Grey Wolf, Inc. Announces Operating Results for the Quarter Ended March 31, 2001

Apr 26, 2001, 01:00 ET from Grey Wolf, Inc.

    HOUSTON, April 26 /PRNewswire/ -- Grey Wolf, Inc. (Amex:   GW) ("Grey Wolf"
 or the "Company"), reported net income of $13.4 million, or $0.07 per share on
 a diluted basis, for the three months ended March 31, 2001, compared to a net
 loss of $5.7 million, or $0.03 per share on a diluted basis, for the first
 quarter of 2000.  Revenues for the first quarter of 2001 were $97.6 million
 compared to revenues of $58.7 million for the same period a year ago.
 Revenues and net income for the fourth quarter of 2000 were $82.3 million and
 $5.0 million ($0.03 per share on a diluted basis), respectively.
     The Company's operating margin for the first quarter of 2001 was
 $4,979 per day, up $1,694 per day or 52% from the fourth quarter 2000
 operating margin of $3,285 per day.  During the first three months of 2001,
 the Company's rig fleet operated a total of 7,958 days or an average of
 88 rigs working compared to a total of 7,665 days or an average of 83 rigs
 working during the fourth quarter of 2000.
     Tom Richards, Chairman, President and Chief Executive Officer said, "We
 are very pleased with the quarter over quarter improvement in our results.
 The 52% increase in operating margin and 169% increase in net income reflect
 the significant operating leverage available with our existing fleet of
 premium equipment with a distinct deep drilling bias.  We continue to add
 capacity to the market when it fits our financial objectives and we continue
 to emphasize our strategy of increasing revenue at the well site through our
 turnkey and trucking services as well as the use of top drives."
     Mr. Richards continued, "Term contracts are playing a significant role in
 meeting our financial objectives.  This week we signed a one-year commitment
 with ExxonMobil to add a 3,000 horsepower rig to their drilling program in
 southwestern Wyoming.  The contract is expected to generate revenue of
 approximately $6.7 million over the term.  This rig, which will be deployed in
 the Rocky Mountain region early in the fourth quarter, complements the solid
 operating base that will be established with the movement of our ultra-deep
 drilling rig 558 into the region during the second quarter of 2001."
     Grey Wolf has a total of 21 signed term contracts which range in length
 from six months to two years.  Eight rigs are currently working under term
 contracts.  The Company will begin 2002 with 15 rigs working under term
 agreements.  Of these fifteen contracts, eight are for rigs being upgraded out
 of inventory during the remainder of 2001 and the other seven are currently
 marketed rigs.  Inventory as well as currently marketed rigs are offered under
 term contract to our customers at dayrates whereby the Company recovers the
 incremental capital expenditures during the term of the contract and earns an
 acceptable rate of return on capital employed.  The Company believes the use
 of term contracts is an effective way to add capacity to the market and
 mitigate financial risk.
     The Company is currently marketing 91 rigs.  Work is underway to
 reactivate four additional rigs to be deployed in the second quarter of 2001.
 Work will begin soon on another four rigs to be reactivated by late third or
 early fourth quarter 2001, bringing the total marketed fleet to 99 by year
 end.  Capital expenditures for the first quarter of 2001 were $20.5 million.
 In addition to normal maintenance expenditures, this includes $8.4 million for
 rig upgrades and reactivation, $3.6 million for pipe and collars and
 $4.8 million for the purchase of four top drives.  Capital expenditures for
 all of 2001 are projected to be between $80.0 million and $90.0 million,
 including $50.0 million to $55.0 million for the upgrade and reactivation of
 drilling rigs from inventory.  The Company currently anticipates that two
 additional rigs could be reactivated during 2001.
     Earnings before interest, taxes, depreciation and amortization ("EBITDA")
 for the first quarter of 2001 were up $14.3 million to $37.2 million from
 EBITDA of $22.9 million for the fourth quarter of 2000.  First quarter 2001
 EBITDA was $30.4 million greater than the $6.8 million in EBITDA reported for
 the first quarter of 2000.
     The Company's cash balance at March 31, 2001 was $49.6 million.  As of
 today, the Company's cash balance is approximately $54.3 million.  At
 March 31, 2001, the Company had total long-term indebtedness of $250.2 million
 with no borrowings outstanding under the Company's $50.0 million line of
 credit.
     Current leading edge daywork bid rates are between $13,500 and $17,000 per
 day without fuel or top drives and the Company has signed contracts as high as
 $18,500 per day.  These rates will begin to be realized in financial results
 in the fourth quarter of this year.
     Based on current levels of activity and dayrates, the Company expects to
 generate a margin of approximately $5,700 per day for the second quarter of
 2001.  This margin level should generate EBITDA of approximately $43.6 million
 and the resultant net income per share is expected to be approximately
 $0.09 on a diluted basis, assuming an effective tax rate of between 39% and
 42%.  The Company expects depreciation expense of approximately $10.0 million
 in the second quarter of 2001.
     Grey Wolf has scheduled a conference call today at 9:00 a.m. (CDT) to
 discuss first quarter results.  The call will be webcast live on the internet
 through the Investor Relations page on our website at:
 
