Noble Corporation Reports Third Quarter 2012 Earnings of $0.45 per Diluted Share

17 Oct, 2012, 17:00 ET from Noble Corporation

ZUG, Switzerland, Oct. 17, 2012 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported third quarter 2012 earnings of $115 million, or $0.45 per diluted share, compared to $160 million, or $0.63 per diluted share, for the second quarter of 2012.  For the third quarter 2011, the Company reported earnings of $135 million, or $0.53 per diluted share. Contract drilling services revenues for the third quarter of 2012 were $833 million compared to $848 million for the second quarter of 2012. For the third quarter of 2011, contract drilling services revenues totaled $705 million.

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation, stated, "The decline in third quarter financial results was due primarily to lower than expected utilization on two of our new drillships, Noble Bully I and Noble Bully II, as we worked to solve a number of operational issues, as well as delays in returning rigs to work in Brazil which were caused by a number of labor actions within the shipyard and regulatory support infrastructure that caused two rigs to be delayed following completion of ongoing projects. Further, we experienced other out of service time involving several rigs and in response to these events and the effects of Hurricane Isaac, operating costs in the quarter moved ahead of our expectations, further pressuring margins. With few exceptions, these matters have now been resolved and we expect improved operational performance in the final quarter of 2012.

"At the same time, we experienced improved utilization in our jackup rig fleet and were able to secure a number of additional contracts at significantly higher dayrates. We also expanded our global operating footprint with the mobilization to Australia of the semisubmersible Noble Clyde Boudreaux. This rig recently commenced its contract at a dayrate of $417,000.  During the quarter we also reached a number of key milestones in our newbuild construction program as we prepare to deliver three ultra-deepwater drillships and three high specification jackups (JU3000N design) in 2013, continuing our efforts to transform the Noble fleet to a premium, versatile and more technically advanced fleet."

Net cash from operating activities totaled $396 million in the third quarter of 2012, compared to $435 million in the second quarter, reflecting the impact on revenues and operating costs of several operational events in the Company's fleet. Average dayrates across the fleet declined 7 percent in the third quarter to $168,600 from $181,700 in the second quarter, due primarily to lower average daily revenues for floating rigs, which saw declines for both the Noble Homer Ferrington, which commenced a new contract in the Eastern Mediterranean at a reduced dayrate, and the Noble Roger Eason, which began receiving a special shipyard dayrate while undergoing a life enhancement program.

Total debt was $4.6 billion at September 30, 2012 compared to $4.4 billion at June 30, 2012 and $4.1 billion at December 31, 2011. Debt as a percentage of total capitalization increased slightly from the second quarter to approximately 35.6 percent. Capital expenditures in the first nine months of 2012 totaled $1.2 billion, including $441 million (excluding capitalized interest) related to Noble's fleet transformation program. The Company expects capital expenditures for 2012 to total approximately $1.8 billion, including $580 million for newbuild construction programs.

Operations Highlights

At the end of the third quarter of 2012, 83 percent of the Company's available rig operating days were committed for the remainder of 2012, including 87 percent of the floating rig fleet and 87 percent of the jackup fleet. For 2013, 69 percent of operating days are committed, including 80 percent of the floating rig days and 67 percent of jackup days.  Total backlog at September 30, 2012 was approximately $14.8 billion.

In the U.S. Gulf of Mexico, the ultra-deepwater drillship Noble Globetrotter I completed final testing and commissioning procedures in late-September 2012, a process that hampered the rig's contribution in the third quarter. Also, repairs and upgrades to the deepwater semisubmersible Noble Max Smith were significantly completed by the end of the third quarter. However, the rig's departure for Brazil, where it is expected to commence a three-year contract by early-February 2013, is expected to be delayed until late-October.

The Company's 12-rig jackup fleet operating in Mexico experienced improved utilization in the third quarter to 99 percent, up from 69 percent in the second quarter, following multi-year contract awards for the Noble Earl Frederickson, Noble Tom Jobe and Noble Sam Noble. The Company expects near full contract utilization of the fleet for the immediate future with promising contract opportunities for three jackups with expected availability by late 2012.  

