Diamond Offshore Announces Second Quarter 2015 Results

-- Reports Net Income of $90 million, $0.66 per Share

-- Confirms Delivery of Fourth Drillship, Ocean BlackLion

-- Announces Term Contract for Semisubmersible Rig, Ocean Apex

-- Declares Regular Cash Dividend of $0.125 per Share

Aug 03, 2015, 06:00 ET from Diamond Offshore Drilling, Inc.

HOUSTON, Aug. 3, 2015 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $90 million, or $0.66 per share, in the second quarter of 2015, compared to $90 million, or $0.65 per share, in the second quarter of 2014.  Revenues in the second quarter of 2015 were $634 million, compared to revenues of $692 million in the second quarter of 2014.

"During the quarter, our second and third newbuild drillships, the Ocean BlackHornet and Ocean BlackRhino, began working in the Gulf of Mexico, and we have taken delivery of our fourth and final newbuild drillship, the Ocean BlackLion, which we expect to be on dayrate near year-end," said Marc Edwards, President and Chief Executive Officer.  "All four of these units will be working in the Gulf, where we will enjoy operational economies of scale."

"Our results for the quarter reflect ongoing efforts to manage costs effectively while remaining focused on safe operations and fleet reliability," added Mr. Edwards.  "We delivered our best safety performance on record during Q2."

Additionally, the Company today announced that the Ocean Apex was awarded a contract for an 18-month term offshore Australia beginning in the second quarter of 2016 at a rate of $285,000 per day.

Diamond Offshore also announced today that it has declared a regular quarterly dividend of $0.125 per share, payable on September 1, 2015 to shareholders of record as of August 14, 2015.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 7:30 a.m. CDT today.   A live webcast of the call will be available online on the Company's website, www.diamondoffshore.com.  Those interested in participating in the question and answer session should dial 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 77534754.  An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 35 offshore drilling rigs, including one rig under construction.  Diamond Offshore's fleet consists of 24 semisubmersibles, one of which is under construction, five dynamically positioned drillships, and six jack-ups. Additional information about the Company and access to the Company's SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release or made during the above conference call that are not historical facts are "forward-looking statements" within the meaning of the federal securities laws.  Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness, effective dates and estimated duration; plans regarding retirement and scrapping of drilling rigs; future impairments; future dividends; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions, commodity prices and strategic opportunities; revenue expected to result from backlog; future credit ratings; future dayrates, future status, start and end dates and future contracts and availability; future contract opportunities and termination rights; contract noncompliance by customers and other third parties; utilization, surveys, downtime and other aspects of the Company's drilling rigs; statements concerning customer discussions and outcomes thereof and the impact of these and related events on the Company's operations and revenues; rigs being upgraded or to be upgraded and rigs under construction; and other statements that are not of historical fact.  Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company.  A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission, and readers of this press release are urged to review those reports carefully when considering these forward-looking statements.  Copies of these reports are available through the Company's website at www.diamondoffshore.com.  These risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, declaration of dividends, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, many of which are beyond the Company's control.  Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements.  Each forward-looking statement speaks only as of the date of this press release.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

Contact:
Darren Daugherty
Director, Investor Relations
(281) 492-5370


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)








Three Months Ended


Six Months Ended



June 30,


June 30,



2015


2014


2015


2014

Revenues:









         Contract drilling

$

617,442

$

649,554

$

1,217,019

$

1,334,862

         Revenues related to reimbursable expenses


16,590


42,690


37,069


66,806

                Total revenues


634,032


692,244


1,254,088


1,401,668










Operating expenses:









         Contract drilling, excluding depreciation


342,869


395,376


693,527


765,166

         Reimbursable expenses


16,336


42,290


36,428


65,956

         Depreciation


123,329


108,906


260,628


215,917

         General and administrative


16,548


20,478


34,000


43,305

         Impairment of assets


--


--


358,528


--

         Restructuring and separation costs


993


--


7,161


--

         Gain on disposition of assets


(164)


(8,572)


(775)


(8,719)

                Total operating expenses


499,911


558,478


1,389,497


1,081,625










Operating income (loss)


134,121


133,766


(135,409)


320,043










Other income (expense):









         Interest income


584


150


1,167


558

         Interest expense


(25,468)


(18,523)


(49,450)


(36,678)

Foreign currency transaction gain (loss)


(3,473)


(2,971)


2,117


(4,149)

         Other, net


264


181


485


508










Income (loss) before income tax (expense) benefit


106,028


112,603


(181,090)


280,282










Income tax (expense) benefit


(15,642)


(22,890)


15,767


(44,759)










