2014

Northern Offshore Reports Third Quarter and Nine Month 2012 Financial Results and Declares Dividend

HOUSTON, Nov. 14, 2012 /PRNewswire/ --

Highlights
(All $ in USD)

  • Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended September 30, 2012 of $17.8 million, or $0.12 per diluted share, on revenues of $62.2 million.
  • The company's directors have increased the dividend by 25%, to $0.05 per share, which represents an annualized yield in excess of 11% at yesterday's closing stock price.
  • The Energy Exerter sale transaction closed on October 12, 2012.
  • The company repaid $38.0 million of the outstanding credit facility balance on October 17, 2012.

Management Comment

Gary W. Casswell, Northern Offshore's president and CEO, commented, "We are pleased to report improved profitability to our shareholders this quarter.  The recent sale of the jackup Energy Exerter marks a turning point for our company.  Our strategy going forward is to remain opportunistic with monetizing existing units and use the proceeds to support our high dividend payout and invest in modern assets.  We are currently working with our board of directors in evaluating all of our alternatives to successfully execute this strategy, including the possibility of a spinoff of the Northern Producer."

Third Quarter Analysis

Net income for the three months ended September 30, 2012 was $17.8 million, or $0.12 per diluted share.  This compares to net income of $0.3 million, or $0.00 per diluted share for the third quarter of 2011.  Revenues for the third quarter of 2012 were $62.2 million compared to $36.8 million for the third quarter of 2011.

For the nine months ended September 30, 2012, net income was $6.0 million, or $0.04 per diluted share.  For the same period in the prior year, net income was $7.3 million, or $0.05 per diluted share.  Revenues for the first nine months of 2012 were $134.0 million compared to $127.2 million for the same period in 2011.

Revenues for the three months ended September 30, 2012 were $25.4 million higher when compared to the same period of 2011, primarily due to higher utilization of the drillship Energy Searcher and semisubmersible Energy Driller, and an increase in dayrate revenues for the jackups Energy Endeavour and Energy Enhancer.

The tariff revenues from the Northern Producer averaged approximately $110,000 per day in the third quarter of 2012.  The company expects pricing levels and production to remain stable in the near term.

Third quarter 2012 drilling and production expenses, depreciation, general and administrative expenses, interest income and expense, amortization of deferred financing fees and other financial items were comparable to those of the same period in 2011.  Income taxes were higher in the third quarter of 2012 as compared to the same period in the previous year due to higher taxable income in the 2012 quarter.   

As of November 12, 2012, the company had an outstanding credit facility balance of $32.0 million and a cash balance of $52.7 million.

The company's directors have declared a dividend of $0.05 per share, or approximately $8.0 million.  Shareholders of record with the VPS on November 30, 2012 will be entitled to receive the dividend, which will be paid on or around December 14, 2012.  The shares of the company will be trading ex-dividend from November 28, 2012.

Conference Call Information

Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CST, November 15, 2012 to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call 877-299-4454 (in the U.S.) or 617-597-5447 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 29186511.

The conference call will also 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 and Southeast Asia. The company's fleet consists of four drilling units (a drillship, a semisubmersible and two 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, and 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 brian.hefty@northernoffshoreltd.com

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)









 Three Months Ended

September 30,  

Nine Months Ended

September 30, 

(Thousands of US Dollars, except per share amounts)

Q2 2012

2012

2011

2012

2011

Revenues

43,626

62,173

36,806

134,036

127,183

Operating expenses:






Drilling and production

(28,981)

(26,999)

(27,229)

(91,122)

(80,042)

Depreciation

(9,251)

(8,055)

(8,907)

(26,704)

(25,026)

General & administrative

(1,718)

(1,727)

(1,465)

(5,354)

(4,755)

Total operating expenses

(39,950)

(36,781)

(37,601)

(123,180)

(109,823)

Operating income/(loss)

3,676

25,392

(795)