                           http://www.gwdrilling.com
 
     To participate by telephone, call (800) 937-4589 ten to fifteen minutes
 prior to the starting time.  The reservation number is 18439689.  A replay of
 the conference call will be available by telephone from 11:00 a.m. CDT on
 April 26, 2001 until 11:00 a.m. CDT on April 30, 2001, and on our website
 through May 10, 2001.  The telephone number for the replay of the call is
 (800) 633-8284 and the access code is 18439689.
     This press release contains forward-looking statements within the meaning
 of the Securities Act of 1933 and the Securities Exchange Act of 1934.  The
 specific forward-looking statements cover our expectations and projections
 regarding increasing demand, second quarter 2001 utilization and financial
 results, reactivation and crewing of inventory rigs, attainment of increasing
 margins, depreciation and capital expenditures in 2001.  These forward-looking
 statements are subject to a number of important factors, many of which are
 beyond our control, that could cause actual results to differ materially,
 including oil and gas prices and trends in those prices, the pricing and other
 competitive policies of our competitors, uninsured or under-insured casualty
 losses, unexpected costs under turnkey drilling contracts, weather conditions,
 and the overall level of drilling activity in our market areas.  Please refer
 to our Annual Report on Form 10-K for the year ended December 31, 2000, for
 additional information concerning risk factors that could cause actual results
 to differ materially from these forward-looking statements.
     Grey Wolf, Inc., headquartered in Houston, Texas, is a leading provider of
 contract oil and gas land drilling services in the Ark-La-Tex, Gulf Coast,
 Mississippi/Alabama, South Texas and Rocky Mountain regions with a total
 domestic drilling rig fleet of 120.
 
 
                                                   Three Months Ended March 31,
                                                       2001            2000
                                                      (In thousands, except
                                                        per share amounts)
                                                            (unaudited)
 
     Revenues                                         $97,632        $58,709
     Costs and expenses:
       Drilling operations                             58,008         50,035
       Depreciation and amortization                    9,709          8,889
       Provision for doubtful accounts                    ---             44
       General and administrative                       2,381          1,810
       Total costs and expenses                        70,098         60,778
     Operating income (loss)                           27,534         (2,069)
     Other income (expense):
       Gain on sale of assets                              57             94
       Interest income                                    678            184
       Interest expense                                (5,997)        (5,975)
       Other                                               (2)           (22)
       Other income (expense), net                     (5,264)        (5,719)
     Income (loss) before income taxes                 22,270         (7,788)
     Income tax expense (benefit):
       Current                                            383            ---
       Deferred                                         8,525         (2,096)
       Total income tax expense (benefit)               8,908         (2,096)
     Net income (loss) applicable to common shares    $13,362        $(5,692)
 
     Basic and diluted net income (loss)
      per common share                                  $0.07         $(0.03)
 
     Weighted average common shares outstanding:
       Basic                                          180,085        165,253
       Diluted                                        182,792        165,253
 
     Operating data for the periods:
       Total operating days                             7,958          5,530
       Total revenue per day                          $12,268        $10,616
       Total operating margin per day                   4,979          1,569
 
       Daywork operating days                           7,303          4,341
       Daywork revenue per day                        $11,297         $7,363
       Daywork operating margin per day                 4,873          1,044
 
       Turnkey operating days                             655          1,189
       Turnkey revenue per day                        $23,104        $22,495
       Turnkey operating margin per day                 6,157          3,482
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X74637448
 
