Noble Corporation Reports Fourth Quarter And Full Year 2013 Results

22 Jan, 2014, 17:00 ET from Noble Corporation

LONDON, Jan. 22, 2014 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported fourth quarter 2013 net income of $174 million, or $0.68 per diluted share. Results for the fourth quarter included an after tax charge of $36 million, or $0.14 per diluted share, relating to an impairment taken on the FPSO Seillean.  Excluding the impairment charge, net income for the fourth quarter would have totaled $210 million, or $0.82 per diluted share. For the third quarter of 2013, the Company reported net income of $282 million, or $1.10 per diluted share, which included after tax gains totaling approximately $63 million, or $0.25 per diluted share. Excluding the gains, net income in the third quarter would have been $219 million, or $0.85 per diluted share. During the fourth quarter of 2012, net income was $128 million, or $0.50 per diluted share. Revenues for the fourth quarter of 2013 were $1.17 billion compared to $1.08 billion in the third quarter of 2013 and $966 million in the fourth quarter of 2012.

Net income for the full year 2013 totaled $783 million, or $3.05 per diluted share, on revenues of $4.2 billion, compared to net income of $522 million, or $2.05 per diluted share on revenues of $3.5 billion in 2012.

Addressing the Company's achievements in the fourth quarter of 2013, David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation stated, "Contract drilling revenues continued to grow during the fourth quarter with full or partial contributions from three new ultra-deepwater drillships and the first of our six JU3000N high-specification jackups. Building on an exceptional quarter and year of execution in the shipyard, we also saw the delivery of two more JU3000N jackups – the Noble Regina Allen in December, followed by the Noble Houston Colbert in early 2014. These fleet additions, along with the remaining six projects, of which five rigs are expected to complete construction in 2014, are redefining our Company, creating a premium fleet of offshore drilling rigs capable of addressing our clients' most demanding global well construction assignments."

Another significant achievement during the quarter was the progress made toward our planned divestiture of substantially all of the standard capability assets in our fleet.  We cleared two key hurdles that place the Company on track to complete the divestiture by the end of 2014, with receipt of the private letter ruling from the IRS and the filing last quarter of a registration statement relating to the proposed initial public offering of the new company. While there is some level of uncertainty around global offshore activity in 2014, this is not interfering with our plans for the divestiture. The divestiture has always been about the strategic importance to Noble – a step necessary to allow the two fleets to be optimally managed and operated, placing both in a stronger competitive position for future cycles."

Contract drilling services revenues for the fourth quarter of 2013 of $1.12 billion improved by $84 million, or 8 percent from the third quarter, due primarily to a 9 percent increase in average dayrates to $212,000 compared to $194,600 in the third quarter. Operating days declined slightly during the fourth quarter due in part to an increase in idle and shipyard days, particularly among rigs in the Middle East region, partially offset by the commencement of operations on the ultra-deepwater drillship Noble Bob Douglas and the high-specification jackup Noble Mick O'Brien, and a full quarter of operations from the ultra-deepwater drillships Noble Don Taylor and Noble Globetrotter II, which began operations during the third quarter. The addition of these new rigs contributed to a $74 million increase in contract drilling operating costs in the fourth quarter to $560 million, compared to $486 million in the third quarter.  Contract drilling margin for the fourth quarter was 50.2 percent, compared to 53.3 percent in the third quarter.

Net cash from operating activities was $541 million in the fourth quarter 2013 and $1.7 billion for the full year 2013.  Capital expenditures in the fourth quarter 2013 totaled $763 million, including $505 million related to the Company's fleet expansion program. In 2013, capital expenditures amounted to $2.5 billion, including $1.5 billion associated with the fleet expansion program. As of December 31, 2013, approximately $1.9 billion in capital expenditures was required to complete the remaining seven projects in the Company's newbuild program, comprising two ultra-deepwater drillships and five high-specification jackups. Six of the seven remaining newbuild projects are expected to be delivered from shipyards by the end of 2014, including the jackup Noble Houston Colbert, which was delivered in early-January.

Debt as a percentage of total capitalization at December 31, 2013 was 38.0 percent, up slightly from 37.5 percent at September 30, 2013, while liquidity, defined as cash and cash equivalents plus availability under revolving credit facilities, totaled $1.45 billion compared to $1.77 billion at September 30, 2013.