10,856

17,360

Interest income

2

2

9

6

22

Interest expense

(666)

(749)

(367)

(1,911)

(1,454)

Amortization of deferred financing fees

(127)

(123)

(115)

(389)

(2,448)

Other financial items

179

(295)

(195)

(489)

(598)

Total other income/(expense), net

(612)

(1,165)

(668)

(2,783)

(4,478)

Income/(loss) before taxes

3,064

24,227

(1,463)

8,073

12,882

Income taxes - benefit/(expense)

(719)

(6,383)

1,720

(2,027)

(5,604)

Net income

2,345

17,844

257

6,046

7,278







Earnings per share (US$)






     Basic

0.01

0.12

0.00

0.04

0.05

     Diluted

0.01

0.12

0.00

0.04

0.05

Weighted average common shares (000's)






     Basic

155,891

156,046

155,098

155,875

154,951

     Diluted

155,891

156,046

155,216

155,875

155,373

    

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)




(Thousands of US Dollars)

September 30,

2012

December 31,

2011

Current assets 



Cash and cash equivalents

17,961

10,601

Restricted cash 

9,450

7,604

Accounts receivable, net

35,169

36,649

Prepaid expenses 

3,658

2,083

Deferred mobilization costs 

2,559

246

Deferred insurance premium

3,160

1,822

Assets held for sale

35,932

-

Other current assets

1,725

820

Total current assets

109,614

59,825

Noncurrent assets 



Property, plant & equipment, net

201,000

253,740

Restricted cash, net of current portion 

5,436

5,436

Noncurrent deposit/escrow account

3,624

-

Deferred mobilization costs, net of current portion

1,902

-

Drydock costs, net of current portion

5,693

4,967

Other noncurrent assets 

2,061

224

Total noncurrent assets

219,716

264,367

Total assets

329,330

324,192

Current liabilities



Accounts payable

16,072

27,435

Accrued expenses

6,331

7,289

Income taxes payable

715

2,926

Other payable

4,450

-

Current debt

70,000

45,436

Deferred revenue

3,093

4,813

Total current liabilities

100,661

87,899

Shareholders' equity



Share capital

40,190

39,546

Additional paid-in capital

170,293

168,583

Accumulated other comprehensive loss

(6,691)

(6,691)

Retained earnings

24,877

34,855

Total shareholders' equity

228,669

236,293

Total liabilities and shareholders' equity  

329,330

324,192

    

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Statements of Cash Flows - (Unaudited)






Nine months ended

September 30,

(Thousands of US Dollars)


2012

2011

Cash flows from operating activities




Net income


6,046

7,278

Adjustments to reconcile net income to net cash

  provided by operating activities:




Stock-based compensation 


3,003

1,918

Depreciation


26,704

25,026

Amortization of deferred financing fees


389

2,448

Loss on disposal of rig assets


83

917

Changes in operating assets and working capital




Accounts receivable


1,480

22,999

Prepaid expenses                          


(1,575)

(13)

Deferred mobilization costs


(4,215)

(228)

Other current and noncurrent assets


(4,790)

(907)

Accounts payable


(12,463)

(3,436)

Other payable


4,450

-

Other accrued liabilities


(1,531)

(11,984)

Deferred revenue


(1,720)

(2,296)

Income taxes payable


(2,211)

3,311

Other, net


12

241

Net cash provided by operating activities


13,662

45,274

Cash flows from investing activities




Capital expenditures


(8,891)

(22,691)

Changes in restricted cash


(1,846)

(7,592)

Changes in noncurrent deposit/escrow account


(3,624)

-

Net cash used in investing activities


(14,361)

(30,283)

Cash flows from financing activities




Proceeds from drawdown of revolver facility


24,564

52,436

Principal payments on former revolver facility


-

(50,000)

Debt issuance costs


(405)

(911)

Payment for taxes on vested shares


(649)

(208)

Dividends paid


(15,451)

(9,313)

