Noble Corporation plc Reports First Quarter 2014 Results

NEW RIG ADDITIONS DRIVE IMPROVED MARGINS

Apr 16, 2014, 17:00 ET from Noble Corporation

LONDON, April 16, 2014 /PRNewswire/ -- Noble Corporation plc (NYSE: NE) today reported first quarter 2014 net income of $256 million, or $0.99 per diluted share, compared to $174 million, or $0.68 per diluted share, for the fourth quarter 2013. Results for the fourth quarter of 2013 included an after-tax charge of $36 million, or $0.14 per diluted share, relating to an asset impairment.  Excluding the impairment charge, net income for the fourth quarter would have totaled $210 million, or $0.82 per diluted share. For the first quarter of 2013, net income totaled $150 million, or $0.59 per diluted share. Revenues for the first quarter of 2014 were $1.3 billion compared to $1.2 billion in the fourth quarter of 2013 and $971 million in the first quarter of 2013.  

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation plc noted, "Our contract drilling margin improved to 54 percent in the first quarter, up from 50 percent in the fourth quarter of 2013, as new rig additions contributed to a 7 percent increase in revenues while contract drilling costs were essentially flat in the quarter. In addition, a reduction in operating downtime to 4.5 percent and higher bonus revenue further supported the increase in quarterly revenues.

"Following shipyard deliveries in 2013 of three ultra-deepwater drillships and two high-specification jackups, we began 2014 with the delivery of two additional jackups, the Noble Houston Colbert and Noble Sam Turner. Both rigs are preparing to commence their initial operations offshore Argentina and the Danish sector of the North Sea, respectively. By the end of 2014, we expect to have taken delivery from shipyards of our final two ultra-deepwater drillships and two of our final three high-specification jackups, largely concluding our current rig construction program. These fleet additions should provide significant contributions to future financial results as our fleet mix continues to shift toward a premium weighting."  

Contract drilling services revenues for the first quarter of 2014 reached $1.2 billion, a 7 percent improvement from $1.1 billion in the fourth quarter of 2013. The increase was due primarily to full or partial contributions in the quarter from several of the Company's new rigs. Also, fleet operating days increased as a result of a reduction in shipyard days. Average daily revenues improved 5 percent in the first quarter to $223,600 compared to the previous quarter average of $212,000, reflecting the addition of premium assets, while fleet utilization rose to 84 percent in the first quarter compared to 82 percent in the fourth quarter of 2013. Contract drilling operating costs increased marginally in the first quarter to $561 million compared to $560 million in the fourth quarter of 2013. 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 $506 million in the first quarter of 2014 as compared to $541 million for the fourth quarter of 2013.  Capital expenditures in the first quarter of 2014 totaled $517 million, including $326 million related to the Company's fleet expansion program. As of March 31, 2014, approximately $1.6 billion in capital expenditures was required to complete the remaining five projects in the Company's newbuild program, comprised of two ultra-deepwater drillships and three high-specification jackups.

Debt as a percentage of total capitalization at March 31, 2014 was 38 percent, unchanged from December 31, 2013, while liquidity, defined as cash and cash equivalents plus availability under revolving credit facilities, totaled $1.03 billion compared to $1.45 billion at December 31, 2013. The decrease in liquidity primarily relates to the maturity in March of our $250 million 7.375 percent senior notes, which were paid off with the proceeds of commercial paper issuance, combined with capital expenditures to meet newbuild deliveries.

Operating Highlights The Company's total contract backlog at March 31, 2014 was an estimated $14.3 billion compared to $15.4 billion at December 31, 2013, reflecting a reduced pace of customer activity in early 2014.

Utilization of the Company's floating rig fleet (semisubmersibles and drillships) improved to 85 percent in the first quarter of 2014 from 84 percent in the fourth quarter of 2013. Excluding the impact of two cold stacked rigs, utilization would have been 92 percent in the first quarter of 2014 and 91 percent in the fourth quarter of 2013. The improvement in utilization was due to a full quarter of operations on the newbuild ultra-deepwater drillship Noble Bob Douglas, which was operating offshore New Zealand, and on the drillship Noble Roger Eason, operating offshore Brazil. The Eason completed a shipyard program in the fourth quarter of 2013. Partially offsetting the utilization improvement was increased idle time on the semisubmersible Noble Homer Ferrington following the completion of a drilling program in the Eastern Mediterranean in early January 2014. Average daily revenues in the floating rig fleet were $393,300 in the first quarter of 2014, or an improvement of approximately 4 percent compared to $378,400 in the fourth quarter of 2013.