Operating Highlights Total contract backlog at December 31, 2013 was approximately $15.4 billion compared to $16.2 billion at September 30, 2013. The decline from the third quarter was due in part to a change in the bonus realization assumptions relating to contracts with Petrobras and Shell. The new bonus assumptions reflect the Company's recent history of bonus realization, more stringent regulatory requirements, especially in the U.S. Gulf of Mexico, and changing customer expectations.

During the fourth quarter of 2013, utilization of the Company's floating rig fleet (semisubmersibles and drillships) was 84 percent compared to 79 percent in the third quarter. Excluding the impact of two cold stacked floaters, utilization in the fourth quarter would have been 91 percent compared to 86 percent in the third quarter. The increase for the quarter primarily relates to the return to service of the semisubmersible Noble Homer Ferrington, which spent the majority of the quarter operating under a short-term contract in the Eastern Mediterranean following an idle period, and the drillship Noble Roger Eason, which in December returned to work offshore Brazil following the completion of a shipyard program. Average daily revenues in the floating rig fleet were $378,400 in the fourth quarter, or an improvement of approximately 3 percent from $369,100 in the third quarter, reflecting the commencement of operations on the ultra-deepwater drillship Noble Bob Douglas and a full quarter of operations on the Noble Don Taylor and the Noble Globetrotter II.

Fourth quarter 2013 utilization of the Company's jackup rig fleet was 86 percent compared to 94 percent in the third quarter. The decrease primarily relates to fewer operating days on the Noble Roy Rhodes, the Noble Roger Lewis, the Noble David Tinsley and the Noble Gene Rosser which is expected to be sold during the first quarter of 2014. The decrease in utilization was partially offset by a 3 percent improvement in average daily revenues during the quarter to $115,700 from $112,400 during the third quarter.

At the end of the fourth quarter of 2013, approximately 73 percent of the Company's available rig operating days were committed for 2014, including 78 percent of the floating rig days and 75 percent of the jackup rig days. For 2015, an estimated 44 percent of the available rig operating days were committed, including 61 percent and 38 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 Williams closed by stating, "After the very robust pace of offshore activity over the past four years, our industry may be entering a short and arguably useful pause in the cycle. As was the case in 2013, we entered this year with considerable backlog.  That said, although we believe activity in the jackup sector is best defined as a steady state, the reality is that we find ourselves evaluating fewer floating rig contract opportunities today than we did a year ago. We expect to have additional contract opportunities under review as the year progresses, but it is increasingly clear that the first half of 2014 is likely to be characterized by lower rig utilization. The lower utilization is likely to be more pronounced for the floating rigs with limited technical features. Noble's exposure to a weaker floating rig sector is limited in 2014, with only 22 percent of our operating days available."

We are confident about the long-term outlook for offshore drilling and remain committed to a capital allocation strategy that promotes disciplined growth with strong returns and strategic appeal while offering the flexibility to consider other actions that promote enhanced shareholder value. In the ultra-deepwater segment, which represents a growing portion of our revenue, we continue to observe a fundamentally sound business. In the face of generally steady crude oil prices, successful exploration programs with over 240 announced deepwater discoveries since 2008, continued geographic expansion and a building backlog of field development projects, the segment is poised to provide exceptional future growth opportunities. Our transformation to a company with a predominately premium asset fleet positions Noble to successfully address the future opportunities in ultra-deepwater and high-specification jackup drilling applications."

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 four  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 fourth quarter and full year 2013 results on Thursday, January 23, 2014, at 8:00 a.m. U.S. Central Standard 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: 88221538, 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,  January 23, 2014, beginning at 12:00 p.m. U.S. Central Standard Time, through Thursday, February 6, 2014, ending at 11:00 p.m. U.S. Central Standard 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: 88221538.  The replay will also be available on the Company's Web site following the end of the live call.