 

SOURCE Grey Wolf, Inc.
    HOUSTON, April 26 /PRNewswire/ -- Grey Wolf, Inc. (Amex:   GW) ("Grey Wolf"
 or the "Company"), reported net income of $13.4 million, or $0.07 per share on
 a diluted basis, for the three months ended March 31, 2001, compared to a net
 loss of $5.7 million, or $0.03 per share on a diluted basis, for the first
 quarter of 2000.  Revenues for the first quarter of 2001 were $97.6 million
 compared to revenues of $58.7 million for the same period a year ago.
 Revenues and net income for the fourth quarter of 2000 were $82.3 million and
 $5.0 million ($0.03 per share on a diluted basis), respectively.
     The Company's operating margin for the first quarter of 2001 was
 $4,979 per day, up $1,694 per day or 52% from the fourth quarter 2000
 operating margin of $3,285 per day.  During the first three months of 2001,
 the Company's rig fleet operated a total of 7,958 days or an average of
 88 rigs working compared to a total of 7,665 days or an average of 83 rigs
 working during the fourth quarter of 2000.
     Tom Richards, Chairman, President and Chief Executive Officer said, "We
 are very pleased with the quarter over quarter improvement in our results.
 The 52% increase in operating margin and 169% increase in net income reflect
 the significant operating leverage available with our existing fleet of
 premium equipment with a distinct deep drilling bias.  We continue to add
 capacity to the market when it fits our financial objectives and we continue
 to emphasize our strategy of increasing revenue at the well site through our
 turnkey and trucking services as well as the use of top drives."
     Mr. Richards continued, "Term contracts are playing a significant role in
 meeting our financial objectives.  This week we signed a one-year commitment
 with ExxonMobil to add a 3,000 horsepower rig to their drilling program in
 southwestern Wyoming.  The contract is expected to generate revenue of
 approximately $6.7 million over the term.  This rig, which will be deployed in
 the Rocky Mountain region early in the fourth quarter, complements the solid
 operating base that will be established with the movement of our ultra-deep
 drilling rig 558 into the region during the second quarter of 2001."
     Grey Wolf has a total of 21 signed term contracts which range in length
 from six months to two years.  Eight rigs are currently working under term
 contracts.  The Company will begin 2002 with 15 rigs working under term
 agreements.  Of these fifteen contracts, eight are for rigs being upgraded out
 of inventory during the remainder of 2001 and the other seven are currently
 marketed rigs.  Inventory as well as currently marketed rigs are offered under
 term contract to our customers at dayrates whereby the Company recovers the
 incremental capital expenditures during the term of the contract and earns an
 acceptable rate of return on capital employed.  The Company believes the use
 of term contracts is an effective way to add capacity to the market and
 mitigate financial risk.
     The Company is currently marketing 91 rigs.  Work is underway to
 reactivate four additional rigs to be deployed in the second quarter of 2001.
 Work will begin soon on another four rigs to be reactivated by late third or
 early fourth quarter 2001, bringing the total marketed fleet to 99 by year
 end.  Capital expenditures for the first quarter of 2001 were $20.5 million.
 In addition to normal maintenance expenditures, this includes $8.4 million for
 rig upgrades and reactivation, $3.6 million for pipe and collars and
 $4.8 million for the purchase of four top drives.  Capital expenditures for
 all of 2001 are projected to be between $80.0 million and $90.0 million,
 including $50.0 million to $55.0 million for the upgrade and reactivation of
 drilling rigs from inventory.  The Company currently anticipates that two
 additional rigs could be reactivated during 2001.
     Earnings before interest, taxes, depreciation and amortization ("EBITDA")
 for the first quarter of 2001 were up $14.3 million to $37.2 million from
 EBITDA of $22.9 million for the fourth quarter of 2000.  First quarter 2001
 EBITDA was $30.4 million greater than the $6.8 million in EBITDA reported for
 the first quarter of 2000.
     The Company's cash balance at March 31, 2001 was $49.6 million.  As of
 today, the Company's cash balance is approximately $54.3 million.  At
 March 31, 2001, the Company had total long-term indebtedness of $250.2 million
 with no borrowings outstanding under the Company's $50.0 million line of
 credit.
     Current leading edge daywork bid rates are between $13,500 and $17,000 per
 day without fuel or top drives and the Company has signed contracts as high as
 $18,500 per day.  These rates will begin to be realized in financial results
 in the fourth quarter of this year.
     Based on current levels of activity and dayrates, the Company expects to
 generate a margin of approximately $5,700 per day for the second quarter of
 2001.  This margin level should generate EBITDA of approximately $43.6 million
 and the resultant net income per share is expected to be approximately
 $0.09 on a diluted basis, assuming an effective tax rate of between 39% and
 42%.  The Company expects depreciation expense of approximately $10.0 million
 in the second quarter of 2001.
     Grey Wolf has scheduled a conference call today at 9:00 a.m. (CDT) to
 discuss first quarter results.  The call will be webcast live on the internet
 through the Investor Relations page on our website at:
 
