Northern Offshore Reports Second Quarter and Six Month 2012 Financial Results and Declares Dividend
HOUSTON, Aug. 15, 2012 /PRNewswire/ --
Highlights
- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended June 30, 2012 of US$2.3 million, or US$0.01 per diluted share, on revenues of US$43.6 million.
- The company's directors have increased the dividend to US$0.04 per share, or approximately US$6.5 million.
- The Energy Searcher commenced operations under a new contract in Vietnam.
- The Energy Driller commenced operations under a new contract in India.
- The Energy Enhancer commenced operations under a new contract in Denmark.
Management Comment
Gary W. Casswell, Northern Offshore's president and CEO, commented, "We are pleased to have turned the corner from our transition period over the past several quarters. Our rig crews and shipyard teams did a professional job completing their projects and commencing new operations with the Energy Searcher, Energy Driller and Energy Enhancer. Most importantly, all of these projects were completed safely and without a recordable incident, and operational uptime on our units is meeting expectations. We expect to see improving profitability through the remainder of the year, providing greater cash flow for our shareholders, as represented by our board's increase of the quarterly dividend to US$0.04 per share."
Second Quarter Analysis
Net income for the three months ended June 30, 2012 was US$2.3 million, or US$0.01 per diluted share. This compares to net income of US$4.6 million, or US$0.03 per diluted share for the second quarter of 2011. Revenues for the second quarter of 2012 were US$43.6 million compared to US$49.9 million for the second quarter of 2011.
For the six months ended June 30, 2012, the net loss was US$11.8 million, or US$0.08 per diluted share. For the same period in the prior year, net income was US$7.0 million, or US$0.05 per diluted share. Revenues for the first six months of 2012 were US$71.9 million compared to US$90.4 million for the same period in 2011.
Revenues for the three months ended June 30, 2012 were US$6.3 million lower when compared to the same period of 2011, primarily due to a 10-day production shutdown of the floating production facility Northern Producer this quarter and the conclusion of a management services contract during 2011.
The tariff revenues from the Northern Producer averaged approximately US$91,000 per day in the second quarter of 2012. The company expects pricing levels to remain stable and production to increase in the near term.
Drilling and production expenses for the three months ended June 30, 2012 were US$2.6 million higher than the same period last year primarily due to contract start up costs. Depreciation expense for the second quarter of 2012 was US$1.1 million higher when compared with the same period in 2011 due to depreciation on additional capitalized shipyard costs for the drillship Energy Searcher and semisubmersible Energy Driller.
Second quarter 2012 general and administrative expenses, interest income and expense, and other financial items were comparable to those of the same period in 2011. Amortization of deferred financing fees was US$1.5 million lower than the same period last year primarily due to lower financing costs related to the revolving credit facility.
As of August 14, 2012, the company had an outstanding credit facility balance of US$70.0 million and a cash balance of US$25.2 million.
The company's directors have declared a dividend of US$0.04 per share, or approximately US$6.5 million. Shareholders of record with the VPS on August 31, 2012 will be entitled to receive the dividend, which will be paid on or around September 14, 2012. The shares of the company will be trading ex-dividend from August 29, 2012.
The results for the third quarter 2012 are expected to show a strong improvement in operating earnings, which will be positively influenced by a full operating quarter for the Energy Driller, Energy Searcher, and Energy Enhancer and increased production levels for the Northern Producer.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CDT, August 16, 2012 to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call 800-510-0146 (in the U.S.) or 617-614-3449 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 61074669.
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 drilling units and one production vessel in various markets around the world, including the North Sea, the Indian Ocean, the Mediterranean Sea and Southeast Asia. The company's fleet consists of five drilling units (a drillship, a semisubmersible and three 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, 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 [email protected]