First quarter 2014 utilization of the Company's jackup rig fleet was 86 percent, consistent with the fourth quarter of 2013. Fewer operating days on certain rigs in Mexico and West Africa were offset by a full quarter of operations from the newbuild jackup Noble Mick O'Brien, which began operations in the Middle East in the fourth quarter of 2013, and the newbuild jackup Noble Regina Allen, which commenced operations in the first quarter of 2014 in the North Sea.  Average daily revenues during the first quarter improved to $125,000 from $115,700 during the fourth quarter of 2013.

At the end of the first quarter of 2014, 74 percent of the Company's available rig operating days for both our floater and jackup units were committed for the remainder of 2014.  For 2015, an estimated 47 percent of the available rig operating days were committed, including 62 percent and 39 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.

Outlook While addressing the current offshore environment and Noble's enhanced positioning, Williams stated, "We continue to believe the more guarded exploration and production spending pattern shown by some operators during early 2014 is temporary and that contract visibility, especially in the floating rig segment, is likely to improve as we progress further into 2014 and 2015.

"Despite the current market dynamics, Noble is well positioned with limited near-term fleet exposure, a large revenue backlog, strong client relationships, well-timed premium rig additions with attractive contracts, a rapidly declining capital expenditure commitment and successful implementation of new operating systems and procedures that are driving improved financial performance. We continue to anticipate improving free cash flow in 2015 despite current industry developments. We believe the offshore drilling business remains fundamentally sound over the long-term and Noble is better positioned to address the opportunities expected with the next cyclical upturn with a more versatile and focused fleet run by skilled and highly competent crews."

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 two ultra-deepwater drillships and three 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 and Australia. 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.     

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 also has scheduled a conference call and webcast related to its first quarter 2014 results on Thursday, April 17, 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: 88240453, 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,  April 17, 2014, beginning at 12:00 p.m. U.S. Central Daylight Time, through Thursday, May 1, 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: 88240453.  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

March 31, 

2014

2013

 Operating revenues 

 Contract drilling services 

$   1,206,304

$      928,737

 Reimbursables 

36,653

21,174

 Labor contract drilling services 

8,212

21,054

 Other 

1

10

1,251,170

970,975

 Operating costs and expenses 

 Contract drilling services 

561,131

480,126

 Reimbursables 

30,606

14,922

 Labor contract drilling services 

6,226

12,249

 Depreciation and amortization 

245,905

206,156

 General and administrative 

25,637

25,569

 Non-recurring spin-off related costs 

12,405

3,962

 Gain on contract extinguishment 

-

(1,800)

881,910

741,184

 Operating income 

369,260

229,791

 Other income (expense) 

 Interest expense, net of amount capitalized 

(40,392)

(27,301)

 Interest income and other, net 

(1,190)

(425)

 Income before income taxes 

327,678

202,065

 Income tax provision 

(54,436)

(34,352)

 Net income 

273,242

167,713

 Net income attributable to noncontrolling interests 

(16,916)

(17,653)

 Net income attributable to Noble Corporation 

$      256,326

$      150,060

 Net income per share 

 Basic 

$            0.99

$            0.59

 Diluted 

$            0.99

$            0.59

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 

 March 31,  

 December 31, 

2014

2013

 ASSETS 

 Current assets 

 Cash and cash equivalents 

$       114,735

$             114,458

 Accounts receivable 

877,127

949,069

 Prepaid expenses and other current assets 

379,674

327,408

 Total current assets 

1,371,536

1,390,935

 Property and equipment, at cost 

19,691,578

19,198,767

 Accumulated depreciation 

(4,866,009)

(4,640,677)

 Property and equipment, net 

14,825,569

14,558,090

 Other assets 

247,392

268,932

 Total assets 

$  16,444,497

$        16,217,957

 LIABILITIES AND  EQUITY 

 Current liabilities 

 Accounts payable 

$       323,593

$             347,214

 Accrued payroll and related costs 

117,153

151,161

 Dividend payable 

96,869

128,249

 Other current liabilities 

389,189

425,291

 Total current liabilities 

926,804

1,051,915

 Long-term debt 

5,728,782

5,556,251

 Deferred income taxes 

221,380

225,455

 Other liabilities 

317,108

334,308

 Total liabilities 

7,194,074

7,167,929

 Commitments and contingencies 

 Equity 

 Total shareholders' equity 

8,525,757

8,322,583

 Noncontrolling interests 

724,666

727,445

 Total equity 

9,250,423

9,050,028

 Total liabilities and equity 

$  16,444,497

$        16,217,957

 

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 (Unaudited) 

Three Months Ended

March 31, 

2014

2013

 Cash flows from operating activities 

 Net income 

$ 273,242

$ 167,713

 Adjustments to reconcile net income to net cash from operating activities: 

 Depreciation and amortization 

245,905

206,156

 Other changes in operating activities 

(13,351)

(171,317)

 Net cash from operating activities 

505,796

202,552

 Cash flows from investing activities 

 New construction 

(326,197)

(137,893)

 Other capital expenditures 

(177,233)

(204,222)

