Noble Corporation plc Reports Second Quarter 2015 Results

Demonstrating Solid Fleet Performance And Cost Management

Jul 29, 2015, 17:00 ET from Noble Corporation

LONDON, July 29, 2015 /PRNewswire/ -- Noble Corporation plc (NYSE: NE) today reported second quarter 2015 net income attributable to Noble Corporation of $159 million, or $0.64 per diluted share. The results compared to net income attributable to Noble Corporation in the first quarter of 2015 of $178 million, or $0.72 per diluted share. For the second quarter of 2014, net income from continuing operations attributable to Noble Corporation was $140 million, or $0.54 per diluted share. Revenues for the second quarter of 2015 totaled $794 million compared to revenues of $804 million in both the first quarter of 2015 and second quarter of 2014. 

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation plc, stated, "Through the first half of 2015, Noble has successfully combined a considerable backlog and strong contract coverage with excellent fleet performance and successful cost management initiatives to deliver solid financial results, in spite of the challenges presented by current market conditions.  During the second quarter, we again demonstrated strong and reliable operational execution with fleet downtime at just over 4 percent, which was better than guided levels. Operating costs continued a favorable trend in the quarter, declining approximately 1 percent from the first quarter. Our successful cost management efforts through the first half of 2015 have led us once again to lower full year contract drilling costs to an estimated range of $1.27 to $1.32 billion." 

Contract drilling services revenues in the second quarter of 2015 totaled $771 million compared to revenues of $779 million in the prior quarter, with a majority of the modest decline attributable to the completion of a contract in early-February 2015 on the semisubmersible Noble Jim Thompson, along with lower mobilization revenues in the quarter. As previously disclosed, following the completion of the contract on the Noble Jim Thompson, the rig was retired. The slight decline in revenue in the second quarter was partially offset by one additional calendar day in the quarter. Fleet utilization in the second quarter was 83 percent compared to 86 percent in the prior quarter, primarily reflecting a decline in the Company's jackup fleet utilization. Average daily revenues in the second quarter remained stable at  $340,200, compared to $340,000 in the first quarter.  Contract drilling services operating costs continued a favorable trend, declining to $319 million in the second quarter from $322 million in the prior quarter. The decline was driven largely by cost control initiatives which include reductions in labor and idle rig costs, as well as lower insurance costs. These cost reductions were partially offset by a minor increase in repair and maintenance costs. With the continued decline in contract drilling operating costs, the contract drilling services margin in the second quarter of 2015 held steady with the prior quarter margin at 59 percent.

Net cash from operating activities totaled $399 million in the second quarter of 2015 and $768 million for the six months ended June 30, 2015, while capital expenditures in the second quarter were $81 million and totaled $170 million through June 30, 2015. The Company has reduced its expected 2015 capital expenditures by $60 million, to $525 million following further cost management initiatives and revised timing for certain expenditures pertaining to major projects.

Total debt at June 30, 2015 was $4.8 billion, essentially flat with the $4.9 billion in debt reported at March 31, 2015. Debt to total capital was unchanged at 40 percent at June 30, 2015. Senior Notes totaling $350 million will mature on August 1, 2015, and the Company anticipates using predominately cash on hand to repay the outstanding balance. Liquidity, defined as cash, cash equivalents and availability under revolving credit facilities, was $2.9 billion at the end of the second quarter, up from $2.7 billion at March 31, 2015.

Operating Highlights

The Company's floating rig fleet, comprised of nine drillships and eight semisubmersibles, recorded utilization of 82 percent in the second quarter of 2015, decreasing modestly from 83 percent in the prior quarter. While the Company's nine drillships remained fully utilized in the quarter, utilization of the semisubmersible fleet was 63 percent, with the Noble Homer Ferrington stacked, the Noble Max Smith idle and the Noble Paul Romano in a shipyard completing final preparations for a one-year primary-term contract expected to commence in September 2015 at a dayrate of $300,000. The average daily revenues on the floating fleet were $471,800 in the second quarter, up from $467,100 in the prior quarter. During the second quarter, the Company secured an estimated 60-day contract for the semisubmersible Noble Danny Adkins. The rig remains contracted in the U.S. Gulf of Mexico into late-August 2015.