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||||
Consolidated Statements of Operations |
|||||||
(Unaudited) |
|||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||
(Thousands of US Dollars, except per share amounts) |
Q1 2012 |
2012 |
2011 |
2012 |
2011 |
||
Revenues |
28,238 |
43,626 |
49,925 |
71,864 |
90,377 |
||
Operating expenses: |
|||||||
Drilling and production |
(35,142) |
(28,981) |
(26,389) |
(64,123) |
(52,812) |
||
Depreciation |
(9,398) |
(9,251) |
(8,175) |
(18,649) |
(16,119) |
||
General & administrative |
(1,911) |
(1,718) |
(1,538) |
(3,629) |
(3,290) |
||
Total operating expenses |
(46,451) |
(39,950) |
(36,102) |
(86,401) |
(72,221) |
||
Operating income/(loss) |
(18,213) |
3,676 |
13,823 |
(14,537) |
18,156 |
||
Interest income |
2 |
2 |
7 |
4 |
13 |
||
Interest expense |
(496) |
(666) |
(486) |
(1,162) |
(1,087) |
||
Amortization of deferred financing fees |
(138) |
(127) |
(1,582) |
(265) |
(2,333) |
||
Other financial items |
(373) |
179 |
(332) |
(194) |
(403) |
||
Total other income/(expense), net |
(1,005) |
(612) |
(2,393) |
(1,617) |
(3,810) |
||
Income/(loss) before taxes |
(19,218) |
3,064 |
11,430 |
(16,154) |
14,346 |
||
Income taxes - benefit/(expense) |
5,075 |
(719) |
(6,842) |
4,356 |
(7,323) |
||
Net income/(loss) |
(14,143) |
2,345 |
4,588 |
(11,798) |
7,023 |
||
Earnings per share (US$) |
|||||||
Basic |
(0.09) |
0.01 |
0.03 |
(0.08) |
0.05 |
||
Diluted |
(0.09) |
0.01 |
0.03 |
(0.08) |
0.05 |
||
Weighted average common shares (000's) |
|||||||
Basic |
155,689 |
155,891 |
155,007 |
155,791 |
154,877 |
||
Diluted |
155,689 |
155,891 |
155,645 |
155,791 |
155,451 |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||
Consolidated Balance Sheets |
||
(Unaudited) |
||
(Thousands of US Dollars) |
June 30, 2012 |
December 31, 2011 |
Current assets |
||
Cash and cash equivalents |
7,309 |
10,601 |
Restricted cash |
5,000 |
7,604 |
Accounts receivable, net |
28,589 |
36,649 |
Prepaid expenses |
3,258 |
2,083 |
Deferred mobilization costs |
3,161 |
246 |
Deferred insurance premium |
4,369 |
1,822 |
Income taxes benefit |
3,985 |
- |
Other current assets |
1,624 |
820 |
Total current assets |
57,295 |
59,825 |
Noncurrent assets |
||
Property, plant & equipment, net |
243,429 |
253,740 |
Restricted cash, net of current portion |
5,436 |
5,436 |
Noncurrent deposit/escrow account |
2,243 |
- |
Deferred mobilization costs, net of current portion |
2,209 |
- |
Drydock costs, net of current portion |
6,032 |
4,967 |
Other noncurrent assets |
2,449 |
224 |
Total noncurrent assets |
261,798 |
264,367 |
Total assets |
319,093 |
324,192 |
Current liabilities |
||
Accounts payable |
22,430 |
27,435 |
Accrued expenses |
6,278 |
7,289 |
Income taxes payable |
- |
2,926 |
Current debt |
70,000 |
45,436 |
Deferred revenue |
4,124 |
4,813 |
Total current liabilities |
102,832 |
87,899 |
Shareholders' equity |
||
Share capital |
40,195 |
39,546 |
Additional paid-in capital |
169,293 |
168,583 |
Accumulated other comprehensive loss |
(6,691) |
(6,691) |
Retained earnings |
13,464 |
34,855 |
Total shareholders' equity |
216,261 |
236,293 |
Total liabilities and shareholders' equity |
319,093 |
324,192 |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
Consolidated Statements of Cash Flows - (Unaudited) |
||||||
Six months ended June 30, |
||||||
(Thousands of US Dollars) |
2012 |
2011 |
||||
Cash flows from operating activities |
||||||
Net (loss)/income |
(11,798) |
7,023 |
||||
Adjustments to reconcile net (loss)/income to net cash |
||||||
(used in)/provided by operating activities: |
||||||
Stock-based compensation |
1,944 |
1,169 |
||||
Depreciation |
18,649 |
16,119 |
||||
Amortization of deferred financing fees |
265 |
2,333 |
||||
Loss on disposal of rig assets |
92 |
878 |
||||
Changes in operating assets and working capital |
||||||
Accounts receivable |
10,660 |
23,259 |
||||
Prepaid expenses |
(1,175) |
(1,057) |
||||
Income taxes benefit |
(3,985) |
- |
||||
Deferred mobilization costs |
(5,124) |
247 |
||||
Other current and noncurrent assets |
(6,501) |
(1,289) |
||||
Accounts payable |
(9,295) |
6,251 |
||||
Other accrued liabilities |
(1,427) |
(12,833) |
||||
Deferred revenue |
(3,289) |
(1,081) |
||||
Income taxes payable |
(2,926) |
5,679 |
||||
Other, net |
343 |
48 |
||||
Net cash (used in)/provided by operating activities |
(13,567) |
46,746 |
||||
Cash flows from investing activities |
||||||
Capital expenditures |
(4,483) |
(13,462) |
||||
Changes in restricted cash |
2,604 |
(1,000) |
||||
