Northern Offshore Reports Third Quarter and Nine Month 2012 Financial Results and Declares Dividend
HOUSTON, Nov. 14, 2012 /PRNewswire/ --
Highlights
(All $ in USD)
- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended September 30, 2012 of $17.8 million, or $0.12 per diluted share, on revenues of $62.2 million.
- The company's directors have increased the dividend by 25%, to $0.05 per share, which represents an annualized yield in excess of 11% at yesterday's closing stock price.
- The Energy Exerter sale transaction closed on October 12, 2012.
- The company repaid $38.0 million of the outstanding credit facility balance on October 17, 2012.
Management Comment
Gary W. Casswell, Northern Offshore's president and CEO, commented, "We are pleased to report improved profitability to our shareholders this quarter. The recent sale of the jackup Energy Exerter marks a turning point for our company. Our strategy going forward is to remain opportunistic with monetizing existing units and use the proceeds to support our high dividend payout and invest in modern assets. We are currently working with our board of directors in evaluating all of our alternatives to successfully execute this strategy, including the possibility of a spinoff of the Northern Producer."
Third Quarter Analysis
Net income for the three months ended September 30, 2012 was $17.8 million, or $0.12 per diluted share. This compares to net income of $0.3 million, or $0.00 per diluted share for the third quarter of 2011. Revenues for the third quarter of 2012 were $62.2 million compared to $36.8 million for the third quarter of 2011.
For the nine months ended September 30, 2012, net income was $6.0 million, or $0.04 per diluted share. For the same period in the prior year, net income was $7.3 million, or $0.05 per diluted share. Revenues for the first nine months of 2012 were $134.0 million compared to $127.2 million for the same period in 2011.
Revenues for the three months ended September 30, 2012 were $25.4 million higher when compared to the same period of 2011, primarily due to higher utilization of the drillship Energy Searcher and semisubmersible Energy Driller, and an increase in dayrate revenues for the jackups Energy Endeavour and Energy Enhancer.
The tariff revenues from the Northern Producer averaged approximately $110,000 per day in the third quarter of 2012. The company expects pricing levels and production to remain stable in the near term.
Third quarter 2012 drilling and production expenses, depreciation, general and administrative expenses, interest income and expense, amortization of deferred financing fees and other financial items were comparable to those of the same period in 2011. Income taxes were higher in the third quarter of 2012 as compared to the same period in the previous year due to higher taxable income in the 2012 quarter.
As of November 12, 2012, the company had an outstanding credit facility balance of $32.0 million and a cash balance of $52.7 million.
The company's directors have declared a dividend of $0.05 per share, or approximately $8.0 million. Shareholders of record with the VPS on November 30, 2012 will be entitled to receive the dividend, which will be paid on or around December 14, 2012. The shares of the company will be trading ex-dividend from November 28, 2012.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CST, November 15, 2012 to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call 877-299-4454 (in the U.S.) or 617-597-5447 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 29186511.
The conference call will also 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, and 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 September 30, |
Nine Months Ended September 30, |
||||
(Thousands of US Dollars, except per share amounts) |
Q2 2012 |
2012 |
2011 |
2012 |
2011 |
Revenues |
43,626 |
62,173 |
36,806 |
134,036 |
127,183 |
Operating expenses: |
|||||
Drilling and production |
(28,981) |
(26,999) |
(27,229) |
(91,122) |
(80,042) |
Depreciation |
(9,251) |
(8,055) |
(8,907) |
(26,704) |
(25,026) |
General & administrative |
(1,718) |
(1,727) |
(1,465) |
(5,354) |
(4,755) |
