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Noble Corporation Reports Record Second Quarter Earnings of $2.16 Per Share, Up 66 Percent From Year-Earlier Quarter
SUGAR LAND, Texas, July 18 /PRNewswire-FirstCall/ -- Noble Corporation
( NE) today reported second quarter 2007 earnings of $290 million or
$2.16 per diluted share versus $180 million or $1.30 for the second quarter
of last year. Per-share earnings were up 66 percent from the second quarter
of 2006 and up 16 percent from the $1.86 per share reported for the first
quarter of 2007.
Results for the second quarter of 2007 include after-tax charges of
$.08 per share related to the anticipated sale of the Company's downhole
rotary steerable tool business, retirement of a senior executive, and costs
associated with the ongoing independent investigation of the Company's
Nigerian operations.
Contract drilling services revenues for the 2007 second quarter were
$658 million, up 41 percent from the year-earlier quarter. Cash operating
margins exceeded 67 percent, generating $362 million in net cash provided
by operating activities.
The Company invested $342 million in capital projects during the
quarter and repurchased 188,000 ordinary shares at a total investment of
$16 million. Debt as a percentage of total capitalization remained flat at
approximately 18 percent at June 30, 2007.
"Strategic placement of the Company's assets has driven the continued
increases in dayrates and, when coupled with superb execution by our
employees, has yielded record operating margins, earnings and shareholder
returns," said Mark A. Jackson, Chairman, President and Chief Executive
Officer.
Earnings for the first six months of 2007 totaled $4.01 per diluted
share compared with $2.35 in the same period last year. Contract drilling
services revenues were $1.2 billion and earnings were $540 million in the
first half of 2007, up 41 percent and 66 percent, respectively, from the
year-earlier period.
Operations Review
All of the Company's premium jackups are located in major international
markets. In Mexico, Noble received one-year contracts on three jackups
currently operating for PEMEX: the Noble Bill Jennings (390-foot water
depth) at a dayrate of $186,000; the Noble Lewis Dugger (300') at a dayrate
of $171,000; and the Noble Tom Jobe (250') at a dayrate of $150,000. In the
North Sea, the Noble Piet van Ede (250') and Noble Ronald Hoope (250') have
been contracted for six months through mid-2008, each at a dayrate of
$205,000. In the Middle East, the Noble Mark Burns (300') and the Noble
Chuck Syring (250') received two-year commitments at strong market rates.
The Company has commitments for substantially all available days for our
jackups in 2007, and approximately 65 percent are now committed for 2008.
In the deepwater, the Company has received a Letter of Award from PEMEX
for the Noble Max Smith to pursue exploration and development offshore
Mexico under a three-year contract at a dayrate of $484,000 commencing in
the fourth quarter of 2008. In Brazil, the Company secured a seven-month
contract with Chevron for the Noble Leo Segerius at a dayrate of $525,000
commencing in the third quarter of 2008.
The Noble Clyde Boudreaux went to work for Shell on June 9, increasing
to six the number of deepwater semisubmersibles operated in the U.S. Gulf
of Mexico. One of these semisubmersibles, the Noble Paul Romano, has
entered the shipyard for a planned NC-5(SM) mooring system upgrade. This
upgrade, the second of four planned upgrades on our deepwater fleet, is
expected to be completed in the third quarter.
The Company budgeted 602 unpaid shipyard days in 2007 for major
upgrades, repairs and inspections of Noble's existing fleet, comprising 21
separate projects. The majority of these budgeted days, 410, are expected
to occur during the second half of 2007 and comprise 13 separate projects.
Noble Corporation is a leading provider of diversified services for the
oil and gas industry. The Company performs contract drilling services with
its fleet of 62 mobile offshore drilling units located in key markets
worldwide, including the U.S. Gulf of Mexico, Middle East, Mexico, the
North Sea, Brazil, West Africa and India. The fleet count includes six rigs
under construction. Additional information on Noble Corporation is
available via the worldwide web at http://www.noblecorp.com.
This news release may contain "forward-looking statements" about the
business, financial performance and prospects of the Company. Statements
about the Company's or management's plans, intentions, expectations,
beliefs, estimates, predictions, or similar expressions for the future are
forward-looking statements. No assurance can be given that the outcomes of
these forward-looking statements will be realized, and actual results could
differ materially from those expressed as a result of various factors. A
discussion of these factors, including risks and uncertainties, is set
forth from time to time in the Company's filings with the U.S. Securities
and Exchange Commission.