Changes in noncurrent deposit/escrow account |
(2,243) |
- |
||||
Net cash used in investing activities |
(4,122) |
(14,462) |
||||
Cash flows from financing activities |
||||||
Proceeds from drawdown of revolver facility |
24,564 |
39,000 |
||||
Principal payments on former revolver facility |
- |
(50,000) |
||||
Debt issuance costs |
(405) |
(900) |
||||
Payment for taxes on vested shares |
(585) |
(158) |
||||
Dividends paid |
(9,177) |
(4,659) |
||||
Net cash provided by/(used in) financing activities |
14,397 |
(16,717) |
||||
Net changes in cash and cash equivalents |
(3,292) |
15,567 |
||||
Cash and cash equivalents at beginning of period |
10,601 |
12,587 |
||||
Cash and cash equivalents at end of period |
7,309 |
28,154 |
||||
Supplemental disclosure of cash flow information |
||||||
Cash paid during the period for: |
||||||
Income taxes |
1,719 |
1,423 |
||||
Interest |
1,118 |
734 |
||||
Significant non-cash transactions during the period for: |
||||||
Accrued capital expenditures |
4,290 |
5,920 |
||||
Accrued dividends |
416 |
75 |
||||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||||
Consolidated Statements of Shareholders' Equity |
||||||||
(Unaudited) |
||||||||
Accumulated |
||||||||
Common |
Additional |
other |
||||||
shares |
Share |
paid-in |
comprehensive |
Retained |
||||
(Thousands of US Dollars) |
('000) |
capital |
capital |
loss |
earnings |
Total |
||
Balance at December 31, 2010 |
156,708 |
39,176 |
166,632 |
(6,691) |
52,470 |
251,587 |
||
Net income |
- |
- |
- |
- |
7,023 |
7,023 |
||
Issuance of restricted stock |
1,551 |
389 |
(389) |
- |
- |
- |
||
Payments for taxes on vested shares |
- |
- |
(158) |
- |
- |
(158) |
||
Stock-based compensation |
- |
- |
1,169 |
- |
- |
1,169 |
||
Common shares dividends |
- |
- |
- |
- |
(4,734) |
(4,734) |
||
Balance at June 30, 2011 |
158,259 |
39,565 |
167,254 |
(6,691) |
54,759 |
254,887 |
||
Balance at December 31, 2011 |
158,184 |
39,546 |
168,583 |
(6,691) |
34,855 |
236,293 |
||
Net loss |
- |
- |
- |
- |
(11,798) |
(11,798) |
||
Issuance of restricted stock |
2,595 |
649 |
(649) |
- |
- |
- |
||
Payments for taxes on vested shares |
- |
- |
(585) |
- |
- |
(585) |
||
Stock-based compensation |
- |
- |
1,944 |
- |
- |
1,944 |
||
Common shares dividends |
- |
- |
- |
- |
(9,593) |
(9,593) |
||
Balance at June 30, 2012 |
160,779 |
40,195 |
169,293 |
(6,691) |
13,464 |
216,261 |
||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
Reconciliation of GAAP to Non-GAAP Financial Results |
||||||
(Unaudited) |
||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||
(Thousands of US Dollars) |
Q1 2012 |
2012 |
2011 |
2012 |
2011 |
|
Net income/(loss) (GAAP) |
(14,143) |
2,345 |
4,588 |
(11,798) |
7,023 |
|
Add Back: |
||||||
Net interest expense |
632 |
791 |
2,061 |
1,423 |
3,407 |
|
Income taxes |
(5,075) |
719 |
6,842 |
(4,356) |
7,323 |
|
Depreciation |
9,398 |
9,251 |
8,175 |
18,649 |
16,119 |
|
EBITDA (Non-GAAP) |
(9,188) |
13,106 |
21,666 |
3,918 |
33,872 |
|
EBITDA is defined as Net Income/(loss) before Interest, Taxes and Depreciation |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||||
Operating Statistics |
||||||||
(Unaudited) |
||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||
Q1 2012 |
2012 |
2011 |
2012 |
2011 |
||||
Jackups (3) |
||||||||
Average rig utilization |
39% |
33% |
60% |
36% |
37% |
|||
Operating days |
106 |
91 |
164 |
197 |
199 |
|||
Average revenue per day |
63,477 |
99,996 |
71,839 |
80,346 |
67,926 |
|||
Drillship (1) |
||||||||
Average rig utilization |
45% |
95% |
0% |
74% |
0% |
|||
Operating days |
41 |
86 |
0 |
135 |
0 |
|||
Average revenue per day |
139,459 |
186,008 |
0 |
212,500 |
0 |
|||
Semisubmersible (1) |
||||||||
Average rig utilization |
0% |
80% |
100% |
40% |
100% |
|||
Operating days |
0 |
73 |
91 |
73 |
181 |
|||
Average revenue per day |
0 |
138,877 |
218,007 |
138,877 |
223,378 |
|||
Total Drilling Rigs (5) |
||||||||
Average rig utilization |
32% |
55% |
56% |
45% |
42% |
|||
Operating days |
147 |
250 |
255 |
405 |
380 |
|||
Average revenue per day |
132,104 |
140,937 |
132,801 |
134,947 |
147,871 |
|||
Floating Production Facility (1) |
||||||||
Days in period |
91 |
91 |
91 |
182 |
181 |
|||
Production days |
91 |
91 |
91 |
182 |
181 |
|||
Average bpd |
15,919 |
15,137 |
22,372 |
15,531 |
26,027 |
|||
Average tariff revenue per day |
95,515 |
90,818 |
134,230 |
93,167 |
156,161 |
|||
Average other revenue per day |
1,393 |
1,393 |
2,646 |
1,393 |
2,648 |
|||
Total average revenue per day |
96,908 |
92,211 |
136,876 |
94,560 |
158,809 |
|||
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.
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