Northern Offshore Reports Fourth Quarter and Preliminary Full Year 2011 Results
HOUSTON, Feb. 22, 2012 /PRNewswire/ --
Highlights
- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported a net loss for the three months ended December 31, 2011 of US$10.7 million, or US$0.07 per diluted share, on revenues of US$33.9 million.
- For the full year ended December 31, 2011, the net loss was US$3.4 million or US$0.02 per diluted share.
- The company's directors have declared a dividend of US$0.03 per share, or approximately US$5.0 million.
Management Comment
Gary W. Casswell, Northern Offshore's president and CEO, commented, "The fourth quarter of 2011 was a challenging transitional period for Northern Offshore. While we are extremely pleased to have added significant contract backlog for our fleet during the last half of 2011, the timing of several of our rigs rolling off contract and the associated costs and idle time incurred to prepare these rigs for new contracts significantly impacted our fourth quarter results. However, looking forward, as we commence these new contracts during the first and second quarters of 2012, we fully expect these units to deliver improved cash flow in 2012 and positively impact our earnings per share".
Fourth Quarter and Year End Analysis
The net loss for the three months ended December 31, 2011 of US$10.7 million, or US$0.07 per diluted share, on revenues of US$33.9 million compares to a net loss of US$186.9 million, or US$1.21 per diluted share, for the fourth quarter of 2010, on revenues of US$69.0 million. The financial results for the prior-year fourth quarter included an after-tax, non-cash charge of US$205.4 million, due to a valuation impairment of the jackup fleet. Excluding the impairment charge, fourth quarter 2010 net income would have been US$18.4 million.
The full year ended December 31, 2011 net loss of US$3.4 million, or US$0.02 per diluted share, compares to a 2010 net income of US$68.6 million, or US$0.44 per diluted share, excluding the above impairment charge and a US$4.4 million maintenance charge for the floating production facility Northern Producer taken in the third quarter of 2010. Revenues in 2011 were US$161.1 million, as compared to US$257.5 million reported in 2010.
Revenues for the three months ended December 31, 2011 were US$35.1 million lower than the same period of 2010, primarily due to a decrease in the semisubmersible Energy Driller's revenues as the rig completed its three-year contract with Oil and Natural Gas Corporation Limited ("ONGC"); a decrease in revenues for the drillship Energy Searcher from the current-year contract with China National Offshore Oil Corporation ("CNOOC") as compared to the prior-year contract with Vietgazprom; and a decrease in tariff revenues from the floating production facility Northern Producer primarily due to lower production. Also, the company experienced a decline in revenue as compared to the prior-year quarter due to the conclusion of the management services contract with Caspian Drilling Company Ltd. ("CDC") during 2011. Partially offsetting these revenue decreases was an increase in dayrate revenues due to higher utilization for the jackups Energy Endeavour and Energy Enhancer compared to the same period last year.
The tariff from the floating production facility Northern Producer averaged approximately US$130,000 per day in fourth quarter of 2011. The company expects pricing levels to remain stable and production to decline slightly in the near term.
Drilling and production expenses for the three months ended December 31, 2011 were US$10.8 million higher than the same period of last year primarily due to an increase in operating expenses related to the inspection and contractual maintenance costs for the semisubmersible Energy Driller in preparation for its new contract with ONGC; an increase in operating expenses related to higher utilization for the jackups Energy Enhancer and Energy Endeavour; and an increase in operating expenses related to the CNOOC contract preparation costs for the drillship Energy Searcher.
Depreciation expense for the three months ended December 31, 2011 was US$5.5 million lower than the same period in 2010 due to the US$205.4 million impairment charge taken against the jackup fleet in December 2010 that decreased the depreciable basis of the fleet going forward.
Fourth quarter 2011 general and administrative expenses, interest income and expense, amortization of financing fees and other financial items were comparable to those of the same period in 2010.
As of February 21, 2012, the company has an outstanding Revolving Credit Facility balance of US$55.4 million, a cash balance of US$29.2 million and a net debt position of US$26.2 million. The Revolving Credit Facility balance at year-end 2011 was US$45.4 million, up US$2.4 million from the fourth quarter of 2010. Cash at year-end 2011 was US$23.6 million, of which US$10.6 million was unrestricted, leaving the company in a net debt position of US$21.8 million as of December 31, 2011.
The information contained in this press release is preliminary and is subject to change until the release of the 2011 audit accounts as approved by the Board of Directors.
Subsequent Events
- On February 8, 2012, the semisubmersible Energy Driller commenced its mobilization to the west coast of India for a new three-year contract with ONGC.