Conference Call
Noble will hold a conference call on Thursday, July 19, 2007, at 1:00
p.m., Central time, to provide shareholders and other interested parties an
overview of the Company's second quarter 2007 performance. Those interested
in hearing the conference call may listen via telephone by dialing
800-737-8127, or internationally 212-231-6042, using pass code 21324169.
Alternatively, interested parties may listen to the call over the Internet
through the Investor section of the Company's Web site, using the "Web
cast" link. A replay of the conference call will be available on Thursday,
July 19, 2007, beginning at 5:00 p.m., Central time, through Wednesday,
July 25, 2007, ending at 5:00 p.m., Central time. The phone number for the
conference call replay is 800-633-8284 or internationally 402-977-9140,
using the access code 21324169. The conference call may include non-GAAP
financial measures. Noble will post a reconciliation of those measures to
the most directly comparable GAAP measures in the Investor section of the
Company's Web site under the heading "Reg. G Reconciliation."
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
OPERATING REVENUES
Contract drilling services $657,504 $466,957 $1,234,419 $875,304
Reimbursables 28,608 20,640 59,751 43,712
Labor contract drilling
services 39,165 27,349 75,720 53,865
Engineering, consulting and
other 722 2,568 2,533 6,548
725,999 517,514 1,372,423 979,429
OPERATING COSTS AND EXPENSES
Contract drilling services 212,050 173,228 408,892 334,091
Reimbursables 24,608 17,544 52,154 37,596
Labor contract drilling
services 32,454 23,080 60,857 45,019
Engineering, consulting and
other 7,255 7,276 10,896 10,547
Depreciation and amortization 68,323 62,545 132,788 121,906
Selling, general and
administrative 20,302 10,655 34,528 20,940
Hurricane losses and
recoveries, net - - - (4,404)
364,992 294,328 700,115 565,695
OPERATING INCOME 361,007 223,186 672,308 413,734
OTHER INCOME (EXPENSE)
Interest expense, net of
amount capitalized (1,231) (1,773) (2,735) (14,252)
Other, net 512 1,893 1,670 4,235
INCOME BEFORE INCOME TAXES 360,288 223,306 671,243 403,717
INCOME TAX PROVISION (70,257) (43,545) (130,892) (78,725)
NET INCOME $290,031 $179,761 $ 540,351 $324,992
NET INCOME PER SHARE:
Basic $2.18 $1.31 $4.05 $2.38
Diluted $2.16 $1.30 $4.01 $2.35
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 132,964 136,800 133,261 136,759
Diluted 134,370 138,297 134,583 138,375
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
June 30, December 31,
2007 2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 152,430 $ 61,710
Accounts receivable 496,868 408,241
Insurance receivables 32,852 54,191
Inventories 4,655 4,461
Prepaid expenses 22,553 20,491
Other current assets 24,594 20,886
Total current assets 733,952 569,980
PROPERTY AND EQUIPMENT
Drilling equipment and facilities 5,741,765 5,215,477
Other 81,947 71,870
5,823,712 5,287,347
Accumulated depreciation (1,526,328) (1,428,954)
4,297,384 3,858,393
OTHER ASSETS 161,932 157,541
$5,193,268 $4,585,914
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 9,970 $ 9,629
Accounts payable 180,019 196,111
Accrued payroll and related costs 97,953 93,251
Taxes payable 70,692 52,793
Interest payable 10,421 9,683
Other current liabilities 72,835 64,793
Total current liabilities 441,890 426,260
LONG-TERM DEBT 814,417 684,469
DEFERRED INCOME TAXES 223,445 219,521
OTHER LIABILITIES 51,329 34,019
1,531,081 1,364,269
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST (6,703) (7,348)
SHAREHOLDERS' EQUITY
Ordinary shares-par value $0.10 per
share; 400,000 shares authorized;
134,170 shares issued and outstanding
in 2007; 134,592 shares issued
and outstanding in 2006 13,417 13,459
Capital in excess of par value 720,025 789,354
Retained earnings 2,958,619 2,446,056
