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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