 Capitalized interest 

(13,853)

(29,875)

 Other investing activities 

(43,505)

(66,312)

 Net cash from investing activities 

(560,788)

(438,302)

 Cash flows from financing activities 

 Net change in borrowings outstanding on bank credit facilities 

422,402

209,680

 Dividend payments 

(96,840)

(33,335)

 Repayment of long-term debt 

(250,000)

-

 Other financing activities 

(20,293)

(8,159)

 Net cash from financing activities 

55,269

168,186

 Net change in cash and cash equivalents 

277

(67,564)

 Cash and cash equivalents, beginning of period 

114,458

282,092

 Cash and cash equivalents, end of period 

$ 114,735

$ 214,528

 

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT 

 (In thousands, except operating statistics) 

 (Unaudited) 

Three Months Ended March 31,

Three Months Ended December 31,

2014

2013

2013

Contract

Contract

Contract

Drilling

Drilling

Drilling

Services

Other

Total

Services

Other

Total

Services

Other

Total

 Operating revenues 

   Contract drilling services 

$ 1,206,304

$            -

$ 1,206,304

$ 928,737

$           -

$ 928,737

$ 1,124,760

$           -

$ 1,124,760

   Reimbursables 

36,133

520

36,653

20,711

463

21,174

31,520

1,678

33,198

   Labor contract drilling services 

-

8,212

8,212

-

21,054

21,054

-

9,091

9,091

   Other 

1

-

1

10

-

10

-

-

-

$ 1,242,438

$    8,732

$ 1,251,170

$ 949,458

$ 21,517

$ 970,975

$ 1,156,280

$ 10,769

$ 1,167,049

 Operating costs and expenses 

   Contract drilling services 

$    561,131

$            -

$    561,131

$ 480,126

$           -

$ 480,126

$    560,259

$           -

$    560,259

   Reimbursables 

30,118

488

30,606

14,469

453

14,922

23,329

925

24,254

   Labor contract drilling services 

-

6,226

6,226

-

12,249

12,249

-

6,879

6,879

   Depreciation and amortization 

241,574

4,331

245,905

202,619

3,537

206,156

233,730

3,236

236,966

   General and administrative 

25,428

209

25,637

25,057

512

25,569

31,553

249

31,802

   Non-recurring spin-off related costs 

320

12,085

12,405

-

3,962

3,962

-

7,260

7,260

   Loss on impairment 

-

-

-

-

-

-

40,103

-

40,103

   Gain on contract extinguishment 

-

-

-

(1,800)

-

(1,800)

-

-

-

$    858,571

$  23,339

$    881,910

$ 720,471

$ 20,713

$ 741,184

$    888,974

$ 18,549

$    907,523

 Operating income 

$    383,867

$ (14,607)

$    369,260

$ 228,987

$      804

$ 229,791

$    267,306

$ (7,780)

$    259,526

 Operating statistics 

   Jackups: 

    Average Rig Utilization 

86%

93%

86%

    Operating Days 

3,413

3,598

3,360

    Average Dayrate 

$    124,962

$ 105,559

$    115,749

   Semisubmersibles: 

    Average Rig Utilization 

79%

84%

84%

    Operating Days 

993

1,053

1,076

    Average Dayrate 

$    392,620

$ 321,037

$    402,358

   Drillships: 

    Average Rig Utilization 

92%

83%

85%

    Operating Days 

990

669

869

    Average Dayrate 

$    393,892

$ 315,216

$    348,702

   FPSO/Submersibles: 

    Average Rig Utilization 

0%

0%

0%

    Operating Days 

-

-

-

    Average Dayrate 

$              -

$            -

$              -

   Total: 

    Average Rig Utilization 

84%

86%

82%

    Operating Days 

5,396

5,320

5,305

    Average Dayrate 

$    223,559

$ 174,578

$    212,019

 

 

 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 

March 31, 

2014

2013

 Allocation of net income 

    Basic 

    Net income attributable to Noble Corporation 

$  256,326

$  150,060

    Earnings allocated to unvested share-based payment awards 

(4,274)

(1,667)

    Net income to common shareholders - basic 

$  252,052

$  148,393

    Diluted 

    Net income attributable to Noble Corporation 

$  256,326

$  150,060

    Earnings allocated to unvested share-based payment awards 

(4,272)

(1,664)

    Net income to common shareholders - diluted 

$  252,054

$  148,396

    Weighted average number of  shares outstanding - basic 

253,940

253,073

    Incremental shares issuable from assumed exercise of stock options 

135

268

    Weighted average number of  shares outstanding - diluted 

254,075

253,341

    Weighted average unvested share-based payment awards 

4,188

2,844

  Earnings per share 

    Basic 

$        0.99

$        0.59

    Diluted 

$        0.99

$        0.59

 

SOURCE Noble Corporation



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