Northern Offshore Reports Second Quarter and Six Month 2013 Financial Results and Declares Dividend
HOUSTON, Aug. 14, 2013 /PRNewswire/ --
Highlights
(All $ in USD)
- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended June 30, 2013, of $1.7 million, or $0.01 per diluted share, on revenues of $44.1 million.
- The company generated $11.7 million of second quarter EBITDA.
- The company's directors have declared a dividend of $0.05 per share, or approximately $8.2 million.
Management Comment
Gary W. Casswell, Northern Offshore's president and CEO, commented, "Second quarter earnings came in flat, as expected. Nevertheless, we are disappointed that a drilling program for the Energy Searcher has not developed as we anticipated earlier this year. The rig has just been refurbished and is ready for work. Until such time as an opportunity develops, we have reduced costs to a minimum and she will remain stacked in Singapore. The Energy Endeavour recently completed its contract with ADTI. The unit is currently undergoing its intermediate regulatory survey and we are in discussions with clients for term work in the North Sea. Our remaining units continue to perform well. The company's directors and management will continue to maintain our focus on improving the company's financial performance through strict cost control and optimizing utilization. We are currently evaluating alternatives to monetize some of the existing units and use the proceeds to invest in modern assets and support a high dividend."
Second Quarter Analysis
Net income for the three months ended June 30, 2013, was $1.7 million, or $0.01 per diluted share. This compares to net income of $2.3 million, or $0.01 per diluted share for the second quarter of 2012. Revenues for the second quarter of 2013 were $44.1 million, compared to $43.6 million for the second quarter of 2012.
For the six months ended June 30, 2013, net income was $2.7 million, or $0.02 per diluted share. For the same period in the prior year, the net loss was $11.8 million, or $0.08 per diluted share. Revenues for the first six months of 2013 were $85.5 million, compared to $71.9 million for the same period in 2012.
Revenues for the three months ended June 30, 2013, were similar to the same period of 2012, primarily because increases in dayrate revenues from the jackups Energy Enhancer and Energy Endeavour and the semisubmersible Energy Driller were offset by a decrease in revenues due to the drillship Energy Searcher being idle during the current quarter.
The tariff revenues from the Northern Producer averaged approximately $115,000 per day in the second quarter of 2013. The company expects pricing levels to remain stable and production to decrease slightly in the near term.
Depreciation expense for the second quarter of 2013 was $1.4 million lower when compared with the same period in 2012, primarily due to the disposition of the jackup Energy Exerter.
Second quarter 2013 drilling and production expenses, general and administrative expenses, interest expense, and amortization of deferred financing fees were comparable to those of the same period in 2012. Other financial items was $1.2 million higher than the same period last year, primarily due to fluctuating foreign currency exchange rates.
As of August 12, 2013, the company had an outstanding credit facility balance of $22.0 million and a cash balance of $47.2 million.
The company's directors have declared a dividend of $0.05 per share, or approximately $8.2 million. Shareholders of record with the VPS on August 30, 2013 will be entitled to receive the dividend, which will be paid on or around September 16, 2013. The shares of the company will be trading ex-dividend from August 28, 2013.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, August 15, 2013, to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call (866) 700-6293 (in the U.S.) or (617) 213-8835 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 17132085.
