2014

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

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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