Accumulated other comprehensive loss (23,171) (19,876)
3,668,890 3,228,993
$5,193,268 $4,585,914
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $540,351 $324,992
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and impairment 137,788 126,755
Deferred income tax provision 6,324 12,259
Share-based compensation expense 16,903 10,106
Other (7,279) 6,668
Other changes in current assets and
liabilities:
Accounts receivable (88,627) (106,945)
Other current assets 14,325 (31,205)
Accounts payable (20,960) 6,011
Other current liabilities 33,243 21,919
Net cash provided by operating
activities 632,068 370,560
CASH FLOWS FROM INVESTING ACTIVITIES
New construction (323,338) (281,672)
Other capital expenditures (216,452) (160,431)
Major maintenance expenditures (39,370) (26,782)
Accrued capital expenditures 22,173 -
Proceeds from sales of property and
equipment 3,284 -
Proceeds from Smedvig disposition - 691,261
Proceeds from sales and maturities of
marketable securities - 6,582
Net cash provided by (used for)
investing activities (553,703) 228,958
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on credit facilities 220,000 -
Payments on bank credit facilities (85,000) (135,000)
Payments of other long-term debt (4,730) (604,404)
Net proceeds from employee stock
transactions 13,560 7,642
Proceeds from issuance of senior
notes, net of debt issuance costs - 295,953
Dividends paid (10,788) (10,997)
Repurchases of ordinary shares (120,687) (50,667)
Net cash provided by (used for)
financing activities 12,355 (497,473)
NET INCREASE IN CASH AND CASH EQUIVALENTS 90,720 102,045
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 61,710 121,845
CASH AND CASH EQUIVALENTS, END OF PERIOD $152,430 $223,890
NOBLE CORPORATION AND SUBSIDIARIES
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
(In thousands, except utilization amounts,
operating days and average dayrates)
(Unaudited)
Three Months Ended June 30,
2007
International Domestic
Contract Contract
Drilling Drilling Other Total
OPERATING REVENUES
Contract drilling services $490,962 $166,542 $ - $657,504
Reimbursables 16,766 3,090 8,752 28,608
Labor contract drilling services - - 39,165 39,165
Engineering, consulting and other 268 108 346 722
$507,996 $169,740 $48,263 $725,999
OPERATING COSTS AND EXPENSES
Contract drilling services $170,691 $ 41,359 $ - $212,050
Reimbursables 13,946 2,760 7,902 24,608
Labor contract drilling services - - 32,454 32,454
Engineering, consulting and other 12 3 7,240 7,255
Depreciation and amortization 49,824 16,284 2,215 68,323
Selling, general and
administrative 15,591 4,152 559 20,302
$250,064 $ 64,558 $50,370 $364,992
OPERATING INCOME $257,932 $105,182 $(2,107) $361,007
OPERATING STATISTICS
Jackups:
Average Rig Utilization 98% N/A 98%
Operating Days 3,554 N/A 3,554
Average Dayrate $112,804 N/A $112,804
Semisubmersibles - (6,000 feet
or greater):
Average Rig Utilization 100% 100% 100%
Operating Days 182 373 555
Average Dayrate $166,795 $343,754 $285,758
Semisubmersibles - (less than
6,000 feet):
Average Rig Utilization 81% 100% 87%
Operating Days 148 91 239
Average Dayrate $166,705 $173,462 $169,283
Drillships:
Average Rig Utilization 100% N/A 100%
Operating Days 273 N/A 273
Average Dayrate $128,874 N/A $128,874
Submersibles:
Average Rig Utilization N/A 100% 100%
Operating Days N/A 273 273
Average Dayrate N/A $ 82,137 $82,137
Total:
Average Rig Utilization 97% 100% 98%
Operating Days 4,156 737 4,893
Average Dayrate $118,138 $225,872 $134,364
(1) Effective January 1, 2007, the Company's 30 percent net profit
interest in the Noble Kolskaya is reported in labor contract drilling
services. For the quarters ended June 30, 2007, 2006 and March 31,
2007, Noble Kolskaya labor contract drilling margin was $3.7 million,
$2.0 million and $3.6 million, respectively.
