Subsea well operation and construction specialist, Cal Dive International Inc., said Wednesday that four tropical weather systems have “significantly” reduced expected utilization of the company’s fleet of marine construction vessels in the last six weeks of the third quarter. As a result, Cal Dive said it now estimates third quarter earnings per share in a range of 8 to 11 cents in contrast to First Call consensus estimates of 23 cents.

In addition, the Houston-based company also announced that fourth quarter earnings could vary between 22 and 29 cents depending upon the impact of Hurricane Lili on October results.

“Customers are typically required to pay weather charges if marine contracting activities are interrupted by named tropical storms,” said S. James Nelson, Jr., vice chairman of Cal Dive. “In the soft subsea construction market which presently exists in the Gulf of Mexico, our customers will not mobilize projects when there is the threat of tropical weather. Isidore, following on the heels of tropical storms Hanna, Edouard and Bertha, not only restricted utilization of CDI vessels working in the Gulf, but also interrupted operations of three DP vessels working offshore Trinidad and even shut down the Uncle John in the Bay of Campeche. Evacuation of 20 ERT platforms and the shut-in of oil and gas production from the 26 fields which we operate alone had the effect of reducing third quarter earnings by an estimated four to five cents.”

The announcement follows BP plc’s claim that Tropical Storm Isidore blew a hole into its production forecast for 2002. The company, which will still have to tally Lili’s consequences, blamed the September storm for a 1% drop in its predicted year-end production growth of 4% compared to a year ago (see related story).

“The wide range of fourth quarter guidance reflects uncertainty as to what Hurricane Lili will bring,” said Nelson. “The low end of the range assumes an Isidore-type storm; i.e. lower vessel utilization and ERT production shut-in for a week. Should the hurricane cause damage to offshore facilities, the associated repair work would move earnings to the higher end of guidance. We will provide a fourth quarter update and have a much better fix on the impact of Hurricane Lili during our Q3 investor conference call on November 1. Longer term, the business fundamentals for Cal Dive are unaffected, with future expectations remaining unchanged.”

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