Northern Offshore Reports Fourth Quarter and Preliminary Full Year 2009 Results
HOUSTON, Feb. 24 /PRNewswire-FirstCall/ -- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended December 31, 2009 of US$17.4 million, or US$0.11 per diluted share, on revenues of US$69.2 million. This compares to net income of US$16.6 million, or US$0.11 per diluted share, for the fourth quarter of 2008, on revenues of US$73.5 million.
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Results for the fourth quarter of 2009 include a US$1.1 million charge related to an executive separation agreement. Fourth quarter 2008 results included a US$2.2 million bad debt expense. Excluding these items from the respective periods, fourth quarter 2009 net income would have been US$18.5 million or US$0.12 per diluted share compared to net income of US$18.8 million or US$0.12 per diluted share for the same quarter of the prior year.
Full year 2009 net income increased 17 percent from the prior year. For the year ended December 31, 2009, net income was US$75.1 million or US$0.49 per diluted share. This compares to net income for the year ended December 31, 2008 of US$64.1 million or US$0.42 per diluted share. Excluding the US$1.1 million charge discussed above and a US$3.7 million bad debt expense taken in the first quarter, the company would have reported net income of US$79.9 million or US$0.52 per diluted share for the full year of 2009. This compares to net income of US$69.3 million or US$0.45 per diluted share for 2008, excluding the US$2.2 million bad debt expense discussed above and a US$3.0 million charge associated with a terminated transaction during the third quarter of 2008. Revenues in 2009 were US$279.2 million, slightly higher than the US$276.2 million reported in 2008.
Fourth Quarter Analysis
Revenues for the three months ended December 31, 2009 decreased US$4.3 million compared to the same period of 2008. This decrease was primarily due to lower utilization of the jackups Energy Exerter and Energy Enhancer, which were idle during the 2009 fourth quarter, and lower dayrates for the jackup Energy Endeavour. Partially offsetting this decline were revenue from the drillship Energy Searcher, which had been idle in the fourth quarter of the previous year, earnings from the company's recently announced management contract in the Caspian region, as well as tariff revenue from the floating production facility Northern Producer, which was undergoing shipyard upgrades in 2008.
Drilling and production expenses for the fourth quarter of 2009 were US$6.8 million lower compared to the same period of 2008 due to lower utilization of the jackup fleet in the 2009 quarter. This was partially offset by higher expenses associated with the utilization of the drillship Energy Searcher. Amortization of drilling contract intangibles declined US$2.0 million from the previous year quarter as intangibles were fully amortized in the third quarter of 2009. Interest expense decreased US$2.9 million compared to the prior year quarter due primarily to the reduction in principal balance of the Bank Term Loan and lower interest rates.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, February 25, 2010 to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call 866-770-7146 (in the U.S.) or 617-213-8068 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 66822682.
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. The company also provides rig management services, and is currently operating in this capacity on two semisubmersibles in the Caspian Sea. 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: |
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Brian Hefty at (713) 739-7686, |
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or via email at [email protected] |
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NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Three Twelve
Months Ended Months Ended
(Thousands of US December 31, December 31,
Dollars, except -------------- ----------------
per share amounts) Q3 2009 2009 2008 2009 2008
Revenue 80,086 69,178 73,510 279,169 276,187
Operating expenses:
Drilling and
production (30,699) (29,177) (35,994) (117,804) (133,012)
Depreciation (14,515) (15,520) (16,007) (62,033) (62,002)
General &
administrative (1,987) (2,571) (721) (8,588) (9,025)
