LONDON, July 30, 2014 /PRNewswire/ -- Noble Corporation plc (NYSE: NE) today reported second quarter 2014 net income of $235 million, or $0.91 per diluted share, compared to $256 million, or $0.99 per diluted share, for the first quarter of 2014. For the second quarter of 2013, net income totaled $177 million, or $0.69 per diluted share. Results for the second quarter of 2013 included $18 million, or $0.06 per diluted share, related to cancellation of a contract awarded to a jackup rig under construction. Revenues for the second quarter of 2014 were $1.2 billion compared to $1.3 billion in the first quarter of 2014 and $1.0 billion in the second quarter of 2013.
David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation plc noted, "Second quarter results benefited from our strategy to shift the fleet toward a greater mix of premium rigs with contributions from two new jackup rigs, the Noble Houston Colbert and Noble Regina Allen. In addition, revenues in the quarter were supported by contractual dayrate increases on several rigs and the commencement of a contract for the Noble Paul Romano, which returned to work in May. However, due to planned regulatory inspection and maintenance shipyard projects for several rigs, revenues for the second quarter declined modestly when compared to first quarter 2014.
"As of the close of the second quarter, Noble has added nine new, technically advanced rigs to its fleet since 2011. Two additional new rigs are expected to commence operations during the third quarter with the arrival of the ultra-deepwater drillship Noble Sam Croft in the U.S. Gulf of Mexico and the high-specification jackup Noble Sam Turner in the North Sea. Operating performance on our new rigs has continued to improve due in part to the implementation of previously announced operational readiness procedures and crew competency measures. We believe these improvements are sustainable and should continue to drive operating performance."
Contract drilling services revenues for the second quarter of 2014 reached $1.2 billion, a slight decline of less than 1 percent from revenues reported during the first quarter of 2014. The slight decrease was the result of increased non-operating days in the quarter as six rigs began planned shipyard projects, substantially offset by favorable contractual pricing increases, most notably on the Noble Bully II, Noble Roger Lewis, Noble Jimmy Puckett and Noble Discoverer, and revenues received from newbuilds beginning their first contracts. Fleet operating days decreased 4 percent during the quarter due to an increase in shipyard days. As a result, fleet utilization decreased to 79 percent as compared to 84 percent during the first quarter of 2014. Offsetting the utilization decrease was an increase in average daily revenues, up 3 percent in the second quarter to $231,000 compared to the previous quarter average of $223,600, reflecting the addition of premium assets and favorable contract prices on existing rigs. Contract drilling operating costs increased marginally in the second quarter to $577 million compared to $561 million in the first quarter of 2014. Higher costs associated with adding newbuild rigs to the fleet were almost entirely offset by a reduction in mobilization and repair and maintenance costs.
Net cash from operating activities was $526 million in the second quarter of 2014 as compared to $506 million for the first quarter of the year. Capital expenditures in the second quarter totaled $699 million, including $510 million related to the Company's fleet expansion program. As of June 30, 2014, approximately $1.1 billion in capital expenditures was required to complete the remaining three projects in the Company's newbuild program, comprised of one ultra-deepwater drillship and two high-specification jackups.
Debt as a percentage of total capitalization at June 30, 2014 was 39 percent, a slight increase from 38 percent at March 31, 2014, while liquidity, defined as cash and cash equivalents plus availability under revolving credit facilities, totaled $772 million compared to $1.03 billion at March 31, 2014. The decrease in liquidity primarily relates to final milestone payments on newbuild rigs, partially offset by cash flows from operating activities.
Operating Highlights
The Company's total contract backlog at June 30, 2014 was an estimated $13.4 billion compared to $14.3 billion at March 31, 2014, reflecting a reduced pace of customer contractual activity during the first half of 2014.
Utilization of the Company's floating rig fleet (semisubmersibles and drillships) decreased to 81 percent in the second quarter of 2014 from 85 percent in the first quarter of 2014. Excluding the impact of two cold stacked rigs, utilization would have been 88 percent in the second quarter of 2014 and 92 percent in the first quarter of 2014. The decline in utilization was a result of the Noble Paul Wolff completing its contract with Petrobras in April coupled with downtime for planned maintenance on the Noble Dave Beard in Brazil and the Noble Amos Runner in the U.S. Gulf of Mexico. The Noble Amos Runner project is expected to extend through the third quarter of 2014. Average daily revenues in the floating rig fleet were $401,200 in the second quarter of 2014, an improvement of approximately 2 percent compared to $393,300 in the first quarter of 2014.
