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Northern Offshore Reports Third Quarter and Nine Month 2009 Financial Results
HOUSTON, Nov. 18 /PRNewswire-FirstCall/ -- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) reported net income for the three months ended September 30, 2009 of US$31.2 million, or US$0.20 per diluted share. This compares to net income of US$15.5 million, or US$0.10 per diluted share for the third quarter of 2008. The prior-year quarter included a US$3.0 million after-tax charge associated with a terminated transaction. Excluding that charge, the company would have reported net income of US$18.5 million or US$0.12 per diluted share in the 2008 quarter. Revenues for the third quarter of 2009 were US$80.1 million compared to US$76.9 million for the third quarter of 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080415/LATU540LOGO)
For the nine months ended September 30, 2009, net income was US$57.7 million or US$0.38 per diluted share. Net income for the first quarter of 2009 included a US$3.7 million charge to bad debt expense. Excluding that charge, net income for the first nine months of 2009 would have been US$61.4 million, or US$0.40 per diluted share. For the same period in the prior year, net income was US$47.5 million or US$0.31 per diluted share. Excluding the US$3.0 million charge discussed above, the company would have reported net income of US$50.5 million or US$0.33 per diluted share for the first nine months of 2008. Revenues for the first nine months of 2009 were US$210.0 million compared to US$202.7 million for the same period in 2008.
Third Quarter Analysis
Revenues for the three months ended September 30, 2009 were approximately US$3.2 million higher than in the same period of 2008. Third quarter 2009 results included revenue from the drillship Energy Searcher which had been idle in the third quarter of the previous year, as well as tariff revenue from the floating production facility Northern Producer which was undergoing shipyard upgrades in 2008. This revenue growth was offset by lower utilization of the jackup Energy Exerter, which was idle during the 2009 third quarter, and lower dayrates for the Energy Enhancer and Energy Endeavour.
Drilling and production expenses for the third quarter of 2009 were approximately US$4.5 million lower than in the same period in 2008 primarily due to lower utilization of the jackup fleet in the 2009 quarter. Depreciation expense decreased as compared to the prior-year quarter due to an extension of the remaining useful life of the Northern Producer. Amortization of drilling contract intangibles decreased US$1.6 million to US$1.9 million in the current year quarter from the same period last year due to completion of the jackup Energy Exerter and jackup Energy Enhancer contracts with Maersk Olie og Gas AS during 2008. General & Administrative expenses were approximately the same as in the prior-year quarter, excluding the US$3.0 million charge associated with a terminated transaction in the third quarter of 2008. Interest expense decreased US$3.4 million from US$5.6 million in the prior-year quarter primarily due to reduction of the principal balance under the Secured Term Loan Facility and lower interest rates.
Conference Call Information
Northern Offshore, Ltd will conduct a teleconference with security analysts at 9 a.m. CST, November 19, 2009 to discuss the company's quarterly financial results. Individuals wishing to participate in the teleconference should call 866.804.6921 (in the U.S.) or 857.350.1667 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 30602370.
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 production and drilling vessels deployed around the world. The company's fleet consists of one floating production facility and five drilling units (a drillship, a semisubmersible and three jackup drilling rigs). The Northern Offshore fleet operates in various markets including the North Sea, the Indian Ocean, offshore Russia, the Mediterranean Sea and Southeast Asia. More information on Northern Offshore, Ltd. may be found by visiting the company's website at http://www.northernoffshorelimited.com.
For further information, please contact:
Brian Hefty at 1-713-739-7686, or via email at
brian.hefty@northernoffshoreltd.com
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Nine
Months Ended Months Ended
September 30, September 30,
--------------- --------------
(Thousands of US
Dollars, except per
share amounts) Q2 2009 2009 2008 2009 2008
Revenue 73,352 80,086 76,888 209,991 202,677
Operating expenses:
Drilling and
production (28,934) (30,699) (35,177) (88,627) (97,016)
Depreciation (16,225) (14,515) (15,849) (46,513) (45,995)
General &
administrative (2,299) (1,987) (5,015) (6,017) (8,305)
Bad debt (233) 57 - (3,840) (251)
-------- ---- --- --- ------ ----
Total operating expenses (47,691) (47,144) (56,041) (144,997) (151,567)
------------------------ ------- ------- ------- -------- --------
Operating income 25,661 32,942 20,847 64,994 51,110
---------------- ------ ------ ------ ------ ------
Interest income 112 48 294 250 946
Interest expense (2,718) (2,280) (5,642) (8,248) (17,504)
Amortization of
drilling contract
intangibles 2,018 1,850 3,447 5,887 19,928
Amortization of
deferred financing
fees (397) (397) (397) (1,190) (1,190)
Other financial items 409 1,206 (538) 850 (1,267)
--------------------- --- ----- ---- --- ------
Total other income/
(expense), net (576) 427 (2,836) (2,451) 913
------------------- ---- --- ------ ------ ---
Income before taxes 25,085 33,369 18,011 62,543 52,023
------------------- ------ ------ ------ ------ ------
Income taxes -
(expense)/benefit (2,293) (2,124) (2,515) (4,886) (4,502)
------------------ ------ ------ ------ ------ ------
Net income 22,792 31,245 15,496 57,657 47,521
---------- ------ ------ ------ ------ ------
Earnings per share (US$)
Basic 0.15 0.20 0.10 0.38 0.31
Diluted 0.15 0.20 0.10 0.38 0.31
Weighted average common
shares (000's)
Basic 153,108 153,108 153,100 153,105 153,100
Diluted 153,265 153,978 153,101 153,448 153,100
Note: Certain amounts from prior periods have been reclassified to
conform to the current period presentation. The primary
reclassifications relate to: 1) some shorebase expenses are now included
in drilling and production expenses rather than general and
administrative, 2) reimbursable revenue and expenses are now reported
separately rather than net and 3) bad debt expense is reported separately
rather than with drilling and production expenses.