In the North Sea, where the Company operates eight jackup rigs and one semisubmersible, utilization in the third quarter was 98 percent compared to 100 percent in the second quarter, with the slight decrease the result of a planned 21-day maintenance program on the Noble Byron Welliver. Recent contract awards at industry-leading dayrates were received for the Noble Hans Deul, Noble Al White, Noble Piet van Ede, Noble Ronald Hoope and a letter-of-intent was received for the Noble Lynda Bossler, resulting in contractual commitments on five of the Company's eight jackups into 2014.

The Company's 18-rig jackup fleet operating in the Middle East and India recorded utilization of 72 percent in the third quarter compared to 76 percent in the second quarter, with the decline due primarily to the Noble Dick Favor, which completed a contract during the quarter and is currently idle, and the Noble Kenneth Delaney, which is awaiting the conclusion of the monsoon season in Southern Asia before moving back to a drilling location offshore India. The rig is expected to recommence its contract in mid-November 2012. Utilization in the region is expected to improve following the recent commencement of a one-year contract award for the Noble Gus Androes at a dayrate of $125,000 and a three-year contract on the Noble Charles Copeland at $95,000. Also, the Company was recently awarded new contracts for the Noble David Tinsley and Noble Alan Hay for continued work in the Middle East. Both contract awards cover durations of three years.

In closing, Williams noted, "Industry fundamentals remain solid across the offshore spectrum, as evidenced by the continued success with securing contracts for both floating and jackup rigs. The standard jackup sector has experienced substantial improvement over 2012, with recent contract signings on 15 rigs in the Noble fleet representing an average dayrate improvement of approximately 40 percent from the previous contract dayrate. In the ultra-deepwater sector, a record year for announced discoveries, along with expanding geographic reach by our customers, greater offshore access and a building field development project backlog, are leading to expected higher customer demand, longer contract durations and the prospects for higher dayrates. Our newbuild delivery schedule is well timed to address increasing customer needs for ultra-deepwater drillships and high-specification jackups, both of which address the increasing complexity of many wells to be drilled in the future, while offering improved operating efficiencies.

"The anticipated scope of our fleet transformation is beginning to take shape, as new assets are added to the active fleet, improving the overall mix of the asset base, while serving as the most significant catalyst for improving earnings and cash flow over the coming years."

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 79 offshore drilling units (including five ultra-deepwater rigs and six jackup drilling rigs currently under construction), located worldwide, including in the U.S. Gulf of Mexico, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India and the Asian Pacific. Noble's shares are traded on the New York Stock Exchange under the symbol "NE." Additional information on Noble Corporation is available on the Company's Web site at http://www.noblecorp.com.

Conference Call

Noble has scheduled a conference call and webcast related to its third quarter 2012 results on Thursday, October 18, 2012, 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: 20608573, 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, October 18, 2012, beginning at 11:00 a.m. U.S. Central Daylight Time, through Thursday, November 1, 2012, ending at 5:00 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: 20608573.  The replay will also be available on the Company's Web site following the end of the live call. The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the "Investor Relations" section of the Company's Web site under the heading "Regulation G Reconciliations."

Statements regarding financial performance, contract backlog, earnings, costs, capital expenditures, revenue, rig demand, fleet composition, condition or performance, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships or demand, 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. 

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF INCOME 

 (In thousands, except per share amounts) 

 (Unaudited) 

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

 Operating revenues 

 Contract drilling services 

$      833,212

$      704,892

$   2,427,759

$   1,837,047

 Reimbursables 

28,137

17,438

94,090

63,851

 Labor contract drilling services 

22,667

15,564

58,538

43,123

 Other 

16

8

258

766

884,032

737,902

2,580,645

1,944,787

 Operating costs and expenses 

 Contract drilling services 

449,125

358,547

1,292,638

1,001,638

 Reimbursables 

21,047

13,971

76,618

49,797

 Labor contract drilling services 

12,991

8,053

34,070

25,326

 Depreciation and amortization 

195,087

166,213

549,779

487,454

 Selling, general and administrative 

26,858

27,536

75,388

72,883

 Loss on impairment 

-

-

18,345

-

 Gain on contract settlements/extinguishments, net 

-

-

(33,255)

