HOUSTON, May 15, 2012 /PRNewswire/ --
Highlights
- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported a net loss for the three months ended March 31, 2012 of US$14.1 million, or US$0.09 per diluted share, on revenues of US$28.2 million.
- The company's directors have declared a dividend of US$0.03 per share, or approximately US$5 million.
- The Revolving Credit Facility increased to US$75 million.
- The Energy Searcher and Energy Driller commenced new contracts.
Management Comment
Gary W. Casswell, Northern Offshore's president and CEO, commented, "As expected, we incurred a loss during the first quarter due to idle time and costs associated with the preparation of three of our five rigs for previously announced new contracts. With two of the three rigs now on contract, and the third rig anticipated to commence its new contract shortly, we expect improved cash flow for the remainder of the year. Our board of directors recently approved an increase in our credit line to provide us with financial flexibility as we emerge from this transition period, and the continuation of the dividend program is a testament to our director's confidence in the company's outlook."
First Quarter Analysis
The net loss for the three months ended March 31, 2012 of US$14.1 million, or US$0.09 per diluted share, on revenues of US$28.2 million compares to net income of US$2.4 million, or US$0.02 per diluted share, for the first quarter of 2011, on revenues of US$40.5 million.
Revenues for the three months ending March 31, 2012 were US$12.2 million lower than the same period in 2011, primarily due to lower utilization of the semisubmersible Energy Driller and a decrease in tariff revenues from the floating production facility Northern Producer due to lower production compared to the same period last year. Partially offsetting these decreases were revenues from higher utilization for the drillship Energy Searcher and the jackup Energy Endeavour as compared to the same period last year.
The tariff from the floating production facility Northern Producer averaged approximately US$96,000 per day in first quarter of 2012. The company expects pricing levels to remain stable and production to decline slightly in the near term.
Drilling and production expenses for the three months ending March 31, 2012 were US$8.7 million higher compared to the same period in 2011 primarily due to mobilization costs for the jackup Energy Exerter to move from Malta to Rotterdam; anchor chains repair costs for the floating production facility Northern Producer; and costs associated with preparing the fleet for new drilling programs.
Depreciation expense for the three months ended March 31, 2012 was US$1.5 million higher due to higher depreciable basis primarily for the drillship Energy Searcher and semisubmersible Energy Driller, when compared with the same period in 2011. First quarter 2012 general and administrative expenses, interest income and expense, amortization of financing fees and other financial items were comparable to those of the same period in 2011.
As of May 14, 2012, the company had an outstanding facility balance of US$60.0 million and a cash balance of US$23.1 million.
The company's directors have declared a dividend of US$0.03 per share, or approximately US$5 million. Shareholders of record with the VPS on May 31, 2012 will be entitled to receive the dividend, which will be paid on or around June 15, 2012. The shares of the company will be trading ex-dividend from May 29, 2012.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, May 16, 2012 to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call (866) 713-8567 (in the U.S.) or (617) 597-5326 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 37307107.
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 March 31, |
|||||||
(Thousands of US Dollars, except per share amounts) |
Q4 2011 |
2012 |
2011 |
||||
Revenues |
33,938 |
28,238 |
40,452 |
||||
Operating expenses: |
|||||||
Drilling and production |
(36,280) |
(35,142) |
(26,423) |
||||
Depreciation |
(9,141) |
(9,398) |
(7,944) |
||||
General & administrative |
(1,043) |
(1,911) |
(1,752) |
||||
Total operating expenses |
(46,464) |
(46,451) |
(36,119) |
||||
Operating income/(loss) |
(12,526) |
(18,213) |
4,333 |
||||
Interest income |
6 |
2 |
6 |
||||
Interest expense |
(596) |
(496) |
(601) |
||||
Amortization of deferred financing fees |
(144) |
(138) |
(751) |
||||
Other financial items |
(811) |
(373) |
(71) |
||||
Total other income/(expense), net |
(1,545) |
(1,005) |
(1,417) |
||||
Loss before taxes |
(14,071) |
(19,218) |
2,916 |
||||
Income taxes - benefit/(expense) |
3,409 |
5,075 |
(481) |
||||
Net income/(loss) |
(10,662) |
(14,143) |
2,435 |
||||
Earnings per share (US$) |
|||||||
Basic |
(0.07) |
(0.09) |
0.02 |
||||
Diluted |
(0.07) |
(0.09) |
0.02 |
||||
Weighted average common shares (000's) |
|||||||
Basic |
155,220 |
155,689 |
154,747 |
||||
Diluted |
155,220 |
155,689 |
155,258 |
||||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||
