Parker Drilling Announces Charge Related to DoJ, SEC Settlement; Offers Q4 Outlook
Parker Drilling Company (NYSE: PKD), an international drilling contractor, drilling services and rental tools provider, today announced that the Company has reached an agreement in principle with the United States Department of Justice (DOJ) and the staff of the United States Securities and Exchange Commission (SEC) related to parallel investigations that the DOJ and SEC conducted regarding possible violations of U.S. law, including the Foreign Corrupt Practices Act (FCPA), by the Company. Parker Drilling has recorded a charge of $15.85 million, or $0.13 per diluted share, for the fourth quarter of 2012, associated with the proposed settlement of these matters. The charge, which is included in general and administrative expense, is subject to change based on the results of any final settlement with the DOJ and SEC relating to these matters.
"We are pleased with this progress, and we will continue to maintain a vigorous FCPA compliance program, to emphasize the importance of compliance and ethical business conduct, and to enhance our compliance efforts," said Parker Drilling President and Chief Executive Officer, Gary Rich.
The agreement in principle is contingent upon the parties' preparation and agreement on the language of the settlement documents, approval of the SEC's civil settlement by its governing Commission and approval by a United States District Court. There can be no assurance that this proposed settlement will be finalized, or finalized on the terms currently agreed in principle, and we cannot provide assurances regarding if and when the court and/or the SEC's governing Commission will approve the settlement.
2012 Fourth Quarter Outlook
The Company also announced its expectations for its 2012 fourth quarter operating performance and earnings results. Recent trends in the U.S. land and Gulf of Mexico inland waters drilling markets have led to increased competitive conditions for rental tools and slowness in demand for barge drilling rigs. International operations have been impacted by a further reduction in rig utilization. In addition, the fourth quarter's results include costs and other expenses related to actions taken to improve operating performance and position the Company for long-term success. This includes costs associated with dry-docking some barge drilling rigs, repositioning and redeploying some international drilling rigs and responding to the competitive demands in the rentals tools market. Excluding the impact of the settlement with the DOJ and SEC, the Company expects to report a net loss for the 2012 fourth quarter of between $0.03 and $0.05 per diluted share.
"Each of our operations has responded to market conditions in ways that are already beginning to have a favorable impact on their performance. Nevertheless, market conditions of the fourth quarter have had their effect on our immediate results," noted Gary Rich.
The Company will discuss the results of the 2012 fourth quarter in more detail following its upcoming earnings release and related conference call.
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