Net income (loss)

$

90,386

$

89,713

$

(165,323)

$

235,523










Income (loss) per share

$

0.66

$

0.65

$

(1.21)

$

1.71










Weighted average shares outstanding:









Shares of common stock


137,159


137,145


137,155


137,803

Dilutive potential shares of common stock


42


4


--


5

Total weighted average shares outstanding


137,201


137,149


137,155


137,808





























 

 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

(In thousands)






Three Months Ended



June 30,


March 31,


June 30,



2015


2015


2014








REVENUES







 Floaters:







   Ultra-Deepwater

$

315,670

$

251,396

$

182,656

   Deepwater


181,104


138,770


120,539

   Mid-water


96,926


176,357


300,902

      Total Floaters


593,700


566,523


604,097

  Jack-ups


23,742


33,054


45,457

Total Contract Drilling Revenue

$

617,442

$

599,577

$

649,554








Revenues Related to Reimbursable Expenses

 

$

 

16,590

 

$

 

20,479

 

$

 

42,690








CONTRACT DRILLING EXPENSE







 Floaters:







   Ultra-Deepwater

$

161,485

$

154,539

$

122,327

   Deepwater


86,464


63,675


81,641

   Mid-water


66,735


99,320


148,931

      Total Floaters


314,684


317,534


352,899

  Jack-ups


20,873


21,570


29,851

  Other


7,312


11,554


12,626

Total Contract Drilling Expense

$

342,869

$

350,658

$

395,376








Reimbursable Expenses

$

16,336

$

20,092

$

42,290








OPERATING INCOME (LOSS)







 Floaters:







   Ultra-Deepwater

$

154,185

$

96,857

$

60,329

   Deepwater


94,640


75,095


38,898

   Mid-water


30,191


77,037


151,971

      Total Floaters


279,016


248,989


251,198

  Jack-ups


2,869


11,484


15,606

  Other


(7,312)


(11,554)


(12,626)

  Reimbursable expenses, net


254


387


400

  Depreciation


(123,329)


(137,299)


(108,906)

  General and administrative expense


(16,548)


(17,452)


(20,478)

  Gain  on disposition of assets


164


611


8,572

  Impairment of assets


--


(358,528)


--

  Restructuring and separation costs


(993)


(6,168)


--

          Total Operating Income (Loss)

$

134,121

$

(269,530)

$

133,766











 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)












 June 30,

December 31,





2015


2014






ASSETS










Current assets:






Cash and cash equivalents

$

95,854

$

233,623








Marketable securities


15,953


16,033








Accounts receivable, net of allowance for bad debts


516,008


463,862








Prepaid expenses and other current assets


194,615


185,541











822,430


899,059






Drilling and other property and equipment, net of





     accumulated depreciation


6,930,329


6,945,953







Other assets


122,883


176,277



Total assets

$

7,875,642

$

8,021,289








LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

250,000

$

249,962






Short-term borrowings


374,978


--

 

Other current liabilities


 

408,728


 

606,684






Long-term debt


1,994,648


1,994,526






Deferred tax liability


407,808


530,394






Other liabilities


181,710


188,160








Stockholders' equity


4,257,770


4,451,563










Total liabilities and stockholders' equity

$

7,875,642

$

8,021,289


















 

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)






Second Quarter

2015

First Quarter

2015

Second Quarter

2014


Average

Dayrate (1)

Utilization (2)

Operational Efficiency

(3)

Average

Dayrate (1)

Utilization (2)

Operational Efficiency

(3)

Revised Average

Dayrate (4)

Utilization (2)

Operational Efficiency

(3)































Ultra-Deepwater Floaters

$483

63%

90.9%

$497

51%

81.5%

$435

51%

96.0%











Deepwater Floaters

$451

63%

99.3%

$486

45%

95.1%

$429

51%

99.3%











Mid-Water floaters

$278

32%

99.7%

$266

49%

94.1%

$272

68%

97.6%











Jack-ups

$83

53%

98.6%

$92

66%

99.4%

$98

74%

99.4%











Fleet Total



95.9%



91.2%



97.8%

 

(1)

Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue earning day.  A revenue earning day is defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and contract preparation days.



(2)

Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet (including cold-stacked rigs, but excluding rigs under construction).  As of June 30, 2015, our cold-stacked rigs included one deepwater semisubmersible, four mid-water semisubmersibles and four jack-up rigs. 



(3)

Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.



(4)

Average dayrate reported in prior periods has been revised to conform to current presentation.

 

 

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SOURCE Diamond Offshore Drilling, Inc.



RELATED LINKS

http://www.diamondoffshore.com