Bad debt 57 - (2,170) (3,840) (2,420)
---------- -- --- ------ ------ ------
Total operating
expenses (47,144) (47,268) (54,892) (192,265) (206,459)
--------------- ------- ------- ------- -------- --------
Operating income 32,942 21,910 18,618 86,904 69,728
---------------- ------ ------ ------ ------ ------
Interest income 48 60 881 310 1,827
Interest expense (2,280) (1,949) (4,835) (10,197) (22,340)
Amortization of
drilling contract
intangibles 1,850 - 2,018 5,887 21,946
Amortization of
deferred financing
fees (397) (397) (397) (1,587) (1,587)
Other financial
items 1,206 (1,248) 229 (398) (1,037)
----------------- ----- ------ --- ---- ------
Total other income/
(expense), net 427 (3,534) (2,104) (5,985) (1,191)
------------------- --- ------ ------ ------ ------
Income before taxes 33,369 18,376 16,514 80,919 68,537
------------------- ------ ------ ------ ------ ------
Income taxes -
(expense)/benefit (2,124) (973) 45 (5,860) (4,457)
-------------------- ------ ---- -- ------ ------
Net income 31,245 17,403 16,559 75,059 64,080
---------- ------ ------ ------ ------ ------
Earnings per share
(US$)
Basic 0.20 0.11 0.11 0.49 0.42
Diluted 0.20 0.11 0.11 0.49 0.42
Weighted average
common shares
(000’s)
Basic 153,108 153,327 153,100 153,161 153,100
Diluted 153,978 154,845 153,101 153,797 153,100
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)
December 31, December 31,
(Thousands of US Dollars) 2009 2008
Current assets
Cash and cash equivalents 79,162 58,759
Restricted cash 9,371 8,077
Account receivables, net 35,423 48,797
Prepaid expenses 6,097 17,202
Deferred financing fees 561 1,586
Deferred mobilization costs 601 566
---------------------------- --- ---
Total current assets 131,215 134,987
-------------------- ------- -------
Non-current assets
Property, plant & equipment, net 499,594 545,731
Restricted cash, net of current
portion 6,438 6,438
Deferred mobilization cost, net of
current portion 382 847
Deferred income tax assets - 645
Deferred financing fees, net of
current portion - 461
--- ---
Total non-current Assets 506,414 554,122
------------------------ ------- -------
Total assets 637,629 689,109
------------ ------- -------
Current liabilities
Accounts payable 12,917 19,975
Accrued expenses 21,467 5,215
Income tax payable 3,762 8,969
Current portion of debt 197,500 90,000
Deferred revenue 2,076 24,284
Current portion of drilling contract
intangibles - 5,887
------------------------------------ --- -----
Total current liabilities 237,722 154,330
------------------------- ------- -------
Non-current liabilities
Long-term debt, net of current portion - 197,500
Deferred revenue, net of current
portion 2,396 997
Other long-term liabilities 6,022 21,290
---------------------------- ----- ------
Total non-current liabilities 8,418 219,787
----------------------------- ----- -------
Total liabilities 246,140 374,117
------------------ ------- -------
Shareholders' equity
Share capital 38,829 38,281
Additional paid-in capital 165,750 164,860
Accumulated other comprehensive loss (6,691) (6,691)
Retained earnings 193,601 118,542
----------------- ------- -------
Total shareholders' equity 391,489 314,992
-------------------------- ------- -------
Total liabilities and
shareholders' equity 637,629 689,109
--------------------- ------- -------
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)
Twelve months ended
December 31,
--------------------
(Thousands of US Dollars) 2009 2008
Cash flows from operating
activities
Net income 75,059 64,080
Adjustments to reconcile net
income to net cash provided by
operating activities:
Bad debt expense 3,840 2,420
Stock-based compensation 1,438 1,692
Depreciation 62,033 62,002
Amortization of drilling
contract intangibles (5,887) (21,946)
Amortization of deferred
financing fees 1,586 1,587
Realized gain on foreign
currency (477) (6,628)
Gain on sale of asset - (1,485)
Interest, net (375) 642
Changes in operating assets and
working capital
(Increase) decrease in accounts
receivable 11,042 (18,289)
Decrease in prepaid
expenses 11,358 1,256
Increase in other current assets (100) -
(Increase) decrease in deferred
tax assets (73) 637
Increase (decrease) in accounts
payable (3,244) 3,181
Increase in other accrued
liabilities (2,292) 72
Increase (decrease) in deferred
revenue (20,809) 25,281
Increase in other long term