                           http://www.gwdrilling.com
 
     To participate by telephone, call (800) 937-4589 ten to fifteen minutes
 prior to the starting time.  The reservation number is 18439689.  A replay of
 the conference call will be available by telephone from 11:00 a.m. CDT on
 April 26, 2001 until 11:00 a.m. CDT on April 30, 2001, and on our website
 through May 10, 2001.  The telephone number for the replay of the call is
 (800) 633-8284 and the access code is 18439689.
     This press release contains forward-looking statements within the meaning
 of the Securities Act of 1933 and the Securities Exchange Act of 1934.  The
 specific forward-looking statements cover our expectations and projections
 regarding increasing demand, second quarter 2001 utilization and financial
 results, reactivation and crewing of inventory rigs, attainment of increasing
 margins, depreciation and capital expenditures in 2001.  These forward-looking
 statements are subject to a number of important factors, many of which are
 beyond our control, that could cause actual results to differ materially,
 including oil and gas prices and trends in those prices, the pricing and other
 competitive policies of our competitors, uninsured or under-insured casualty
 losses, unexpected costs under turnkey drilling contracts, weather conditions,
 and the overall level of drilling activity in our market areas.  Please refer
 to our Annual Report on Form 10-K for the year ended December 31, 2000, for
 additional information concerning risk factors that could cause actual results
 to differ materially from these forward-looking statements.
     Grey Wolf, Inc., headquartered in Houston, Texas, is a leading provider of
 contract oil and gas land drilling services in the Ark-La-Tex, Gulf Coast,
 Mississippi/Alabama, South Texas and Rocky Mountain regions with a total
 domestic drilling rig fleet of 120.
 
 
                                                   Three Months Ended March 31,
                                                       2001            2000
                                                      (In thousands, except
                                                        per share amounts)
                                                            (unaudited)
 
     Revenues                                         $97,632        $58,709
     Costs and expenses:
       Drilling operations                             58,008         50,035
       Depreciation and amortization                    9,709          8,889
       Provision for doubtful accounts                    ---             44
       General and administrative                       2,381          1,810
       Total costs and expenses                        70,098         60,778
     Operating income (loss)                           27,534         (2,069)
     Other income (expense):
       Gain on sale of assets                              57             94
       Interest income                                    678            184
       Interest expense                                (5,997)        (5,975)
       Other                                               (2)           (22)
       Other income (expense), net                     (5,264)        (5,719)
     Income (loss) before income taxes                 22,270         (7,788)
     Income tax expense (benefit):
       Current                                            383            ---
       Deferred                                         8,525         (2,096)
       Total income tax expense (benefit)               8,908         (2,096)
     Net income (loss) applicable to common shares    $13,362        $(5,692)
 
     Basic and diluted net income (loss)
      per common share                                  $0.07         $(0.03)
 
     Weighted average common shares outstanding:
       Basic                                          180,085        165,253
       Diluted                                        182,792        165,253
 
     Operating data for the periods:
       Total operating days                             7,958          5,530
       Total revenue per day                          $12,268        $10,616
       Total operating margin per day                   4,979          1,569
 
       Daywork operating days                           7,303          4,341
       Daywork revenue per day                        $11,297         $7,363
       Daywork operating margin per day                 4,873          1,044
 
       Turnkey operating days                             655          1,189
       Turnkey revenue per day                        $23,104        $22,495
       Turnkey operating margin per day                 6,157          3,482
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X74637448
 
 SOURCE  Grey Wolf, Inc.