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 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, 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 2013 |
2013 |
2012 |
2013 |
2012 |
| Revenues |
41,413 |
44,116 |
43,626 |
85,530 |
71,864 |
| Operating expenses: |
|||||
| Drilling and production |
(30,079) |
(29,370) |
(28,981) |
(59,449) |
(64,123) |
| Depreciation |
(7,937) |
(7,828) |
(9,251) |
(15,765) |
(18,649) |
| General & administrative |
(2,011) |
(2,032) |
(1,718) |
(4,043) |
(3,629) |
| Total operating expenses |
(40,027) |
(39,230) |
(39,950) |
(79,257) |
(86,401) |
| Operating income/(loss) |
1,386 |
4,886 |
3,676 |
6,273 |
(14,537) |
| Interest expense |
(395) |
(384) |
(664) |
(780) |
(1,158) |
| Amortization of deferred financing fees |
(121) |
(122) |
(127) |
(243) |
(265) |
| Other financial items |
469 |
(1,054) |
179 |
(585) |
(194) |
| Total other expense |
(47) |
(1,560) |
(612) |
(1,608) |
(1,617) |
| Income/(loss) before taxes |
1,339 |
3,326 |
3,064 |
4,665 |
(16,154) |
| Income taxes - benefit/(expense) |
(275) |
(1,668) |
(719) |
(1,943) |
4,356 |
| Net income/(loss) |
1,064 |
1,658 |
2,345 |
2,722 |
(11,798) |
| Earnings per share (US$) |
|||||
| Basic |
0.01 |
0.01 |
0.01 |
0.02 |
(0.08) |
| Diluted |
0.01 |
0.01 |
0.01 |
0.02 |
(0.08) |
| Weighted average common shares (000's) |
|||||
| Basic |
157,060 |
157,267 |
155,891 |
157,163 |
155,791 |
| Diluted |
157,217 |
157,281 |
155,891 |
157,249 |
155,791 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||
| Consolidated Balance Sheets |
||
| (Unaudited) |
||
| (Thousands of US Dollars) |
June 30, 2013 |
December 31, 2012 |
| Current assets |
||
| Cash and cash equivalents |
20,299 |
26,504 |
| Accounts receivable, net |
31,884 |
29,386 |
| Prepaid expenses |
3,383 |
4,099 |
| Deferred mobilization costs |
1,227 |
2,209 |
| Deferred insurance premium |
3,697 |
1,869 |
| Other current assets |
1,629 |
1,711 |
| Total current assets |
62,119 |
65,778 |
| Noncurrent assets |
||
| Property, plant & equipment, net |
191,247 |
201,077 |
| Restricted cash, net of current portion |
5,436 |
5,436 |
| Noncurrent deposit/escrow account |
7,581 |
5,198 |
| Deferred mobilization costs, net of current portion |
982 |
1,596 |
| Drydock costs, net of current portion |
3,975 |
5,093 |
| Other noncurrent assets |
977 |
1,748 |
| Total noncurrent assets |
210,198 |
220,148 |
| Total assets |
272,317 |
285,926 |
| Current liabilities |
||
| Accounts payable |
13,789 |
16,760 |
| Accrued expenses |
11,647 |
9,748 |
| Income taxes payable |
1,526 |
933 |
| Current debt |
22,000 |
22,000 |
| Deferred revenue |
- |
2,062 |
| Total current liabilities |
48,962 |
51,503 |
| Shareholders' equity |
||
| Share capital |
41,018 |
40,122 |
| Additional paid-in capital |
172,619 |
170,985 |
| Accumulated other comprehensive loss |
(6,691) |
(6,691) |
| Retained earnings |
16,409 |
30,007 |
| Total shareholders' equity |
223,355 |
234,423 |
| Total liabilities and shareholders' equity |
272,317 |
285,926 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||
| Consolidated Statements of Cash Flows - (Unaudited) |
||
| Six months ended June 30, |
||
| (Thousands of US Dollars) |
2013 |
2012 |
| Cash flows from operating activities |
||
| Net income/(loss) |
2,722 |
(11,798) |
| Adjustments to reconcile net income/(loss) to net cash |
||
| provided by/(used in) operating activities: |
||
| Stock-based compensation |
2,865 |
1,944 |
| Depreciation |
15,765 |
18,649 |
| Amortization of deferred financing fees |
243 |
265 |
| (Gain)/loss on disposal of assets |
(26) |
92 |
| Changes in operating assets and working capital |
||
| Accounts receivable |
(2,498) |
10,660 |
| Prepaid expenses |
716 |
(1,175) |
| Income taxes receivable |
- |
(3,985) |
| Deferred mobilization costs |
1,596 |
(5,124) |
| Other current and noncurrent assets |
1,791 |
(6,501) |
| Accounts payable |
(7,496) |
(9,295) |
| Other accrued liabilities |
1,503 |
(1,427) |
| Deferred revenue |
(2,062) |
(3,289) |
| Income taxes payable |
593 |
(2,926) |
| Other, net |
- |
343 |
| Net cash provided by/(used in) operating activities |
15,712 |
(13,567) |