Total operating expenses |
(39,950) |
(36,781) |
(37,601) |
(123,180) |
(109,823) |
Operating income/(loss) |
3,676 |
25,392 |
(795) |
10,856 |
17,360 |
Interest income |
2 |
2 |
9 |
6 |
22 |
Interest expense |
(666) |
(749) |
(367) |
(1,911) |
(1,454) |
Amortization of deferred financing fees |
(127) |
(123) |
(115) |
(389) |
(2,448) |
Other financial items |
179 |
(295) |
(195) |
(489) |
(598) |
Total other income/(expense), net |
(612) |
(1,165) |
(668) |
(2,783) |
(4,478) |
Income/(loss) before taxes |
3,064 |
24,227 |
(1,463) |
8,073 |
12,882 |
Income taxes - benefit/(expense) |
(719) |
(6,383) |
1,720 |
(2,027) |
(5,604) |
Net income |
2,345 |
17,844 |
257 |
6,046 |
7,278 |
Earnings per share (US$) |
|||||
Basic |
0.01 |
0.12 |
0.00 |
0.04 |
0.05 |
Diluted |
0.01 |
0.12 |
0.00 |
0.04 |
0.05 |
Weighted average common shares (000's) |
|||||
Basic |
155,891 |
156,046 |
155,098 |
155,875 |
154,951 |
Diluted |
155,891 |
156,046 |
155,216 |
155,875 |
155,373 |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||
Consolidated Balance Sheets |
||
(Unaudited) |
||
(Thousands of US Dollars) |
September 30, 2012 |
December 31, 2011 |
Current assets |
||
Cash and cash equivalents |
17,961 |
10,601 |
Restricted cash |
9,450 |
7,604 |
Accounts receivable, net |
35,169 |
36,649 |
Prepaid expenses |
3,658 |
2,083 |
Deferred mobilization costs |
2,559 |
246 |
Deferred insurance premium |
3,160 |
1,822 |
Assets held for sale |
35,932 |
- |
Other current assets |
1,725 |
820 |
Total current assets |
109,614 |
59,825 |
Noncurrent assets |
||
Property, plant & equipment, net |
201,000 |
253,740 |
Restricted cash, net of current portion |
5,436 |
5,436 |
Noncurrent deposit/escrow account |
3,624 |
- |
Deferred mobilization costs, net of current portion |
1,902 |
- |
Drydock costs, net of current portion |
5,693 |
4,967 |
Other noncurrent assets |
2,061 |
224 |
Total noncurrent assets |
219,716 |
264,367 |
Total assets |
329,330 |
324,192 |
Current liabilities |
||
Accounts payable |
16,072 |
27,435 |
Accrued expenses |
6,331 |
7,289 |
Income taxes payable |
715 |
2,926 |
Other payable |
4,450 |
- |
Current debt |
70,000 |
45,436 |
Deferred revenue |
3,093 |
4,813 |
Total current liabilities |
100,661 |
87,899 |
Shareholders' equity |
||
Share capital |
40,190 |
39,546 |
Additional paid-in capital |
170,293 |
168,583 |
Accumulated other comprehensive loss |
(6,691) |
(6,691) |
Retained earnings |
24,877 |
34,855 |
Total shareholders' equity |
228,669 |
236,293 |
Total liabilities and shareholders' equity |
329,330 |
324,192 |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||
Consolidated Statements of Cash Flows - (Unaudited) |
|||
Nine months ended September 30, |
|||
(Thousands of US Dollars) |
2012 |
2011 |
|
Cash flows from operating activities |
|||
Net income |
6,046 |
7,278 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||
Stock-based compensation |
3,003 |
1,918 |
|
Depreciation |
26,704 |
25,026 |
|
Amortization of deferred financing fees |
389 |
2,448 |
|
Loss on disposal of rig assets |
83 |
917 |
|
Changes in operating assets and working capital |
|||
Accounts receivable |
1,480 |
22,999 |
|
Prepaid expenses |
(1,575) |
(13) |
|
Deferred mobilization costs |
(4,215) |
(228) |
|
Other current and noncurrent assets |
(4,790) |
(907) |
|
Accounts payable |
(12,463) |
(3,436) |
|
Other payable |
4,450 |
- |
|
Other accrued liabilities |
(1,531) |
(11,984) |
|
Deferred revenue |
(1,720) |
(2,296) |
|
Income taxes payable |
(2,211) |
3,311 |
|
Other, net |
12 |
241 |
|
Net cash provided by operating activities |
13,662 |
45,274 |
|
Cash flows from investing activities |
|||
Capital expenditures |
(8,891) |
(22,691) |
|
Changes in restricted cash |
(1,846) |
(7,592) |
|
Changes in noncurrent deposit/escrow account |
(3,624) |
- |
|
Net cash used in investing activities |
(14,361) |
(30,283) |
|
Cash flows from financing activities |
|||
Proceeds from drawdown of revolver facility |
24,564 |
52,436 |
|
Principal payments on former revolver facility |
- |
(50,000) |
|
Debt issuance costs |
(405) |
(911) |
|
Payment for taxes on vested shares |
(649) |
(208) |
|
Dividends paid |
(15,451) |
(9,313) |
|