(21,202)

705,108

574,320

2,013,583

1,615,896

 Operating income 

178,924

163,582

567,062

328,891

 Other income (expense) 

 Interest expense, net of amount capitalized 

(25,635)

(11,530)

(56,783)

(45,400)

 Interest income and other, net 

1,553

1,117

4,526

3,175

 Income before income taxes 

154,842

153,169

514,805

286,666

 Income tax provision 

(25,162)

(17,614)

(93,107)

(42,481)

 Net income 

129,680

135,555

421,698

244,185

 Net income attributable to noncontrolling interests 

(14,906)

(238)

(26,931)

(290)

 Net income attributable to Noble Corporation 

$      114,774

$      135,317

$      394,767

$      243,895

 Net income per share 

 Basic 

$            0.45

$            0.53

$            1.55

$            0.96

 Diluted 

$            0.45

$            0.53

$            1.55

$            0.96

 

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 

 September 30, 

 December 31, 

2012

2011

 ASSETS 

 Current assets 

 Cash and cash equivalents 

$              218,467

$           239,196

 Accounts receivable 

791,408

587,163

 Prepaid expenses and other current assets 

294,617

233,253

 Total current assets 

1,304,492

1,059,612

 Property and equipment 

16,637,626

15,540,178

 Accumulated depreciation 

(3,825,482)

(3,409,833)

 Property and equipment, net 

12,812,144

12,130,345

 Other assets 

343,770

305,202

 Total assets 

$         14,460,406

$      13,495,159

 LIABILITIES AND  EQUITY 

 Current liabilities 

 Accounts payable 

$              298,363

$           436,006

 Accrued payroll and related costs 

145,595

117,907

 Dividend payable 

99,582

-

 Other current liabilities 

298,669

273,267

 Total current liabilities 

842,209

827,180

 Long-term debt 

4,639,429

4,071,964

 Deferred income taxes 

235,851

242,791

 Other liabilities 

353,595

255,372

 Total liabilities 

6,071,084

5,397,307

 Commitments and contingencies 

 Equity 

 Total shareholders' equity 

7,631,060

7,406,521

 Noncontrolling interests 

758,262

691,331

 Total equity 

8,389,322

8,097,852

 Total liabilities and equity 

$         14,460,406

$      13,495,159

 

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 (Unaudited) 

Nine Months Ended

September 30,

2012

2011

 Cash flows from operating activities 

 Net income 

$            421,698

$            244,185

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

 Depreciation and amortization 

549,779

487,454

 (Gain) on contract extinguishments/ loss asset impairment, net 

18,345

(21,202)

 Other changes in operating activities 

(58,318)

(251,407)

 Net cash from operating activities 

931,504

459,030

 Cash flows from investing activities 

 New construction 

(440,520)

(1,280,577)

 Other capital expenditures 

(582,644)

(464,861)

 Drilling equipment replacement and upgrades 

(115,755)

(138,914)

 Capitalized interest 

(108,220)

(88,220)

 Other investing activities 

(195,044)

(30,140)

 Net cash from investing activities 

(1,442,183)

(2,002,712)

 Cash flows from financing activities 

 Borrowings on bank credit facilities, net 

(630,000)

675,000

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

1,186,636

1,087,833

 Contributions from joint venture partners 

40,000

481,000

 Payments of joint venture debt 

-

(693,494)

 Settlement of interest rate swaps 

-

(29,032)

 Par value reduction payments/dividends paid 

(105,092)

(114,453)

 Other financing activities 

(1,594)

(4,028)

 Net cash from financing activities 

489,950

1,402,826

 Net change in cash and cash equivalents 

(20,729)

(140,856)

 Cash and cash equivalents, beginning of period 

239,196

337,871

 Cash and cash equivalents, end of period 

$            218,467

$            197,015

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT 

 (In thousands, except operating statistics) 

 (Unaudited) 

