expect Chiles will
make to ENSCO.
"As reported previously, we also continue to add to the high end of our
jackup fleet through new rig construction. The ENSCO 102, a newly built harsh
environment jackup rig in which we own a 25% interest with an option to purchase
the remaining 75%, is undergoing final outfitting and commissioning in
Singapore. We are in discussions with several operators relative to work
prospects in the region.
"With regard to our markets, we continue to see strong demand for
premium jackup rigs in the Gulf of Mexico, and a continuing positive trend in
day rates. Internationally, the Asia Pacific region remains strong, and we have
a favorable contract backlog. These positive trends have been mitigated somewhat
by near term rate softness in the North Sea.
"We continue to expect improvement in our results over the remaining
six months of this year, as rigs return to service upon completion of shipyard
work, and as results reflect the anticipated addition of the Chiles fleet
mid-third quarter. Third quarter 2002 earnings per share are expected to be in
the range of $.18 to $.23, including a contribution of approximately $.02 per
share from the Chiles rigs."
Statements contained in this news release that state the Company's or
management's intentions, hopes, beliefs, expectations, anticipations,
projections, or predictions of the future are forward-looking statements. Such
forward-looking statements include references to anticipated shipyard downtime
and related financial impact, future markets and contract backlog for the
Company's drilling rigs and vessels, anticipated acquisition of Chiles Offshore
Inc., and projections of third quarter earnings. It is important to note that
the Company's actual results could differ materially from those projected in
such forward-looking statements. The factors that could cause actual results to
differ materially from those in the forward-looking statements include the
following: (i) industry conditions and competition, (ii) cyclical nature of the
industry, (iii) worldwide expenditures for oil and gas drilling, (iv)
operational risks and insurance, (v) risks associated with operating in foreign
jurisdictions, (vi) environmental liabilities which may arise in the future
which are not covered by insurance or indemnity, (vii) the impact of current and
future laws and government regulation, as well as repeal or modification of
same, affecting the oil and gas industry and the Company's operations in
particular, (viii) changes in the dates the Company's rigs being constructed or
undergoing enhancement or repair will enter service (including changes resulting
from an unanticipated increase in the scope of work), (ix) renegotiation,
nullification, or breach of contracts with customers or other parties, (x) the
results of the Chiles Offshore Inc.
shareholder vote, and (xi) the risks described from time to time in the
Company's SEC filings. Copies of such filings may be obtained by contacting the
Company or the SEC.
The Company disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements to reflect any change in
the Company's expectations or any change in events, conditions or circumstances
on which any such statements are based.
ENSCO, headquartered in Dallas, Texas, provides contract drilling and
marine transportation services to the international petroleum industry.
Contact: Richard LeBlanc
214-922-1550
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE OR AN
OFFER OR AN INVITATION TO PURCHASE ANY SECURITIES. INVESTORS SHOULD CAREFULLY
REVIEW ENSCO INTERNATIONAL INCORPORATED'S REGISTRATION STATEMENT AND PROSPECTUS
AND THE RELATED CHILES OFFSHORE INC. DEFINITIVE PROXY STATEMENT WITH RESPECT TO
THE PROPOSED TRANSACTION FILED WITH THE SEC ON JULY 5, 2002 BEFORE MAKING ANY
DECISION CONCERNING THE PROPOSED OFFER. THESE DOCUMENTS CONTAIN IMPORTANT
INFORMATION. THESE DOCUMENTS AND OTHER RELEVANT DOCUMENTS MAY BE OBTAINED FOR
FREE AT THE SEC'S WEB SITE HTTP://WWW.SEC.GOV, AND AT ENSCO INTERNATIONAL
INCORPORATED'S WEB SITE, HTTP://WWW.ENSCOUS.COM. INVESTORS SHOULD READ THE PROXY
STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING THE
TRANSACTION.
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ENSCO will conduct a conference call at 10:00 a.m. Central Time on
Thursday, July 18, 2002, to discuss its second quarter results. The call will be
broadcast live over the Internet at www.enscous.com. Interested parties may also
listen to the call by dialing 952-556-2808. It is recommended that participants
call five to ten minutes before the scheduled start time.
A replay of the conference call will be available on ENSCO's web site
www.enscous.com, or by phone for 24 hours after the call by dialing 703-326-3020
(access number 6079727).