Second quarter 2014 utilization of the Company's jackup rig fleet was 80 percent, a decrease from 86 percent utilization achieved during the first quarter of 2014. The decline in utilization was due to an increase in shipyard days on certain rigs in West Africa and in the North Sea, together with greater idle time due to the completion of contracts for the Noble David Tinsley and the Noble Kenneth Delaney during the quarter. Average daily revenues during the second quarter improved by approximately 5 percent to $130,900 from $125,000 during the first quarter of 2014. The increase in dayrates is primarily the result of favorable contractual repricing, and the impact of dayrates on the newbuild jackups Noble Regina Allen and Noble Houston Colbert.
At the end of the second quarter of 2014, 74 percent of the Company's available rig operating days for both floater and jackup units were committed for the remainder of 2014. For 2015, an estimated 50 percent of the available rig operating days were committed, including 59 percent and 46 percent of the floating and jackup rig days, respectively. The calculations for committed operating days include available days for two floaters and one jackup, all of which are currently cold stacked and also contract backlog associated with the Paragon Offshore rigs.
Outlook
Williams closed by stating, "On August 1, Noble will complete the spin-off of Paragon Offshore, creating a separate and distinct company focused on the operation of standard capability rigs. The transaction represents a critical step in transforming Noble into one of the offshore drilling industry's premier fleets, one possessing the modern features and versatility to address the increasing technical complexity of many of our customers' well programs today and in the future. As for Paragon, we believe it is positioned to excel in the standard specification drilling sector, with well-maintained and efficient rigs, highly-proficient crews, a strong customer base and a talented management team.
"We are delighted to reach this point in our strategic transformation and believe the completion of the spin-off will provide Noble with an improved competitive posture and an enhanced platform for creating shareholder value. We strongly believe our improved fleet mix, improving operations performance, best-in-class shipyard execution, demonstrated contracting expertise and improving free cash flow, place the Company in an advantageous position to address opportunities expected in the next phase of the industry cycle."
About Noble Corporation
Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 77 offshore drilling units (including one ultra-deepwater drillship and two high-specification jackup drilling rigs currently under construction) located worldwide, including in the U.S. Gulf of Mexico and Alaska, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India, Malaysia, Argentina and Australia.
Following the spin-off of Paragon Offshore, Noble will own and operate one of the most modern, versatile and technically advanced fleets in the offshore drilling industry. The 35 rig fleet, consisting of 20 semisubmersibles and drillships and 15 jackups, are focused largely on ultra-deepwater and high-specification jackup drilling opportunities in many of the world's established and emerging regions. Noble's shares are traded on the New York Stock Exchange under the symbol "NE." Noble Corporation plc is a public limited company registered in England and Wales with company number 08354954 and registered office at Devonshire House, 1 Mayfair Place, London, W1J 8AJ England. Additional information on Noble Corporation is available on the Company's Web site at http://www.noblecorp.com.
Forward Looking Disclosure Statement
Statements regarding contract backlog, earnings, costs, revenue, rig demand, fleet condition or performance, shareholder value, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships and requirements, strategic initiatives, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company's most recent Form 10-K, Form 10-Q's and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
Conference Call
Noble has scheduled a conference call and webcast related to its second quarter 2014 results on Thursday, July 31, 2014, at 8:00 a.m. U.S. Central Daylight Time. Interested parties are invited to listen to the call by dialing 1-866-461-7129, or internationally 1-706-679-3084, using access code: 88248309, or by asking for the Noble Corporation conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Web site.
A replay of the conference call will be available on Thursday, July 31, 2014, beginning at 12:00 p.m. U.S. Central Daylight Time, through Friday, August 29, 2014, ending at 11:00 p.m. U.S. Central Daylight Time. The phone number for the conference call replay is 1-855-859-2056 or, for calls from outside of the U.S., 1-404-537-3406, using access code: 88248309. The replay will also be available on the Company's Web site following the end of the live call.