Three Months Ended September 30,

Three Months Ended June 30,

2012

2011

2012

Contract

Contract

Contract

Drilling

Drilling

Drilling

Services

Other

Total

Services

Other

Total

Services

Other

Total

 Operating revenues 

 Contract drilling services 

$   833,212

$             -

$    833,212

$    704,892

$              -

$    704,892

$    848,237

$           -

$    848,237

 Reimbursables 

27,087

1,050

28,137

14,646

2,792

17,438

30,124

688

30,812

 Labor contract drilling services 

-

22,667

22,667

-

15,564

15,564

-

19,863

19,863

 Other 

16

-

16

8

-

8

11

-

11

$   860,315

$   23,717

$    884,032

$    719,546

$    18,356

$    737,902

$    878,372

$  20,551

$    898,923

 Operating costs and expenses 

 Contract drilling services 

$   449,125

$             -

$    449,125

$    358,547

$              -

$    358,547

$    423,502

$           -

$    423,502

 Reimbursables 

20,039

1,008

21,047

11,362

2,609

13,971

24,307

663

24,970

 Labor contract drilling services 

-

12,991

12,991

-

8,053

8,053

-

11,847

11,847

 Depreciation and amortization 

191,638

3,449

195,087

162,837

3,376

166,213

180,112

3,503

183,615

 Selling, general and administrative 

26,228

630

26,858

27,212

324

27,536

24,835

569

25,404

 Loss on impairment 

-

-

-

-

-

-

12,710

5,635

18,345

 Gain on contract settlements/extinguishments, net 

-

-

-

-

-

-

(33,255)

-

(33,255)

$   687,030

$   18,078

$    705,108

$    559,958

$    14,362

$    574,320

$    632,211

$  22,217

$    654,428

 Operating income 

$   173,285

$     5,639

$    178,924

$    159,588

$      3,994

$    163,582

$    246,161

$  (1,666)

$    244,495

 Operating statistics 

 Jackups: 

 Average Rig Utilization 

83%

82%

79%

 Operating Days 

3,285

3,229

3,073

 Average Dayrate 

$     97,857

$      89,352

$      97,612

 Semisubmersibles: 

 Average Rig Utilization 

83%

84%

88%

 Operating Days 

1,067

1,086

1,127

 Average Dayrate 

$   331,900

$    315,034

$    349,163

 Drillships: 

 Average Rig Utilization 

73%

60%

65%

 Operating Days 

590

329

469

 Average Dayrate 

$   267,166

$    225,669

$    329,761

 FPSO/Submersibles: 

 Average Rig Utilization 

0%

0%

0%

 Operating Days 

-

-

-

 Average Dayrate 

$            -

$              -

$              -

 Total: 

 Average Rig Utilization 

78%

76%

76%

 Operating Days 

4,942

4,644

4,669

 Average Dayrate 

$   168,608

$    151,782

$    181,663

 

 

 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 

 Nine months ended 

September 30,

September 30,

2012

2011

2012

2011

 Allocation of net income 

 Basic 

 Net income attributable to Noble Corporation 

$    114,774

$    135,317

$    394,767

$    243,895

 Earnings allocated to unvested share-based payment awards 

(1,192)

(1,415)

(4,008)

(2,487)

 Net income to common shareholders - basic 

$    113,582

$    133,902

$    390,759

$    241,408

 Diluted 

 Net income attributable to Noble Corporation 

$    114,774

$    135,317

$    394,767

$    243,895

 Earnings allocated to unvested share-based payment awards 

(1,190)

(1,412)

(4,002)

(2,481)

 Net income to common shareholders - diluted 

$    113,584

$    133,905

$    390,765

$    241,414

 Weighted average number of  shares outstanding - basic 

252,657

251,580

252,339

251,327

 Incremental shares issuable from assumed exercise of stock options 

317

449

358

640

 Weighted average number of  shares outstanding - diluted 

252,974

252,029

252,697

251,967

 Weighted average unvested share-based payment awards 

2,651

2,658

2,588

2,589

 Earnings per share 

 Basic 

$          0.45

$          0.53

$          1.55

$          0.96

 Diluted 

$          0.45

$          0.53

$          1.55

$          0.96

 

SOURCE Noble Corporation



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