- Following completion of its one-well contract with CNOOC in Indonesia, the drillship Energy Searcher is in route to Singapore to undergo short, planned maintenance and upgrades to prepare for a new four-well contract with Vietgazprom offshore Vietnam.
- Following the completion of its contract with Perenco in the UK southern North Sea, the jackup Energy Enhancer arrived in Esjberg, Denmark for planned maintenance and to prepare of a new one-year contract for Maersk Oil and Gas offshore Denmark.
- The jackup Energy Exerter was relocated from its stacking location offshore Malta to Rotterdam. The future strategy for this unit is presently under consideration by the Board of Directors.
- The company's directors have declared a dividend of US$0.03 per share, or approximately US$5.0 million. Shareholders of record with the VPS on February 29, 2012 will be entitled to receive the dividend, which will be paid on or around March 15, 2012. The shares of the company will be trading ex-dividend from February 27, 2012.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, February 23, 2012 to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call (866) 700-0133 (in the U.S.) or (617) 213-8831 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 49713644.
The conference call also will be accessible by logging on to the company's website at http://www.northernoffshorelimited.com. After logging on, go to "Investor Relations" and select the conference call webcast.
About the Company
Northern Offshore, Ltd. is a Bermuda holding company which operates offshore oil and gas drilling units and one production vessel in various markets around the world, including the North Sea, the Indian Ocean, the Mediterranean Sea and Southeast Asia. The company's fleet consists of five drilling units (a drillship, a semisubmersible and three jackup drilling rigs) and one floating production facility. More information on Northern Offshore, Ltd. may be found by visiting the company's website at http://www.northernoffshorelimited.com.
This announcement contains statements that reflect the company's expectations or predictions of the future. These statements are forward-looking statements. These forward-looking statements may include statements regarding earnings guidance, capital allocation strategy, the impact of activity levels, business performance, and other market and industry conditions. The company's actual results could differ materially from those reflected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the company's regulatory filings. The company disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.
For further information, please contact:
Brian Hefty at (713) 739-7686,
or via email at [email protected]
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||||
Consolidated Statements of Operations |
|||||||
(Unaudited) |
|||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||
(Thousands of US Dollars, except per share amounts) |
Q3 2011 |
2011 |
2010 |
2011 |
2010 |
||
Revenues |
36,806 |
33,938 |
69,020 |
161,121 |
257,488 |
||
Operating expenses: |
|||||||
Drilling and production |
(27,229) |
(36,280) |
(25,523) |
(116,322) |
(104,680) |
||
Depreciation |
(8,907) |
(9,141) |
(14,675) |
(34,167) |
(58,110) |
||
General & administrative |
(1,465) |
(1,043) |
(1,078) |
(5,798) |
(7,213) |
||
Impairment loss on fixed assets |
- |
- |
(205,361) |
- |
(205,361) |
||
Total operating expenses |
(37,601) |
(46,464) |
(246,637) |
(156,287) |
(375,364) |
||
Operating income/(loss) |
(795) |
(12,526) |
(177,617) |
4,834 |
(117,876) |
||
Interest income |
9 |
6 |
14 |
28 |
90 |
||
Interest expense |
(367) |
(596) |
(1,000) |
(2,050) |
(6,326) |
||
Amortization of deferred financing fees |
(115) |
(144) |
(768) |
(2,593) |
(2,573) |
||
Other financial items |
(195) |
(811) |
(292) |
(1,409) |
(560) |
||
Total other income/(expense), net |
(668) |
(1,545) |
(2,046) |
(6,024) |
(9,369) |
||
Loss before taxes |
(1,463) |
(14,071) |
(179,663) |
(1,190) |
(127,245) |
||
Income taxes - benefit/(expense) |
1,720 |
3,409 |
(7,261) |
(2,195) |
(13,886) |
