Parker Drilling Co. (NYSE:PKD) Q3 2019 Earnings Conference Call Transcript

Nov 06, 2019 • 11:00 am ET

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Parker Drilling Co. (NYSE:PKD) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings. Welcome to the Parker Drilling Third Quarter 2019 Earnings Call. [Operator Instructions].

It is now my pleasure to introduce your host, Nick Henley, Director of IR. Thank you. You may begin.

Executive
Nick Henley

Good morning, and thank you for joining today's conference call. With me today are Gary Rich, President and CEO of Parker Drilling and Mike Sumruld, Senior Vice President and Chief Financial Officer.

As a reminder, during this conference call, management may make statements regarding future expectations about the company's business, management's plans for future operations or similar matters. These statements are considered forward-looking statements within the meaning of the U.S. Securities Laws and speak only as of the date of this call.

The company's actual results could differ materially due to several important factors, including those described in the company's filings with the SEC. During this call, management will refer to non-GAAP financial measures. In accordance with Regulation G, the company has provided a reconciliation of these measures in the earnings release.

With that, I will now turn the call over to Gary Rich.

Executive
Gary G. Rich

Thank you, Nick, and good morning, everyone. Before I begin, I'd like to highlight the appointment of our Investor Relations Director, Nick Henley to his new position as General Manager of our Canada Operations. Nick was instrumental in helping lead us through partners restructuring and is now moving north to lead our Canadian team, who have been successfully operating the Hibernia platform and preparing for the start of the Husky Energy O&M project. We thank Nick for his service and have absolute confidence that he will continue to succeed as he moves on to this new opportunity. Until we identify a replacement, the company's Investor Relations duties will be shared amongst current team members in order to facilitate a smooth transition.

Turning now to the business. Despite continued market weakness in the U.S., we posted strong gains in three of our four segments in the third quarter. We also executed several notable contract awards since the end of the second quarter, which I will expand upon later in the call.

Our efforts to reactivate owned rigs and our strategy of emphasizing more asset-light and capital-efficient projects has enabled Parker to continue its march to becoming a more return on capital focused company. In addition, we have taken further steps to strengthen our balance sheet. In September, we utilized our strong cash position to voluntarily pay down $35 million of debt in order to delever our balance sheet and put some of our excess capital to work, while providing significant interest savings going forward. Subsequent to the debt reduction, we also amended and extended our ABL, which Mike will discuss in greater detail later in the call. Both of these actions serve to strengthen our financial position and improve returns.

As we look at the overall market fundamentals today, there continues to be a high level of uncertainty and volatility, particularly regarding the North America land market. With capital discipline and spending restraint weighing on E&P