Net cash provided by/(used in) financing activities |
8,059 |
(7,996) |
|
Net changes in cash and cash equivalents |
7,360 |
6,995 |
|
Cash and cash equivalents at beginning of period |
10,601 |
12,587 |
|
Cash and cash equivalents at end of period |
17,961 |
19,582 |
|
Supplemental disclosure of cash flow information |
|||
Cash paid during the period for: |
|||
Income taxes |
1,759 |
1,848 |
|
Interest |
1,548 |
734 |
|
Significant non-cash transactions during the period for: |
|||
Accrued capital expenditures |
1,440 |
- |
|
Accrued dividends |
573 |
173 |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
Consolidated Statements of Shareholders' Equity |
||||||
(Unaudited) |
||||||
(Thousands of US Dollars) |
Common shares ('000) |
Share capital |
Additional paid-in capital |
Accumulated other comprehensive loss |
Retained earnings |
Total |
Balance at December 31, 2010 |
156,708 |
39,176 |
166,632 |
(6,691) |
52,470 |
251,587 |
Net income |
- |
- |
- |
- |
7,278 |
7,278 |
Issuance of restricted stock |
1,510 |
378 |
(378) |
- |
- |
- |
Payments for taxes on vested shares |
- |
- |
(208) |
- |
- |
(208) |
Stock-based compensation |
- |
- |
1,918 |
- |
- |
1,918 |
Common shares dividends |
- |
- |
- |
- |
(9,486) |
(9,486) |
Balance at September 30, 2011 |
158,218 |
39,554 |
167,964 |
(6,691) |
50,262 |
251,089 |
Balance at December 31, 2011 |
158,184 |
39,546 |
168,583 |
(6,691) |
34,855 |
236,293 |
Net income |
- |
- |
- |
- |
6,046 |
6,046 |
Issuance of restricted stock |
2,577 |
644 |
(644) |
- |
- |
- |
Payments for taxes on vested shares |
- |
- |
(649) |
- |
- |
(649) |
Stock-based compensation |
- |
- |
3,003 |
- |
- |
3,003 |
Common shares dividends |
- |
- |
- |
- |
(16,024) |
(16,024) |
Balance at September 30, 2012 |
160,761 |
40,190 |
170,293 |
(6,691) |
24,877 |
228,669 |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||
Reconciliation of GAAP to Non-GAAP Financial Results |
|||||
(Unaudited) |
|||||
Three Months Ended |
Nine Months Ended |
||||
September 30, |
September 30, |
||||
(Thousands of US Dollars) |
Q2 2012 |
2012 |
2011 |
2012 |
2011 |
Net income (GAAP) |
2,345 |
17,844 |
257 |
6,046 |
7,278 |
Add Back: |
|||||
Net interest expense |
791 |
870 |
473 |
2,294 |
3,880 |
Income taxes |
719 |
6,383 |
(1,720) |
2,027 |
5,604 |
Depreciation |
9,251 |
8,055 |
8,907 |
26,704 |
25,026 |
EBITDA (Non-GAAP) |
13,106 |
33,152 |
7,917 |
37,071 |
41,788 |
EBITDA is defined as Net Income/(loss) before Interest, Taxes and Depreciation |
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
Operating Statistics |
||||||
(Unaudited) |
||||||
Three Months Ended |
Nine Months Ended |
|||||
September 30, |
September 30, |
|||||
Q2 2012 |
2012 |
2011 |
2012 |
2011 |
||
Jackups (3) |
||||||
Average rig utilization |
33% |
67% |
67% |
46% |
47% |
|
Operating days |
91 |
184 |
184 |
381 |
383 |
|
Average revenue per day |
99,996 |
101,756 |
72,196 |
90,686 |
69,977 |
|
Drillship (1) |
||||||
Average rig utilization |
95% |
98% |
0% |
82% |
0% |
|
Operating days |
86 |
90 |
0 |
225 |
0 |
|
Average revenue per day |
186,008 |
186,194 |
0 |
201,977 |
0 |
|
Semisubmersible (1) |
||||||
Average rig utilization |
80% |
100% |
67% |
60% |
89% |
|
Operating days |
73 |
92 |
62 |
165 |
243 |
|
Average revenue per day |
138,877 |
179,229 |
167,638 |
161,376 |
209,157 |
|
Total Drilling Rigs (5) |
||||||
Average rig utilization |
55% |
80% |
54% |
56% |
46% |
|
Operating days |
250 |
366 |
246 |
771 |
626 |
|
Average revenue per day |
140,937 |
141,994 |
96,251 |
138,292 |
127,586 |
|
Floating Production Facility (1) |
||||||
Days in period |
91 |
92 |
92 |
274 |
273 |
|
Production days |
91 |
92 |
92 |
274 |
273 |
|
Average bpd |
15,137 |
18,250 |
20,963 |
16,437 |
24,320 |
|
Average tariff revenue per day |
90,818 |
109,514 |
125,780 |
98,655 |
145,923 |
|
Average other revenue per day |
1,393 |
1,387 |
5,520 |
1,391 |
3,616 |
|
Total average revenue per day |
92,211 |
110,901 |
131,300 |
100,046 |
149,539 |
|
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. |
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SOURCE Northern Offshore, Ltd.
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