||
Net income/(loss) |
257 |
(10,662) |
(186,924) |
(3,385) |
(141,131) |
||
Earnings per share (US$) |
|||||||
Basic |
0.00 |
(0.07) |
(1.21) |
(0.02) |
(0.91) |
||
Diluted |
0.00 |
(0.07) |
(1.21) |
(0.02) |
(0.91) |
||
Weighted average common shares (000’s) |
|||||||
Basic |
155,098 |
155,220 |
154,474 |
155,018 |
154,358 |
||
Diluted |
155,098 |
155,220 |
154,474 |
155,018 |
154,358 |
||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||
Consolidated Balance Sheets |
|||
(Unaudited) |
|||
(Thousands of US Dollars) |
December 31, 2011 |
December 31, 2010 |
|
Current assets |
|||
Cash and cash equivalents |
10,601 |
12,587 |
|
Restricted cash |
7,604 |
6,445 |
|
Account receivables, net |
36,649 |
55,686 |
|
Prepaid expenses |
3,905 |
4,785 |
|
Deferred financing fees |
534 |
2,279 |
|
Deferred mobilization costs |
246 |
281 |
|
Deferred income taxes |
286 |
- |
|
Other current assets |
- |
419 |
|
Total current assets |
59,825 |
82,482 |
|
Noncurrent assets |
|||
Property, plant & equipment, net |
253,740 |
252,397 |
|
Restricted cash, net of current portion |
5,436 |
- |
|
Deferred financing fees, net of current portion |
224 |
- |
|
Other noncurrent assets |
4,967 |
1,677 |
|
Total noncurrent assets |
264,367 |
254,074 |
|
Total assets |
324,192 |
336,556 |
|
Current liabilities |
|||
Accounts payable |
27,435 |
17,528 |
|
Accrued expenses |
7,289 |
18,616 |
|
Income tax payable |
2,926 |
3,429 |
|
Current debt |
45,436 |
43,000 |
|
Deferred revenue |
4,813 |
2,396 |
|
Total current liabilities |
87,899 |
84,969 |
|
Total liabilities |
87,899 |
84,969 |
|
Shareholders' equity |
|||
Share capital |
39,546 |
39,176 |
|
Additional paid-in capital |
168,583 |
166,632 |
|
Accumulated other comprehensive loss |
(6,691) |
(6,691) |
|
Retained earnings |
34,855 |
52,470 |
|
Total shareholders' equity |
236,293 |
251,587 |
|
Total liabilities and shareholders' equity |
324,192 |
336,556 |
|
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||
Consolidated Statements of Cash Flows - (Unaudited) |
||||
Twelve months ended December 31, |
||||
(Thousands of US Dollars) |
2011 |
2010 |
||
Cash flows from operating activities |
||||
Net loss |
(3,385) |
(141,131) |
||
Adjustments to reconcile net loss to net cash |
||||
provided by operating activities: |
||||
Stock-based compensation |
2,756 |
1,672 |
||
Depreciation |
34,167 |
58,110 |
||
Impairment loss on fixed assets |
- |
205,361 |
||
Amortization of deferred financing fees |
2,593 |
2,573 |
||
Loss on disposal of rig assets |
1,701 |
- |
||
Changes in operating assets and working capital |
||||
Accounts receivable |
19,091 |
(6,492) |
||
Prepaid expenses |
880 |
1,312 |
||
Deferred income taxes |
(286) |
- |
||
Other current and noncurrent assets |
(2,871) |
(1,996) |
||
Accounts payable |
5,058 |
(9,160) |
||
Other accrued liabilities |
(11,327) |
(11,668) |
||
Deferred revenue |
2,417 |
(2,076) |
||
Income tax payable |
(503) |
(333) |
||
Other, net |
33 |
374 |
||
Net cash provided by operating activities |
50,324 |
96,546 |
||
Cash flows from investing activities |
||||
Capital expenditures |
(32,416) |
(13,246) |
||
Changes in restricted cash, net |
(6,593) |
9,394 |
||
Net cash used in investing activities |
(39,009) |
(3,852) |
||
Cash flows from financing activities |
||||
Proceeds from drawdown of new revolver facility |
45,436 |
- |
||
Proceeds from drawdown of former revolver facility |
7,000 |
100,000 |
||
Principal payment on revolver |
(50,000) |
(57,000) |
||
Payoff of bond loan |
- |
(100,000) |
||
Principal payment of bank term loan |
- |
(97,500) |
||
Debt issuance costs |
(1,072) |
(4,326) |
||
Payment for taxes on vested shares |
(435) |
(443) |
||
Dividends paid |
(14,230) |
- |
||
Net cash used in financing activities |
(13,301) |
(159,269) |
||
Net decrease in cash and cash equivalents |
(1,986) |
(66,575) |
||
Cash and cash equivalents at beginning of period |
12,587 |
79,162 |
||
Cash and cash equivalents at end of period |
10,601 |
12,587 |
||
Supplemental disclosure of cash flow information |
||||
Cash paid during the period for: |
||||