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF INCOME 

 (In thousands, except per share amounts) 

 (Unaudited) 

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2013

2012

2013

2012

 Operating revenues 

 Contract drilling services 

$   1,124,760

$      921,603

$   4,070,070

$   3,349,362

 Reimbursables 

33,198

21,405

111,874

115,495

 Labor contract drilling services 

9,091

23,352

52,241

81,890

 Other 

-

7

105

265

1,167,049

966,367

4,234,290

3,547,012

 Operating costs and expenses 

 Contract drilling services 

560,259

478,841

2,014,217

1,769,428

 Reimbursables 

24,254

17,478

85,548

94,096

 Labor contract drilling services 

6,879

12,721

36,604

46,752

 Depreciation and amortization 

236,966

208,842

879,422

758,621

 General and administrative 

31,802

24,602

117,997

99,990

 Incremental spin-off related costs 

7,260

5,106

17,702

7,196

 Loss on impairment 

40,103

2,039

43,688

20,384

 Gain on disposal of assets, net 

-

-

(35,646)

-

 Gain on contract settlements/extinguishments, net 

-

-

(46,800)

(33,255)

907,523

749,629

3,112,732

2,763,212

 Operating income 

259,526

216,738

1,121,558

783,800

 Other income (expense) 

 Interest expense, net of amount capitalized 

(31,185)

(28,980)

(106,300)

(85,763)

 Interest income and other, net 

1,167

662

2,754

5,188

 Income before income taxes 

229,508

188,420

1,018,012

703,225

 Income tax provision 

(40,600)

(53,981)

(167,606)

(147,088)

 Net income 

188,908

134,439

850,406

556,137

 Net income attributable to noncontrolling interests 

(14,848)

(6,862)

(67,709)

(33,793)

 Net income attributable to Noble Corporation 

$      174,060

$      127,577

$      782,697

$      522,344

 Net income per share 

 Basic 

$            0.68

$            0.50

$            3.05

$            2.05

 Diluted 

$            0.68

$            0.50

$            3.05

$            2.05

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 

 December 31, 

 December 31, 

2013

2012

 ASSETS 

 Current assets 

 Cash and cash equivalents 

$            114,458

$            282,092

 Accounts receivable 

949,069

743,673

 Prepaid expenses and other current assets 

327,408

279,560

 Total current assets 

1,390,935

1,305,325

 Property and equipment, net 

14,558,090

13,025,972

 Other assets 

268,932

276,477

 Total assets 

$       16,217,957

$       14,607,774

 LIABILITIES AND  EQUITY 

 Current liabilities 

 Accounts payable 

$            347,214

$            350,147

 Accrued payroll and related costs 

151,161

132,728

 Dividend payable 

128,249

66,369

 Other current liabilities 

425,291

362,205

 Total current liabilities 

1,051,915

911,449

 Long-term debt 

5,556,251

4,634,375

 Deferred income taxes 

225,455

226,045

 Other liabilities 

334,308

347,615

 Total liabilities 

7,167,929

6,119,484

 Commitments and contingencies 

 Equity 

 Total shareholders' equity 

8,322,583

7,723,166

 Noncontrolling interests 

727,445

765,124

 Total equity 

9,050,028

8,488,290

 Total liabilities and equity 

$       16,217,957

$       14,607,774

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 (Unaudited) 

Twelve Months Ended

December 31,

2013

2012

 Cash flows from operating activities 

 Net income 

$            850,406

$            556,137

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

 Depreciation and amortization 

879,422

758,621

 Loss on impairment 

43,688

20,384

 Gain on disposal of assets, net 

(35,646)

-

 Other changes in operating activities 

(35,553)

46,551

 Net cash from operating activities 

1,702,317

1,381,693

 Cash flows from investing activities 

 New construction 

(1,526,523)

(586,746)

 Other capital expenditures 

(845,903)

(947,090)

 Capitalized interest 

(115,094)

(135,975)

 Proceeds from disposal of assets 

61,000

-

 Other investing activities 

(58,587)

(121,077)

 Net cash from investing activities 

(2,485,107)

(1,790,888)

 Cash flows from financing activities 

 Net change in borrowings on bank credit facilities  

1,221,333

(635,192)

 Repayment of long-term debt 

(300,000)

-

 Proceeds from issuance of senior notes, net of debt issuance costs 

-

1,186,636

 Contributions from joint venture partners 

-

40,000

 Dividends paid to joint venture partners 

(105,388)

-

 Dividends/Par value reduction payments to shareholders 

(194,913)

(138,293)

 Other financing activities 

(5,876)

(1,060)

 Net cash from financing activities 

615,156

452,091

 Net change in cash and cash equivalents 

(167,634)

42,896

 Cash and cash equivalents, beginning of period 

282,092

239,196

 Cash and cash equivalents, end of period 

$            114,458

$            282,092

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT 

 (In thousands, except operating statistics) 

 (Unaudited) 