ENSCO INTERNATIONAL INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- --------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
OPERATING REVENUES $ 157.2 $ 215.5 $ 299.5 $ 410.8
EXPENSES
Operating expenses 84.3 89.7 172.6 179.3
Depreciation and amortization 29.4 29.1 57.9 58.0
General and administrative 4.6 4.2 9.0 7.9
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118.3 123.0 239.5 245.2
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OPERATING INCOME 38.9 92.5 60.0 165.6
OTHER INCOME (EXPENSE)
Interest income 1.6 2.3 3.1 4.6
Interest expense, net (8.1) (8.5) (15.9) (16.8)
Other, net -- -- 8.2 0.2
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(6.5) (6.2) (4.6) (12.0)
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INCOME BEFORE INCOME TAXES 32.4 86.3 55.4 153.6
PROVISION FOR INCOME TAXES 9.1 25.1 15.9 45.5
----------- ----------- ----------- -----------
NET INCOME $ 23.3 $ 61.2 $ 39.5 $ 108.1
=========== =========== =========== ===========
EARNINGS PER SHARE
Basic $ 0.17 $ 0.44 $ 0.29 $ 0.78
Diluted $ 0.17 $ 0.44 $ 0.29 $ 0.77
AVERAGE COMMON SHARES OUTSTANDING
Basic 135.3 138.5 135.0 138.4
Diluted 136.2 139.7 135.8 139.7
ENSCO INTERNATIONAL INCORPORATED
CONSOLIDATED BALANCE SHEET
(IN MILLIONS)
JUNE 30, DECEMBER 31,
2002 2001
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ASSETS
CURRENT ASSETS
Cash and short-term investments $ 337.2 $ 310.4
Accounts receivable, net 116.5 116.5
Prepaid expenses and other 36.2 34.4
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Total current assets 489.9 461.3
PROPERTY AND EQUIPMENT, NET 1,699.8 1,715.3
OTHER ASSETS 171.9 147.2
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$ 2,361.6 $ 2,323.8
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 115.8 $ 136.6
Current maturities of long-term debt 12.7 12.7
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Total current liabilities 128.5 149.3
LONG-TERM DEBT 456.2 462.4
DEFERRED INCOME TAXES 270.4 259.1
OTHER LIABILITIES 14.7 12.8
STOCKHOLDERS' EQUITY 1,491.8 1,440.2
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$ 2,361.6 $ 2,323.8
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ENSCO INTERNATIONAL INCORPORATED
OPERATING STATISTICS
SECOND QUARTER FIRST
------------------------------ QUARTER
2002 2001 2002
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CONTRACT DRILLING
Average day rates
Jackup rigs
North America $ 22,864 $ 53,061 $ 21,481
Europe 79,406 65,348 76,961
Asia Pacific 56,802 39,170 58,335
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Total jackup rigs 42,061 52,611 41,522
Semisubmersible rig - N. America 182,305 179,911 183,532
Barge rigs - South America 39,792 44,286 42,706
Platform rigs - North America 24,608 26,673 25,460
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Total $ 44,844 $ 52,507 $ 43,712
============= ============= =============
Utilization
Jackup rigs
North America 95% 90% 86%
Europe 78% 87% 69%
Asia Pacific 80% 100% 82%
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Total jackup rigs 87% 91% 82%
Semisubmersible rig - N. America 97% 98% 69%
Barge rigs - South America 16% 33% 16%
Platform rigs - North America 60% 57% 48%
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Total 75% 77% 69%
============= ============= =============
MARINE TRANSPORTATION
Average day rates
AHTS $ 11,017 $ 12,369 $ 11,668
Supply 5,142 7,608 5,830
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Total $ 5,933 $ 8,291 $ 7,056
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Utilization
AHTS 55% 67% 82%
Supply 77% 87% 67%
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Total 73% 84% 70%
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ENSCO INTERNATIONAL INCORPORATED
SEGMENT RESULTS
(IN MILLIONS)
SECOND QUARTER FIRST
----------------------------- QUARTER
2002 2001 2002
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OPERATING REVENUES
Contract drilling $ 146.1 $ 197.8 $ 130.0
Marine transportation 11.1 17.7 12.3
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Total segment revenues 157.2 215.5 142.3
OPERATING EXPENSES*
Contract drilling 74.1 80.1 78.8
Marine transportation 10.2 9.6 9.5
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Total segment expenses 84.3 89.7 88.3
OPERATING MARGINS*
Contract drilling 72.0 117.7 51.2
Marine transportation 0.9 8.1 2.8
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Total segment margins $ 72.9 $ 125.8 $ 54.0
* Exclusive of depreciation and amortization and general and administrative
expenses.