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
(Thousands of US Dollars) 2009 2008
Current assets
Cash and cash equivalents 88,947 58,759
Restricted cash 8,260 8,077
Account receivables, net 40,966 48,797
Prepaid expenses 11,150 17,202
Deferred financing fees 858 1,586
Deferred mobilization costs 623 566
---------------------------- --- ---
Total current assets 150,804 134,987
-------------------- ------- -------
Non-current assets
Property, plant & equipment, net 510,049 545,731
Restricted cash, net of current
portion 6,438 6,438
Deferred mobilization cost, net of
current portion 524 847
Deferred income tax assets - 645
Deferred financing fees, net of
current portion - 461
Total non-current Assets 517,011 554,122
------------------------ ------- -------
Total assets 667,815 689,109
------------ ------- -------
Current liabilities
Accounts payable 10,030 19,975
Accrued expenses 25,538 5,215
Income tax payable 8,240 8,969
Current portion of debt 220,000 90,000
Deferred revenue 18,703 24,284
Current portion of drilling contract
intangibles - 5,887
------------------------------------ --- -----
Total current liabilities 282,511 154,330
------------------------- ------- -------
Non-current liabilities
Long-term debt, net of current portion - 197,500
Deferred revenue, net of current
portion 2,563 997
Other long-term liabilities 9,059 21,290
---------------------------- ----- ------
Total non-current liabilities 11,622 219,787
----------------------------- ------ -------
Total liabilities 294,133 374,117
------------------ ------- -------
Shareholders' equity
Share capital 38,767 38,281
Additional paid-in capital 165,407 164,860
Accumulated other comprehensive loss (6,691) (6,691)
Retained earnings 176,199 118,542
----------------- ------- -------
Total shareholders' equity 373,682 314,992
-------------------------- ------- -------
Total liabilities and shareholders'
equity 667,815 689,109
----------------------------------- ------- -------
Accounts receivable related accounts which were previously included in
other current assets are currently reported together with trade
receivables under Accounts Receivable, net. In addition, accounts
payable related accounts previously classified as accrued expenses are
now reported together with trade payables as Accounts Payable.
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Statement of Cash Flows - (Unaudited)
Nine months ended
September 30,
-----------------
(Thousands of US Dollars) 2009 2008
Cash flows from operating activities
Net income 57,657 47,521
Adjustments to reconcile net income to net cash
provided by operating activities:
Bad debt expense 3,840 -
Stock-based compensation 1,033 1,351
Depreciation 46,513 45,995
Amortization of drilling contract intangibles (5,887) (19,928)
Amortization of deferred financing fees 1,190 1,191
Realized gain on foreign currency (652) -
Interest, net (362) 1,424
---- -----
Changes in operating assets and working capital
(Increase) decrease in accounts receivable 5,519 (34,779)
Decrease in prepaid
expenses 6,310 819
(Increase) decrease in deferred tax assets (73) 115
Increase (decrease) in accounts payable (6,134) 23,442
Increase in other accrued liabilities 4,666 2,535
Increase (decrease) in deferred revenue (4,015) 2,321
Current income taxes (936) 2,319
Other, net - 778
Net cash provided by operating activities 108,669 75,104
----------------------------------------- ------- ------
Cash flows from investing activities
Capital expenditures (10,993) (35,739)
Release of restricted cash - 21,500
Funding of restricted cash (150) -
Proceeds from sale of equipment 188 -
------------------------------- --- ---
Net cash provided by/ (used in) investing
activities (10,955) (14,239)
------------------------------------------ ------- -------
Cash flows from financing activities
Proceeds from commercial paper - 21,764
Principal payment of bank term loan (67,500) (67,500)
Net cash used in financing activities (67,500) (45,736)
------------------------------------- ------- -------
Net increase/(decrease) in cash and cash
equivalents 30,214 15,129
Cash and cash equivalents at beginning of
period 58,759 21,690
Effects of exchange rate changes on cash and
cash equivalents (26) (24)
--- ---
Cash and cash equivalents at end of period 88,947 36,795
------ ------
Supplemental disclosure of cash flow information
Cash paid during the period for:
Income taxes 4,715 2,203
Interest 8,328 15,064
Note: Certain categories from prior periods are reported separately on
the cash flow statement to conform with current year presentation. Such
categories include prepaid expenses, other accrued liabilities and other
long-term liabilities.