| Cash flows from investing activities |
||
| Capital expenditures |
(3,275) |
(4,483) |
| Changes in restricted cash |
- |
2,604 |
| Changes in noncurrent deposit/escrow account |
(2,383) |
(2,243) |
| Net cash used in investing activities |
(5,658) |
(4,122) |
| Cash flows from financing activities |
||
| Proceeds from drawdown of revolver facility |
- |
24,564 |
| Debt issuance costs |
- |
(405) |
| Payment for taxes on vested shares |
(335) |
(585) |
| Dividends paid |
(15,924) |
(9,177) |
| Net cash (used in)/provided by financing activities |
(16,259) |
14,397 |
| Net changes in cash and cash equivalents |
(6,205) |
(3,292) |
| Cash and cash equivalents at beginning of period |
26,504 |
10,601 |
| Cash and cash equivalents at end of period |
20,299 |
7,309 |
| Supplemental disclosure of cash flow information |
||
| Cash paid during the period for: |
||
| Income taxes |
253 |
1,719 |
| Interest |
450 |
1,118 |
| Significant non-cash transactions during the period for: |
||
| Accrued capital expenditures |
2,634 |
4,290 |
| Accrued dividends |
396 |
416 |
| 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, 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 |
| Balance at December 31, 2012 |
160,488 |
40,122 |
170,985 |
(6,691) |
30,007 |
234,423 |
| Net income |
- |
- |
- |
- |
2,722 |
2,722 |
| Issuance of restricted stock |
3,584 |
896 |
(896) |
- |
- |
- |
| Payments for taxes on vested shares |
- |
- |
(335) |
- |
- |
(335) |
| Stock-based compensation |
- |
- |
2,865 |
- |
- |
2,865 |
| Common shares dividends |
- |
- |
- |
- |
(16,320) |
(16,320) |
| Balance at June 30, 2013 |
164,072 |
41,018 |
172,619 |
(6,691) |
16,409 |
223,355 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||
| Reconciliation of GAAP to Non-GAAP Financial Results |
|||||
| (Unaudited) |
|||||
| Three Months Ended |
Six Months Ended |
||||
| June 30, |
June 30, |
||||
| (Thousands of US Dollars) |
Q1 2013 |
2013 |
2012 |
2013 |
2012 |
| Net income/(loss) (GAAP) |
1,064 |
1,658 |
2,345 |
2,722 |
(11,798) |
| Add Back: |
|||||
| Net interest expense |
516 |
506 |
791 |
1,023 |
1,423 |
| Income taxes |
275 |
1,668 |
719 |
1,943 |
(4,356) |
| Depreciation |
7,937 |
7,828 |
9,251 |
15,765 |
18,649 |
| EBITDA (Non-GAAP) |
9,792 |
11,660 |
13,106 |
21,453 |
3,918 |
| EBITDA is defined as Net Income/(Loss) before Interest, Taxes and Depreciation |
|||||
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
| Operating Statistics |
||||||
| (Unaudited) |
||||||
| Three Months Ended |
Six Months Ended |
|||||
| June 30, |
June 30, |
|||||
| Q1 2013 |
2013 |
2012 |
2013 |
2012 |
||
| Jackups (2) |
||||||
| Average rig utilization |
100% |
92% |
50% |
96% |
54% |
|
| Operating days |
180 |
167 |
91 |
347 |
197 |
|
| Average revenue per day |
105,545 |
115,839 |
99,996 |
110,499 |
80,346 |
|
| Drillship (1) |
||||||
| Average rig utilization |
0% |
0% |
95% |
0% |
74% |
|
| Operating days |
0 |
0 |
86 |
0 |
135 |
|
| Average revenue per day |
0 |
0 |
186,008 |
0 |
212,500 |
|
| Semisubmersible (1) |
||||||
| Average rig utilization |
100% |
100% |
80% |
100% |
40% |
|
| Operating days |
90 |
91 |
73 |
181 |
73 |
|
| Average revenue per day |
138,013 |
156,168 |
138,877 |
147,141 |
138,877 |
|
| Total Drilling Rigs (4) |
||||||
| Average rig utilization |
75% |
71% |
69% |
73% |
56% |
|
| Operating days |
270 |
258 |
250 |
528 |
405 |
|
| Average revenue per day |
116,368 |
130,064 |
140,937 |
123,060 |
134,947 |
|
| Floating Production Facility (1) |
||||||
| Days in period |
90 |
91 |
91 |
181 |
182 |
|
| Production days |
90 |
91 |
91 |
181 |
182 |
|
| Average bpd |
18,273 |
19,109 |
15,137 |
18,693 |
15,531 |
|
| Average tariff revenue per day |
109,636 |
114,654 |
90,818 |
112,159 |
93,167 |
|
| Average other revenue per day |
1,406 |
1,390 |
1,393 |
1,398 |
1,393 |
|
| Total average revenue per day |
111,042 |
116,044 |
92,211 |
113,557 |
94,560 |
|
| 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. |
||||||
| Note 3: Energy Exerter is excluded from Q1 2012 and Q2 2012 calculation for the jackup fleet. |
||||||
SOURCE Northern Offshore, Ltd.
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