Utilization of the Company's jackup rig fleet, comprised of 15 units including one unit under construction, was 84 percent in the second quarter of 2015 compared to 92 percent in the prior quarter.  The decline was primarily driven by the April 2015 activation of the newbuild Noble Tom Prosser, which increased the number of jackups in service to 13. The rig's initial contract, covering a primary term of 18 months at a dayrate of $203,000, is expected to commence during the third quarter of 2015. Average daily revenues in the second quarter were $171,500 compared to $172,700 in the prior quarter. In addition to the Noble Tom Prosser, the Noble Mick O'Brien was idle during the second quarter awaiting commencement of its previously disclosed contract covering an estimated 400 days at a dayrate of $150,000. The contract is expected to commence in the second quarter of 2016. Also, the newbuild Noble Sam Hartley is expected to complete enhancements to its technical specifications late in the third quarter of 2015, increasing Noble's number of jackups in service to 14. The Company remains reasonably confident regarding contract opportunities for the rig. Finally, following the close of the second quarter, the Company was awarded a one well contract for the Noble Regina Allen at a dayrate of $155,000 for additional work in the North Sea. The rig should remain under contract into early September 2015.

At June 30, 2015, Noble's total contract backlog was $8.7 billion compared to $9.4 billion at March 31, 2015.  For the remainder of 2015, 79 percent of the Company's available rig operating days were committed to contracts, including 78 percent of floating rig days and 80 percent of jackup rig days. For 2016, an estimated 63 percent of available rig operating days are committed to contracts, consisting of 58 percent and 68 percent of floating and jackup rig days, respectively.

Outlook

In closing, Williams stated, "During the first half of 2015, we have made significant progress toward achieving several important priorities for the Company including enhancing fleet reliability and uptime performance, further reducing operating costs and securing additional committed time on our rigs, all of which contributed to margin preservation and a steady cash position. These priorities remain central to our strategy for managing through the current cycle."

Market conditions will remain strained for now, but our premium fleet mix, solid contract cover, excellent operations execution and reduced capital needs leave the Company well-placed, with the flexibility to improve our competitive position as we move closer to the inevitable cyclical recovery."

About Noble Corporation

Noble is a leading offshore drilling contractor for the oil and gas industry. The Company owns and operates one of the most modern, versatile and technically advanced fleets in the offshore drilling industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 32 offshore drilling units, consisting of 17 semisubmersibles and drillships and 15 jackups, focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide. Noble is a public limited company registered in England and Wales with company number 08354954 and registered office at Devonshire House, 1 Mayfair Place, London, W1J 8AJ England. Additional information on Noble is available at www.noblecorp.com.

Forward-looking Disclosure Statement

Statements regarding contract backlog, future earnings, costs, expense management, revenue, rig demand, fleet condition, operational or financial performance, shareholder value, timing of delivery of newbuilds, shipyard projects, contract commitments, dayrates, contract commencements, contract extensions, renewals or renegotiations, letters of intent or award, industry fundamentals, customer relationships and requirements, strategic initiatives, future performance, growth opportunities, market outlook, capital allocation strategies, competitive position, capital expenditures, financial flexibility, debt levels, debt repayment, share repurchases, 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, market 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. 

Conference Call

Noble also has scheduled a conference call and webcast related to its second quarter 2015 results on Thursday, July 30, 2015, 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: 61268886, 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, July 30, 2015, beginning at 11:00 a.m. U.S. Central Daylight Time, through Friday, August 28, 2015, ending at 11:00 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: 61268886.  The replay will also be available on the Company's Web site following the end of the live call.

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF INCOME 

 (In thousands, except per share amounts) 

 (Unaudited) 

Three Months Ended

Six Months Ended

June 30, 

June 30, 

2015

2014

2015

2014

 Operating revenues 

 Contract drilling services 

$ 771,307

$ 779,368

$ 1,550,668

$ 1,550,005

 Reimbursables 

22,248

24,413

47,229

48,963

793,555

803,781

1,597,897

1,598,968

 Operating costs and expenses 

 Contract drilling services 

319,207

370,902

640,957

723,782

 Reimbursables 

17,652

17,732

37,809

39,236

 Depreciation and amortization 

159,123

152,862

313,261

299,060

 General and administrative 

22,424

27,080

46,362

52,717

518,406

568,576

1,038,389

1,114,795

 Operating income  

275,149

235,205

559,508

484,173

 Other income (expense) 

 Interest expense, net of amount capitalized 

(57,465)

(36,351)

(106,509)

(76,743)

 Interest income and other, net 

(431)

(1,361)

6,151

(2,629)

 Income before income taxes 

217,253

197,493

459,150

404,801

 Income tax provision 

(39,405)

(34,265)

(82,852)

(69,843)

Net income from continuing operations

177,848

163,228

376,298

334,958

Net income from discontinued operations, net of tax

-

94,234

-

195,746

 Net income  

177,848

257,462

376,298

530,704

 Net income attributable to noncontrolling interests 

(18,817)

(22,903)

(38,864)

(39,819)