liabilities - 21,290
Current income taxes (5,367) 2,580
Other, net 142 (1,377)
---------------------------------- ------- -------
Net cash provided by operating
activities 127,874 136,995
------------------------------ ------- -------
Cash flows from investing activities
Capital expenditures (16,371) (46,634)
Release of restricted cash - 27,985
Funding of restricted cash (1,250) -
Proceeds from sale of equipment 475 2,170
------------------------------- --- -----
Net cash provided by/ (used in)
investing activities (17,146) (16,479)
-------------------------------- ------- -------
Cash flows from financing activities
Proceeds from commercial paper - 24,392
Repayment of commercial paper - (17,764)
Principal payment of bank term
loan (90,000) (90,000)
---------------------------------- ------- -------
Net cash used in financing
activities (90,000) (83,372)
-------------------------- ------- -------
Net increase/(decrease) in cash
and cash equivalents 20,728 37,144
Cash and cash equivalents at
beginning of period 58,759 21,690
Effects of exchange rate changes
on cash and cash equivalents (325) (75)
---- ---
Cash and cash equivalents at end
of period 79,162 58,759
------ ------
Supplemental disclosure of cash flow
information
Cash paid during the period for:
Income taxes 4,638 3,232
Interest 10,163 19,339
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
Other
Common Additional comprehensive
(Thousands of shares Share paid-in gain / Retained
US 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 75,059 75,059
Issuance of
restricted
stock 2,193 548 (548) - - -
Stock-based
compensation - - 1,438 - - 1,438
--- --- ----- --- --- -----
Balance at
December
31, 2009 155,317 38,829 165,750 (6,691) 193,601 391,489
------- ------ ------- ------ ------- -------
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
(Thousands of ------------------ -------------------
US Dollars) 2009 2008 2009 2008
Net income 17,403 16,559 75,059 64,080
Currency translation
adjustment - (815) - (624)
------ ------ ------ ------
Total other
comprehensive income 17,403 15,744 75,059 63,456
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Financial Results
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------ -------------
(Thousands of US
Dollars) Q3 2009 2009 2008 2009 2008
Net Income (GAAP) 31,245 17,403 16,559 75,059 64,080
Add Back:
Net interest expense 2,629 2,286 4,351 11,474 22,100
Income taxes 2,124 973 (45) 5,860 4,457
Depreciation 14,515 15,520 16,007 62,033 62,002
Amortization (1,850) - (2,018) (5,887) (21,946)
----------------- ------ ------ ------ ------- -------
EBITDA (Non-GAAP) 48,663 36,182 34,854 148,539 130,693
----------------- ------ ------ ------ ------- -------
EBITDA is defined as Net Income before Interest, Taxes,
Depreciation and Amortization.
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Operating Statistics
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------ ------------
Q3 2009 2009 2008 2009 2008
Jackups (3)
Average rig utilization 73% 33% 100% 71% 97%
Operating days 201 92 276 781 1,065
Average revenue per day 109,958 93,979 199,583 133,930 183,034
Drillship (1)
Average rig utilization 100% 100% 0% 62% 43%
Operating days 92 92 - 227 158
Average revenue per day 333,541 327,038 - 317,148 245,739
Semisubmersible (1)
Average rig utilization 100% 100% 100% 100% 48%
Operating days 92 92 92 365 174
Average revenue per day 212,049 227,922 195,411 219,993 210,090
Total Drilling Rigs
Average rig utilization 84% 60% 80% 75% 76%
Operating days 385 276 368 1,373 1,397
Average revenue per day 187,801 216,313 198,542 187,146 193,487
Floating Production
Facility (1)
Operating days 92 92 92 365 306
Days available for tariff 92 92 - 248 -
Average bpd 15,039 12,389 - 12,389 -
Average tariff revenue
per day 68,776 61,111 - 57,808 -
Average other revenue
per day 15,607 8,775 4,851 13,140 19,247
Total average revenue
per day 84,383 69,886 4,851 52,415 19,247
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.
Note 3: In Q4'09 we earned an average dayrate of US$33,108 per day for
provision of rig management services for two semisubmersibles in the
Caspian Sea commencing October 1, 2009.
Note 4: Costs which are reimbursed by the client are included in the
average revenue per day calculation.
SOURCE Northern Offshore, Ltd.
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