NOBLE CORPORATION PLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2014 2013 2014 2013 ---- ---- ---- ---- Operating revenues Contract drilling services $1,200,406 $975,455 $2,406,710 $1,904,192 Reimbursables 31,811 28,260 68,464 49,434 Labor contract drilling services 8,146 13,603 16,358 34,657 Other - 67 1 77 1,240,363 1,017,385 2,491,533 1,988,360 --------- --------- --------- --------- Operating costs and expenses Contract drilling services 577,134 487,971 1,138,265 968,097 Reimbursables 22,460 22,701 53,066 37,623 Labor contract drilling services 6,261 9,349 12,487 21,598 Depreciation and amortization 254,394 212,589 500,299 418,745 General and administrative 27,080 26,850 52,717 52,419 Non-recurring spin-off related costs 6,458 4,065 18,863 8,027 Gain on contract extinguishment - - - (1,800) 893,787 763,525 1,775,697 1,504,709 ------- ------- --------- --------- Operating income 346,576 253,860 715,836 483,651 Other income (expense) Interest expense, net of amount capitalized (36,351) (24,665) (76,743) (51,966) Interest income and other, net (328) 955 (1,518) 530 Income before income taxes 309,897 230,150 637,575 432,215 Income tax provision (52,435) (36,824) (106,871) (71,176) Net income 257,462 193,326 530,704 361,039 Net income attributable to noncontrolling interests (22,903) (16,706) (39,819) (34,359) Net income attributable to Noble Corporation $234,559 $176,620 $490,885 $326,680 ======== ======== ======== ======== Net income per share Basic $0.91 $0.69 $1.90 $1.28 Diluted $0.91 $0.69 $1.90 $1.27
NOBLE CORPORATION PLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 30, December 31, 2014 2013 ---- ---- ASSETS Current assets Cash and cash equivalents $140,537 $114,458 Accounts receivable 889,942 949,069 Prepaid expenses and other current assets 381,597 327,408 Total current assets 1,412,076 1,390,935 --------- --------- Property and equipment, at cost 20,391,892 19,198,767 Accumulated depreciation (5,118,363) (4,640,677) Property and equipment, net 15,273,529 14,558,090 ---------- ---------- Other assets 304,295 268,932 ------- ------- Total assets $16,989,900 $16,217,957 LIABILITIES AND EQUITY Current liabilities Accounts payable $365,961 $347,214 Accrued payroll and related costs 148,447 151,161 Dividends payable - 128,249 Other current liabilities 386,406 425,291 Total current liabilities 900,814 1,051,915 ------- --------- Long-term debt 6,013,946 5,556,251 Deferred income taxes 233,419 225,455 Other liabilities 338,888 334,308 ------- ------- Total liabilities 7,487,067 7,167,929 Commitments and contingencies Equity Total shareholders' equity 8,777,479 8,322,583 Noncontrolling interests 725,354 727,445 Total equity 9,502,833 9,050,028 Total liabilities and equity $16,989,900 $16,217,957
NOBLE CORPORATION PLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, -------- 2014 2013 ---- ---- Cash flows from operating activities Net income $530,704 $361,039 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 500,299 418,745 Other changes in operating activities 820 (133,719) Net cash from operating activities 1,031,823 646,065 Cash flows from investing activities New construction (836,251) (752,332) Other capital expenditures (352,744) (430,253) Capitalized interest (27,409) (61,726) Other investing activities (11,813) (39,047) Net cash from investing activities (1,228,217) (1,283,358) Cash flows from financing activities Net change in borrowings outstanding on bank credit facilities 707,472 941,653 Dividend payments (193,740) (66,672) Repayment of long-term debt (250,000) (300,000) Other financing activities (41,259) (53,573) Net cash from financing activities 222,473 521,408 Net change in cash and cash equivalents 26,079 (115,885) Cash and cash equivalents, beginning of period 114,458 282,092 ------- ------- Cash and cash equivalents, end of period $140,537 $166,207 ======== ========