 Net income attributable to Noble Corporation plc 

$ 159,031

$ 234,559

$    337,434

$    490,885

Net income attributable to Noble Corporation plc

Income from continuing operations

$ 159,031

$ 140,325

$    337,434

$    295,139

Income from discontinued operations

-

94,234

-

195,746

Net income attributable to Noble Corporation plc

$ 159,031

$ 234,559

$    337,434

$    490,885

 Per share data: 

 Basic 

Income from continuing operations

$       0.64

$       0.54

$          1.36

$          1.14

Income  from discontinued operations

-

0.37

-

0.76

Net income attributable to Noble Corporation plc

$       0.64

$       0.91

$          1.36

$          1.90

 Diluted 

Income from continuing operations

$       0.64

$       0.54

$          1.36

$          1.14

Income from discontinued operations

-

0.37

-

0.76

Net income attributable to Noble Corporation plc

$       0.64

$       0.91

$          1.36

$          1.90

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 

 June 30,  

 December 31, 

2015

2014

 ASSETS 

 Current assets 

 Cash and cash equivalents 

$      247,683

$               68,510

 Accounts receivable 

540,423

569,096

 Prepaid expenses and other current assets 

222,198

290,956

 Total current assets 

1,010,304

928,562

 Property and equipment, at cost 

14,610,963

14,442,922

 Accumulated depreciation 

(2,640,518)

(2,330,413)

 Property and equipment, net 

11,970,445

12,112,509

 Other assets 

223,967

245,751

 Total assets 

$ 13,204,716

$        13,286,822

 LIABILITIES AND  EQUITY 

 Current liabilities 

 Current maturities of long-term debt (1)

$      250,000

$                       -

 Accounts payable 

220,475

265,389

 Accrued payroll and related costs 

81,804

102,520

 Other current liabilities 

301,615

300,765

 Total current liabilities 

853,894

668,674

Long-term debt (1)

4,588,541

4,869,020

 Deferred income taxes 

104,402

120,589

 Other liabilities 

310,481

341,505

 Total liabilities 

5,857,318

5,999,788

 Commitments and contingencies 

 Equity 

 Total shareholders' equity 

6,630,714

6,564,730

 Noncontrolling interests 

716,684

722,304

 Total equity 

7,347,398

7,287,034

 Total liabilities and equity 

$ 13,204,716

$        13,286,822

(1)

Current maturities of long-term debt include amounts related to our 2015 Senior Notes, due in August, that are expected to be paid from cash on hand based on projections as of July 29, 2015.  Balances in current maturities of long-term debt may be adjusted in the quarterly report on Form 10-Q to reflect actual amounts paid at maturity.

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 (Unaudited) 

Six Months Ended

June 30, 

2015

2014

 Cash flows from operating activities 

 Net income 

$   376,298

$   530,704

 Adjustments to reconcile net income to net cash from operating activities: 

 Depreciation and amortization 

313,261

500,299

 Other changes in operating activities 

78,319

820

 Net cash from operating activities 

767,878

1,031,823

 Cash flows from investing activities 

 New construction 

(23,360)

(836,251)

 Other capital expenditures 

(135,294)

(352,744)

 Capitalized interest 

(11,629)

(27,409)

 Other investing activities 

(38,408)

(11,813)

 Net cash from investing activities 

(208,691)

(1,228,217)

 Cash flows from financing activities 

 Net change in borrowings outstanding on bank credit facilities 

(1,123,495)

707,472

 Dividend payments 

(185,669)

(193,740)

 Issuance of senior notes 

1,092,728

-

 Debt issuance costs on senior notes and credit facilities 

(16,070)

(386)

 Repayment of long-term debt 

-

(250,000)

 Repurchases of shares 

(100,630)

-

 Other financing activities 

(46,878)

(40,873)

 Net cash from financing activities 

(380,014)

222,473

 Net change in cash and cash equivalents 

179,173

26,079

 Cash and cash equivalents, beginning of period 

68,510

114,458

 Cash and cash equivalents, end of period 

$   247,683

$   140,537

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT 

 (In thousands, except operating statistics) 

 (Unaudited) 