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Unaudited)
Accumulated
(Thousands other
of Common Additional comprehensive
US shares Share paid-in gain / Retained
Dollars) ('000) capital capital (loss) earnings Total
Balance at
January 1,
2008 153,100 38,275 163,174 (6,068) 54,462 249,843
------- ------ ------- ------ ------ -------
Net income 64,080 64,080
Issuance of
restricted
stock 24 6 (6) - - -
Stock-based
compensation - - 1,692 - - 1,692
Other
comprehensive
loss - - - (623) - (623)
--- --- --- ---- --- ----
Balance at
December 31,
2008 153,124 38,281 164,860 (6,691) 118,542 314,992
------- ------ ------- ------ ------- -------
Net income 57,657 57,657
Issuance of
restricted
stock 1,944 486 (486) -
Stock-based
compensation 1,033 1,033
----- -----
Balance at
September 30,
2009 155,068 38,767 165,407 (6,691) 176,199 373,682
------- ------ ------- ------ ------- -------
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------ -------------
(Thousands of US Dollars) 2009 2008 2009 2008
Net income 31,245 15,496 57,657 47,521
Currency translation adjustment - 215 - 187
------ ------ ------ ------
Total other comprehensive income 31,245 15,711 57,657 47,708
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Results
(Unaudited)
Three Months
Ended Nine Months Ended
September 30, September 30,
--------------- ---------------
(Thousands of US Dollars) Q2 2009 2009 2008 2009 2008
Net Income (GAAP) 22,792 31,245 15,496 57,657 47,521
Add Back:
Net interest expense 3,003 2,629 5,745 9,188 17,748
Income taxes 2,293 2,124 2,515 4,886 4,502
Depreciation 16,225 14,515 15,849 46,513 45,995
Amortization (2,018) (1,850) (3,447) (5,887) (19,928)
---------------- ------ ------ ------ ------- ------
EBITDA (Non-GAAP) 42,295 48,663 36,158 112,357 95,838
----------------- ------ ------ ------ ------- ------
EBITDA is defined as Net Income before Interest, Taxes, Depreciation and
Amortization.
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Operating Statistics
(Unaudited)
Three Nine
Months Ended Months Ended
September 30, September 30,
--------------- ---------------
Q2 2009 2009 2008 2009 2008
Jackups (3)
Average rig
utilization 94% 73% 100% 84% 97%
Operating days 256 201 276 690 793
Average revenue per
day 145,419 109,958 201,406 139,067 176,395
Drillship (1)
Average rig
utilization 48% 100% 0% 50% 62%
Operating days 43 92 - 135 170
Average revenue per
day 261,331 333,541 - 310,416 228,357
Semisubmersible (1)
Average rig
utilization 100% 100% 89% 100% 30%
Operating days 91 92 82 273 82
Average revenue per
day 229,426 212,049 226,560 217,321 226,560
Total Drilling Rigs
Average rig
utilization 86% 84% 78% 80% 76%
Operating days 390 385 358 1,098 1,045
Average revenue per
day 177,902 187,801 209,451 179,644 188,777
Floating Production
Facility (1)
Days in period 91 92 92 273 274
Production days 64 92 - 156 -
Average bpd 8,999 15,039 - 12,561 -
Average tariff
revenue per day 37,294 68,776 - 55,861 -
Average other
revenue per day 17,374 15,607 20,700 14,608 25,436
Total average
revenue per day 43,608 84,383 20,700 46,528 25,436
Note 1: Operating days represent actual days under contract.
Note 2: Northern Producer contract commenced March 1, 2008 with first oil
on April 28, 2009. Average tariff per day is calculated
based on number days in the period from commencement of first oil.
From April 1 to April 27 the company received contractual dayrate
of US$30,000 per day.
SOURCE Northern Offshore, Ltd.
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