NOBLE CORPORATION PLC AND SUBSIDIARIES FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT (In thousands, except operating statistics) (Unaudited) Three Months Ended June 30, Three Months Ended March 31, --------------------------- ---------------------------- 2014 2013 2014 ---- ---- ---- Contract Contract Contract Drilling Drilling Drilling Services Other Total Services Other Total Services Other Total -------- ----- ----- -------- ----- ----- -------- ----- ----- Operating revenues Contract drilling services $1,200,406 $ - $1,200,406 $975,455 $ - $975,455 $1,206,304 $ - $1,206,304 Reimbursables 29,291 2,520 31,811 28,000 260 28,260 36,133 520 36,653 Labor contract drilling services - 8,146 8,146 - 13,603 13,603 - 8,212 8,212 Other - - - 67 - 67 1 - 1 --- --- --- --- --- --- --- --- --- $1,229,697 $10,666 $1,240,363 $1,003,522 $13,863 $1,017,385 $1,242,438 $8,732 $1,251,170 ========== ======= ========== ========== ======= ========== ========== ====== ========== Operating costs and expenses Contract drilling services $577,134 $ - $577,134 $487,971 $ - $487,971 $561,131 $ - $561,131 Reimbursables 21,481 979 22,460 22,469 232 22,701 30,118 488 30,606 Labor contract drilling services - 6,261 6,261 - 9,349 9,349 - 6,226 6,226 Depreciation and amortization 249,701 4,693 254,394 209,082 3,507 212,589 241,574 4,331 245,905 General and administrative 26,845 235 27,080 26,378 472 26,850 25,428 209 25,637 Non-recurring spin-off related costs 1,441 5,017 6,458 - 4,065 4,065 320 12,085 12,405 $876,602 $17,185 $893,787 $745,900 $17,625 $763,525 $858,571 $23,339 $881,910 ======== ======= ======== ======== ======= ======== ======== ======= ======== Operating income $353,095 $(6,519) $346,576 $257,622 $(3,762) $253,860 $383,867 $(14,607) $369,260 ======== ======= ======== ======== ======= ======== ======== ======== ======== Operating statistics Jackups: Average Rig Utilization 80% 92% 86% Operating Days 3,272 3,594 3,413 Average Dayrate $130,851 $116,266 $124,962 Semisubmersibles: Average Rig Utilization 73% 76% 79% Operating Days 924 970 993 Average Dayrate $394,605 $370,117 $392,620 Drillships: Average Rig Utilization 92% 78% 92% Operating Days 1,001 637 990 Average Dayrate $407,259 $311,490 $393,892 FPSO/Submersibles: Average Rig Utilization 0% 0% 0% Operating Days - - - Average Dayrate $ - $ - $ - Total: Average Rig Utilization 79% 83% 84% Operating Days 5,197 5,201 5,396 Average Dayrate $231,003 $187,537 $223,559
NOBLE CORPORATION PLC AND SUBSIDIARIES CALCULATION OF BASIC AND DILUTED NET INCOME PER SHARE (In thousands, except per share amounts) (Unaudited) The following table sets forth the computation of basic and diluted net income per share: Three months ended Six months ended June 30, June 30, -------- -------- 2014 2013 2014 2013 ---- ---- ---- ---- Allocation of net income Basic Net income attributable to Noble Corporation $234,559 $176,620 $490,885 $326,680 Earnings allocated to unvested share- based payment awards (3,776) (2,169) (8,048) (3,822) ------ ------ ------ ------ Net income to common shareholders - basic $230,783 $174,451 $482,837 $322,858 ======== ======== ======== ======== Diluted Net income attributable to Noble Corporation $234,559 $176,620 $490,885 $326,680 Earnings allocated to unvested share- based payment awards (3,774) (2,167) (8,046) (3,819) ------ ------ ------ ------ Net income to common shareholders - diluted $230,785 $174,453 $482,839 $322,861 ======== ======== ======== ======== Weighted average number of shares outstanding -basic 254,238 253,295 254,090 253,184 Incremental shares issuable from assumed exercise of stock options 97 261 116 265 Weighted average number of shares outstanding -diluted 254,335 253,556 254,206 253,449 ======= ======= ======= ======= Weighted average unvested share-based payment awards 4,156 3,150 4,172 2,998 ===== ===== ===== ===== Earnings per share Basic $0.91 $0.69 $1.90 $1.28 Diluted $0.91 $0.69 $1.90 $1.27
SOURCE Noble Corporation