Net cash provided by/(used in) financing activities


8,059

(7,996)

Net changes in cash and cash equivalents


7,360

6,995

Cash and cash equivalents at beginning of period


10,601

12,587

Cash and cash equivalents at end of period


17,961

19,582





Supplemental disclosure of cash flow information




Cash paid during the period for:




    Income taxes


1,759

1,848

    Interest


1,548

734





Significant non-cash transactions during the period for:




Accrued capital expenditures


1,440

-

Accrued dividends


573

173

    

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

 Consolidated Statements of Shareholders' Equity

(Unaudited)








(Thousands of US Dollars)

Common

shares

('000)

Share

capital

Additional

paid-in

capital

Accumulated

other

comprehensive

loss

Retained

earnings

Total








Balance at December 31, 2010

156,708

39,176

166,632

(6,691)

52,470

251,587








Net income

-

-

-

-

7,278

7,278

Issuance of restricted stock

1,510

378

(378)

-

-

-

Payments for taxes on vested shares

-

-

(208)

-

-

(208)

Stock-based compensation 

-

-

1,918

-

-

1,918

Common shares dividends

-

-

-

-

(9,486)

(9,486)

Balance at September 30, 2011

158,218

39,554

167,964

(6,691)

50,262

251,089








Balance at December 31, 2011

158,184

39,546

168,583

(6,691)

34,855

236,293








Net income

-

-

-

-

6,046

6,046

Issuance of restricted stock

2,577

644

(644)

-

-

-

Payments for taxes on vested shares

-

-

(649)

-

-

(649)

Stock-based compensation 

-

-

3,003

-

-

3,003

Common shares dividends

-

-

-

-

(16,024)

(16,024)

Balance at September 30, 2012

160,761

40,190

170,293

(6,691)

24,877

228,669

    

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 2012

2012

2011

2012

2011







Net income (GAAP)

2,345

17,844

257

6,046

7,278







Add Back:






Net interest expense

791

870

473

2,294

3,880

Income taxes

719

6,383

(1,720)

2,027

5,604

Depreciation

9,251

8,055

8,907

26,704

25,026







EBITDA (Non-GAAP)

13,106

33,152

7,917

37,071

41,788































EBITDA is defined as Net Income/(loss) before Interest, Taxes and Depreciation

    

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Operating Statistics

(Unaudited)











 Three Months Ended 

 Nine Months Ended 




 September 30, 

 September 30, 


Q2 2012


2012

2011

2012

2011








Jackups (3)














Average rig utilization 

33%


67%

67%

46%

47%

Operating days 

91


184

184

381

383

Average revenue per day 

99,996


101,756

72,196

90,686

69,977








Drillship (1)














Average rig utilization 

95%


98%

0%

82%

0%

Operating days

86


90

0

225

0

Average revenue per day 

186,008


186,194

0

201,977

0








Semisubmersible (1)














Average rig utilization 

80%


100%

67%

60%

89%

Operating days

73


92

62

165

243

Average revenue per day

138,877


179,229

167,638

161,376

209,157








Total Drilling Rigs (5)














Average rig utilization 

55%


80%

54%

56%

46%

Operating days 

250


366

246

771

626

Average revenue per day 

140,937


141,994

96,251

138,292

127,586








Floating Production  Facility (1)














Days in period 

91


92

92

274

273

Production days

91


92

92

274

273

Average bpd

15,137


18,250

20,963

16,437

24,320

Average tariff revenue per day

90,818


109,514

125,780

98,655

145,923

Average other revenue per day 

1,393


1,387

5,520

1,391

3,616

Total average revenue per day 

92,211


110,901

131,300

100,046

149,539















Note 1: Operating days represent actual days under contract.











Note 2: Costs which are reimbursed by the client are included in the average revenue per day calculation.  








 

SOURCE Northern Offshore, Ltd.



RELATED LINKS
http://www.northernoffshorelimited.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.