Income taxes |
2,505 |
2,946 |
||
Interest |
734 |
4,987 |
||
Significant non-cash transactions during the period for: |
||||
Accrued capital expenditures |
4,849 |
3,000 |
||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||||
Consolidated Statements of Shareholders’ Equity |
|||||||
(Unaudited) |
|||||||
Accumulated |
|||||||
Common |
Additional |
other |
|||||
shares |
Share |
paid-in |
comprehensive |
Retained |
|||
(Thousands of US Dollars) |
('000) |
capital |
capital |
loss |
earnings |
Total |
|
Balance at January 1, 2010 |
155,320 |
38,829 |
165,750 |
(6,691) |
193,601 |
391,489 |
|
Net loss |
- |
- |
- |
- |
(141,131) |
(141,131) |
|
Issuance of restricted stock |
1,388 |
347 |
(347) |
- |
- |
- |
|
Payments for taxes on vested shares |
- |
- |
(443) |
- |
- |
(443) |
|
Stock-based compensation |
- |
- |
1,672 |
- |
- |
1,672 |
|
Balance at December 31, 2010 |
156,708 |
39,176 |
166,632 |
(6,691) |
52,470 |
251,587 |
|
Net loss |
- |
- |
- |
- |
(3,385) |
(3,385) |
|
Issuance of restricted stock |
1,476 |
370 |
(370) |
- |
- |
- |
|
Payments for taxes on vested shares |
- |
- |
(435) |
- |
- |
(435) |
|
Stock-based compensation |
- |
- |
2,756 |
- |
- |
2,756 |
|
Common shares dividends |
- |
- |
- |
- |
(14,230) |
(14,230) |
|
Balance at December 31, 2011 |
158,184 |
39,546 |
168,583 |
(6,691) |
34,855 |
236,293 |
|
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||||
Reconciliation of GAAP to Non-GAAP Financial Results |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
December 31, |
December 31, |
||||||
(Thousands of US Dollars) |
Q3 2011 |
2011 |
2010 |
2011 |
2010 |
||
Net income/(loss) (GAAP) |
257 |
(10,662) |
(186,924) |
(3,385) |
(141,131) |
||
Add Back: |
|||||||
Net interest expense |
473 |
734 |
1,754 |
4,615 |
8,809 |
||
Income taxes |
(1,720) |
(3,409) |
7,261 |
2,195 |
13,886 |
||
Depreciation |
8,907 |
9,141 |
14,675 |
34,167 |
58,110 |
||
Impairment loss |
- |
- |
205,361 |
- |
205,361 |
||
Adjusted EBITDA (Non-GAAP) |
7,917 |
(4,196) |
42,127 |
37,592 |
145,035 |
||
Adjusted EBITDA is defined as Net Income/(loss) before Interest, Taxes, Depreciation and Impairment Loss. |
|||||||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||||
Operating Statistics |
||||||||
(Unaudited) |
||||||||
Three Months Ended |
Twelve Months Ended |
|||||||
December 31, |
December 31, |
|||||||
Q3 2011 |
2011 |
2010 |
2011 |
2010 |
||||
Jackups (3) |
||||||||
Average rig utilization |
67% |
67% |
21% |
52% |
25% |
|||
Operating days |
184 |
184 |
59 |
567 |
272 |
|||
Average revenue per day |
72,196 |
69,695 |
72,300 |
69,886 |
75,730 |
|||
Drillship (1) |
||||||||
Average rig utilization |
0% |
58% |
67% |
15% |
92% |
|||
Operating days |
0 |
53 |
62 |
53 |
335 |
|||
Average revenue per day |
0 |
105,306 |
400,676 |
225,101 |
283,193 |
|||
Semisubmersible (1) |
||||||||
Average rig utilization |
67% |
0% |
100% |
67% |
100% |
|||
Operating days |
62 |
0 |
92 |
243 |
365 |
|||
Average revenue per day |
167,638 |
0 |
225,776 |
208,955 |
226,371 |
|||
Total Drilling Rigs (5) |
||||||||
Average rig utilization |
54% |
52% |
46% |
47% |
53% |
|||
Operating days |
246 |
237 |
213 |
863 |
972 |
|||
Average revenue per day |
96,251 |
94,988 |
234,174 |
118,577 |
203,800 |
|||
Floating Production Facility (1) |
||||||||
Days in period |
92 |
92 |
92 |
365 |
365 |
|||
Production days |
92 |
92 |
92 |
365 |
365 |
|||
Average bpd |
20,963 |
21,653 |
28,816 |
23,648 |
22,361 |
|||
Average tariff revenue per day |
125,780 |
129,921 |
166,374 |
141,889 |
120,100 |
|||
Average other revenue per day |
5,520 |
(5,190) |
8,099 |
1,396 |
8,461 |
|||
Total average revenue per day |
131,300 |
124,731 |
174,473 |
143,285 |
128,561 |
|||
Note 1: Operating days represent actual days under contract. |
||||||||
Note 2: The provision of rig management services for two semisubmersibles in the Caspian Sea ended on July 31, 2011. |
||||||||
Note 3: Costs which are reimbursed by the client are included in the average revenue per day calculation. |
||||||||
SOURCE Northern Offshore
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