Three Months Ended June 30,

Three Months Ended March 31,

2015

2014

2015

Contract

Contract

Contract

Drilling

Drilling

Drilling

Services

Other

Total

Services

Other

Total

Services

Other

Total

 Operating revenues 

 Contract drilling services 

$ 771,307

$          -

$ 771,307

$ 779,368

$          -

$ 779,368

$ 779,361

$          -

$ 779,361

 Reimbursables 

22,248

-

22,248

22,243

2,170

24,413

24,981

-

24,981

$ 793,555

$          -

$ 793,555

$ 801,611

$  2,170

$ 803,781

$ 804,342

$          -

$ 804,342

 Operating costs and expenses 

 Contract drilling services 

$ 319,207

$          -

$ 319,207

$ 370,902

$          -

$ 370,902

$ 321,750

$          -

$ 321,750

 Reimbursables 

17,652

-

17,652

17,097

635

17,732

20,157

-

20,157

 Depreciation and amortization 

153,579

5,544

159,123

148,324

4,538

152,862

148,208

5,930

154,138

 General and administrative 

22,424

-

22,424

26,845

235

27,080

23,938

-

23,938

$ 512,862

$   5,544

$ 518,406

$ 563,168

$   5,408

$ 568,576

$ 514,053

$   5,930

$ 519,983

 Operating income 

$ 280,693

$ (5,544)

$ 275,149

$ 238,443

$ (3,238)

$ 235,205

$ 290,289

$ (5,930)

$ 284,359

 Operating statistics 

 Jackups: 

 Average Rig Utilization 

84%

87%

92%

 Operating Days 

993

870

990

 Average Dayrate 

$ 171,482

$ 178,259

$ 172,700

 Semisubmersibles: 

 Average Rig Utilization 

63%

74%

65%

 Operating Days 

455

742

493

 Average Dayrate 

$ 403,319

$ 424,199

$ 392,777

 Drillships: 

 Average Rig Utilization 

100%

100%

100%

 Operating Days 

819

637

810

 Average Dayrate 

$ 509,783

$ 485,686

$ 512,259

 Total: 

 Average Rig Utilization 

83%

85%

86%

 Operating Days 

2,267

2,249

2,293

 Average Dayrate 

$ 340,217

$ 346,494

$ 339,961

 

 NOBLE CORPORATION PLC 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 

 Six months ended 

 June 30, 

 June 30, 

2015

2014

2015

2014

 Numerator:  

 Basic 

 Income from continuing operations 

$  159,031

$  140,325

$  337,434

$  295,139

 Earnings allocated to unvested share-based payment awards 

(3,555)

(2,257)

(7,489)

(4,767)

 Income from continuing operations to common shareholders 

$  155,476

$  138,068

$  329,945

$  290,372

 Income from discontinued operations 

$            -

$    94,234

$            -

$  195,746

 Earnings allocated to unvested share-based payment awards 

-

(1,519)

-

(3,281)

 Income from discontinued operations, net of tax to common shareholders 

$            -

$    92,715

$            -

$  192,465

 Net income attributable to Noble Corporation plc 

$  159,031

$  234,559

$  337,434

$  490,885

 Earnings allocated to unvested share-based payment awards 

(3,555)

(3,776)

(7,489)

(8,048)

 Net income attributable to Noble Corporation plc to common shareholders 

$  155,476

$  230,783

$  329,945

$  482,837

 Diluted 

 Income from continuing operations 

$  159,031

$  140,325

$  337,434

$  295,139

 Earnings allocated to unvested share-based payment awards 

(3,555)

(2,256)

(7,489)

(4,766)

 Income from continuing operations to common shareholders 

$  155,476

$  138,069

$  329,945

$  290,373

 Income from discontinued operations 

$            -

$    94,234

$            -

$  195,746

 Earnings allocated to unvested share-based payment awards 

-

(1,518)

-

(3,280)

 Income from discontinued operations, net of tax to common shareholders 

$            -

$    92,716

$            -

$  192,466

 Net income attributable to Noble Corporation plc 

$  159,031

$  234,559

$  337,434

$  490,885

 Earnings allocated to unvested share-based payment awards 

(3,555)

(3,774)

(7,489)

(8,046)

 Net income attributable to Noble Corporation plc to common shareholders 

$  155,476

$  230,785

$  329,945

$  482,839

 Denominator: 

 Weighted average shares outstanding - basic 

241,966

254,238

242,324

254,090

 Incremental shares issuable from assumed exercise of stock options 

-

97

-

116

 Weighted average shares outstanding - diluted 

241,966

254,335

242,324

254,206

 Weighted average unvested share-based payment awards 

5,533

4,156

5,500

4,172

 Earnings per share  

 Basic 

 Continuing operations 

$        0.64

$        0.54

$        1.36

$        1.14

 Discontinued operations 

-

0.37

-

0.76

 Net income attributable to Noble Corporation plc 

$        0.64

$        0.91

$        1.36

$        1.90

 Diluted 

 Continuing operations 

$        0.64

$        0.54

$        1.36

$        1.14

 Discontinued operations 

-

0.37

-

0.76

 Net income attributable to Noble Corporation plc 

$        0.64

$        0.91

$        1.36

$        1.90

 

SOURCE Noble Corporation



RELATED LINKS

http://www.noblecorp.com