Three Months Ended June 30,
2006
International Domestic
Contract Contract
Drilling Drilling Other Total
OPERATING REVENUES
Contract drilling services $329,368 $137,589 $ - $466,957
Reimbursables 12,225 2,704 5,711 20,640
Labor contract drilling services - - 27,349 27,349
Engineering, consulting and other 556 105 1,907 2,568
$342,149 $140,398 $34,967 $517,514
OPERATING COSTS AND EXPENSES
Contract drilling services $133,487 $ 39,741 $ - $173,228
Reimbursables 10,443 2,298 4,803 17,544
Labor contract drilling services - - 23,080 23,080
Engineering, consulting and other 352 (46) 6,970 7,276
Depreciation and amortization 48,985 12,369 1,191 62,545
Selling, general and
administrative 5,766 3,804 1,085 10,655
$199,033 $ 58,166 $37,129 $294,328
OPERATING INCOME $143,116 $ 82,232 $(2,162) $223,186
OPERATING STATISTICS
Jackups:
Average Rig Utilization 98% N/A 98%
Operating Days 3,581 N/A 3,581
Average Dayrate $ 71,826 N/A $ 71,826
Semisubmersibles - (6,000 feet
or greater):
Average Rig Utilization 100% 100% 100%
Operating Days 182 364 546
Average Dayrate $145,698 $273,779 $231,085
Semisubmersibles - (less than
6,000 feet):
Average Rig Utilization 100% 100% 100%
Operating Days 91 168 259
Average Dayrate $196,709 $128,147 $152,279
Drillships:
Average Rig Utilization 100% N/A 100%
Operating Days 273 N/A 273
Average Dayrate $ 96,313 N/A $ 96,313
Submersibles:
Average Rig Utilization N/A 97% 97%
Operating Days N/A 264 264
Average Dayrate N/A $ 61,402 $ 61,402
Total:
Average Rig Utilization 98% 99% 98%
Operating Days 4,127 796 4,923
Average Dayrate $ 79,808 $172,950 $ 94,852
(1) Effective January 1, 2007, the Company's 30 percent net profit
interest in the Noble Kolskaya is reported in labor contract drilling
services. For the quarters ended June 30, 2007, 2006 and March 31,
2007, Noble Kolskaya labor contract drilling margin was $3.7 million,
$2.0 million and $3.6 million, respectively.
Three Months Ended March 31,
2007
International Domestic
Contract Contract
Drilling Drilling Other Total
OPERATING REVENUES
Contract drilling services $429,478 $147,437 $ - $576,915
Reimbursables 15,989 3,780 11,374 31,143
Labor contract drilling services - - 36,555 36,555
Engineering, consulting and other 92 138 1,581 1,811
$445,559 $151,355 $49,510 $646,424
OPERATING COSTS AND EXPENSES
Contract drilling services $160,124 $ 36,718 $ - $196,842
Reimbursables 13,284 3,655 10,607 27,546
Labor contract drilling services - - 28,403 28,403
Engineering, consulting and other 161 (20) 3,500 3,641
Depreciation and amortization 48,071 13,738 2,656 64,465
Selling, general and
administrative 10,390 3,270 566 14,226
$232,030 $ 57,361 $45,732 $335,123
OPERATING INCOME $213,529 $ 93,994 $ 3,778 $311,301
OPERATING STATISTICS
Jackups:
Average Rig Utilization 98% N/A 98%
Operating Days 3,512 N/A 3,512
Average Dayrate $102,112 N/A $102,112
Semisubmersibles - (6,000 feet
or greater):
Average Rig Utilization 100% 100% 100%
Operating Days 180 360 540
Average Dayrate $153,023 $313,256 $259,837
Semisubmersibles - (less than
6,000 feet):
Average Rig Utilization 50% 100% 67%
Operating Days 90 90 180
Average Dayrate $199,055 $154,390 $176,722
Drillships:
Average Rig Utilization 93% N/A 93%
Operating Days 252 N/A 252
Average Dayrate $100,740 N/A $100,740
Submersibles:
Average Rig Utilization N/A 95% 95%
Operating Days N/A 256 256
Average Dayrate N/A $ 81,047 $ 81,047
Total:
Average Rig Utilization 95% 98% 96%
Operating Days 4,034 706 4,740
Average Dayrate $106,461 $208,755 $121,705
(1) Effective January 1, 2007, the Company's 30 percent net profit
interest in the Noble Kolskaya is reported in labor contract drilling
services. For the quarters ended June 30, 2007, 2006 and March 31,
2007, Noble Kolskaya labor contract drilling margin was $3.7 million,
$2.0 million and $3.6 million, respectively.
SOURCE Noble Corporation