Three Months Ended December 31,

Three Months Ended September 30,

2013

2012

2013

Contract

Contract

Contract

Drilling

Drilling

Drilling

Services

Other

Total

Services

Other

Total

Services

Other

Total

 Operating revenues 

 Contract drilling services 

$       1,124,760

$             -

$    1,124,760

$    921,603

$             -

$    921,603

$    1,041,118

$                -

$   1,041,118

 Reimbursables 

31,520

1,678

33,198

21,043

362

21,405

28,840

402

29,242

 Labor contract drilling services 

-

9,091

9,091

-

23,352

23,352

-

8,493

8,493

 Other 

-

-

-

7

-

7

28

-

28

$       1,156,280

$   10,769

$    1,167,049

$    942,653

$   23,714

$    966,367

$    1,069,986

$       8,895

$   1,078,881

 Operating costs and expenses 

 Contract drilling services 

$          560,259

$             -

$       560,259

$    478,841

$             -

$    478,841

$       485,861

$              -

$      485,861

 Reimbursables 

23,329

925

24,254

17,127

351

17,478

23,281

390

23,671

 Labor contract drilling services 

-

6,879

6,879

-

12,721

12,721

-

8,127

8,127

 Depreciation and amortization 

233,730

3,236

236,966

205,329

3,513

208,842

219,695

4,016

223,711

 General and administrative 

31,553

249

31,802

24,060

542

24,602

33,346

430

33,776

 Incremental spin-off related costs  

7,201

59

7,260

5,002

104

5,106

2,388

27

2,415

 Loss on impairment 

40,103

-

40,103

-

2,039

2,039

3,585

-

3,585

 Gain on disposal of assets, net 

-

-

-

-

-

-

(35,646)

-

(35,646)

 Gain on contract settlements/extinguishments, net 

-

-

-

-

-

-

(45,000)

-

(45,000)

$          896,175

$   11,348

$       907,523

$    730,359

$   19,270

$    749,629

$       687,510

$     12,990

$      700,500

 Operating income 

$          260,105

$       (579)

$       259,526

$    212,294

$     4,444

$    216,738

$       382,476

$     (4,095)

$      378,381

 Operating statistics 

 Jackups: 

 Average Rig Utilization 

86%

89%

94%

 Operating Days 

3,360

3,520

3,635

 Average Dayrate 

$          115,749

$    100,356

$       112,414

 Semisubmersibles: 

 Average Rig Utilization 

84%

85%

79%

 Operating Days 

1,076

1,096

1,012

 Average Dayrate 

$          402,358

$    360,226

$       380,048

 Drillships: 

 Average Rig Utilization 

85%

82%

79%

 Operating Days 

869

679

702

 Average Dayrate 

$          348,702

$    255,667

$       353,278

 FPSO/Submersibles: 

 Average Rig Utilization 

0%

0%

0%

 Operating Days 

-

-

-

 Average Dayrate 

$                      -

$               -

$                   -

 Total: 

 Average Rig Utilization 

82%

83%

85%

 Operating Days 

5,305

5,295

5,349

 Average Dayrate 

$          212,019

$    174,065

$       194,645

 

 NOBLE CORPORATION 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 

 Twelve months ended 

December 31,

December 31,

2013

2012

2013

2012

 Basic 

 Net income attributable to Noble Corporation 

$    174,060

$    127,577

$    782,697

$    522,344

 Earnings allocated to unvested share-based payment awards 

(2,077)

(1,301)

(9,271)

(5,309)

 Net income to common shareholders - basic 

$    171,983

$    126,276

$    773,426

$    517,035

 Diluted 

 Net income attributable to Noble Corporation 

$    174,060

$    127,577

$    782,697

$    522,344

 Earnings allocated to unvested share-based payment awards 

(2,075)

(1,300)

(9,261)

(5,302)

 Net income to common shareholders - diluted 

$    171,985

$    126,277

$    773,436

$    517,042

 Weighted average number of  shares outstanding - basic 

253,423

252,722

253,288

252,435

 Incremental shares issuable from assumed exercise of stock options 

238

253

259

356

 Weighted average number of  shares outstanding - diluted 

253,661

252,975

253,547

252,791

 Weighted average unvested share-based payment awards 

3,061

2,604

3,036

2,592

 Earnings per share 

 Basic 

$          0.68

$          0.50

$          3.05

$          2.05

 Diluted 

$          0.68

$          0.50

$          3.05

$          2.05

SOURCE Noble Corporation



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