Consolidated Balance Sheets |
|||
(Unaudited) |
|||
(Thousands of US Dollars) |
March 31, |
December 31, |
|
Current assets |
|||
Cash and cash equivalents |
10,138 |
10,601 |
|
Restricted cash |
- |
7,604 |
|
Account receivables, net |
19,208 |
36,649 |
|
Prepaid expenses |
2,914 |
2,083 |
|
Deferred mobilization costs |
2,376 |
246 |
|
Deferred insurance premium |
1,504 |
1,822 |
|
Other current assets |
4,159 |
820 |
|
Total current assets |
40,299 |
59,825 |
|
Noncurrent assets |
|||
Property, plant & equipment, net |
247,045 |
253,740 |
|
Restricted cash, net of current portion |
10,436 |
5,436 |
|
Noncurrent deposit/escrow account |
915 |
- |
|
Deferred mobilization cost, net of current portion |
2,209 |
- |
|
Other noncurrent assets |
5,088 |
5,191 |
|
Total noncurrent assets |
265,693 |
264,367 |
|
Total assets |
305,992 |
324,192 |
|
Current liabilities |
|||
Accounts payable |
23,214 |
27,435 |
|
Accrued expenses |
5,005 |
7,289 |
|
Income tax payable |
- |
2,926 |
|
Current debt |
60,000 |
45,436 |
|
Deferred revenue |
- |
4,813 |
|
Total current liabilities |
88,219 |
87,899 |
|
Total liabilities |
88,219 |
87,899 |
|
Shareholders' equity |
|||
Share capital |
40,115 |
39,546 |
|
Additional paid-in capital |
168,450 |
168,583 |
|
Accumulated other comprehensive loss |
(6,691) |
(6,691) |
|
Retained earnings |
15,899 |
34,855 |
|
Total shareholders' equity |
217,773 |
236,293 |
|
Total liabilities and shareholders' equity |
305,992 |
324,192 |
|
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||||
Consolidated Statements of Cash Flows - (Unaudited) |
||||||||
Three months ended |
||||||||
(Thousands of US Dollars) |
2012 |
2011 |
||||||
Cash flows from operating activities |
||||||||
Net (loss)/gain |
(14,143) |
2,435 |
||||||
Adjustments to reconcile net (loss)/gain to net cash |
||||||||
(used in)/provided by operating activities: |
||||||||
Stock-based compensation |
999 |
860 |
||||||
Depreciation |
9,398 |
7,944 |
||||||
Amortization of deferred financing fees |
138 |
751 |
||||||
(Gain)/loss on disposal of rig assets |
(22) |
1,176 |
||||||
Changes in operating assets and working capital |
||||||||
Accounts receivable |
17,441 |
13,207 |
||||||
Prepaid expenses |
(831) |
1,211 |
||||||
Income tax benefits |
(3,625) |
- |
||||||
Other current and noncurrent assets |
(3,360) |
(1,735) |
||||||
Accounts payable |
(5,910) |
4,029 |
||||||
Other accrued liabilities |
(2,284) |
(6,460) |
||||||
Deferred revenue |
(4,813) |
(164) |
||||||
Income tax payable |
(2,926) |
(1,561) |
||||||
Other, net |
- |
132 |
||||||
Net cash (used in)/provided by operating activities |
(9,938) |
21,825 |
||||||
Cash flows from investing activities |
||||||||
Capital expenditures |
(1,402) |
(1,930) |
||||||
Changes in restricted cash, net |
2,604 |
- |
||||||
Changes in noncurrent deposit/escrow account |
(915) |
- |
||||||
Net cash provided by/(used in) investing activities |
287 |
(1,930) |
||||||
Cash flows from financing activities |
||||||||
Proceeds from drawdown of new revolver facility |
14,564 |
- |
||||||
Principal payment on former revolver facility |
- |
(18,000) |
||||||
Payment for taxes on vested shares |
(563) |
(158) |
||||||
Dividends paid |
(4,813) |
- |
||||||
Net cash provided by/(used in) financing activities |
9,188 |
(18,158) |
||||||
Net changes in cash and cash equivalents |
(463) |
1,737 |
||||||
Cash and cash equivalents at beginning of period |
10,601 |
12,587 |
||||||
Cash and cash equivalents at end of period |
10,138 |
14,324 |
||||||
Supplemental disclosure of cash flow information |
||||||||
Cash paid during the period for: |
||||||||
Income taxes |
1,126 |
692 |
||||||
Interest |
- |
424 |
||||||
Significant non-cash transactions during the period for: |
||||||||
Accrued capital expenditures |
1,279 |
12,145 |
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 January 1, 2011 |
156,708 |
39,176 |
166,632 |
(6,691) |
52,470 |
251,587 |
||
Net loss |
- |
- |
- |
- |
(3,385) |
(3,385) |
||
Issuance of restricted stock |
1,476 |
370 |
(370) |
- |
- |
- |
||
Payments for taxes on vested shares |
- |
- |
(435) |
- |
- |
(435) |
||
Stock-based compensation |
- |
- |
2,756 |
- |
- |
2,756 |
||
Common shares dividends |
- |
- |
- |
- |
(14,230) |
(14,230) |
||
Balance at December 31, 2011 |
158,184 |
39,546 |
168,583 |
(6,691) |
34,855 |
236,293 |
||
Net loss |
- |
- |
- |
- |
(14,143) |
(14,143) |
||
Issuance of restricted stock |
2,277 |
569 |
(569) |
- |
- |
- |
||
Payments for taxes on vested shares |
- |
- |
(563) |
- |
- |
(563) |
||
Stock-based compensation |
- |
- |
999 |
- |
- |
999 |
||
Common shares dividends |
- |
- |
- |
- |
(4,813) |
(4,813) |
||
Balance at March 31, 2012 |
160,461 |
40,115 |
168,450 |
(6,691) |
15,899 |
217,773 |
||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
Reconciliation of GAAP to Non-GAAP Financial Results |
||||||
(Unaudited) |
||||||
Three Months Ended |
||||||
March 31, |
||||||
(Thousands of US Dollars) |
Q4 2011 |
2012 |
2011 |
|||
Net income/(loss) (GAAP) |
(10,662) |
(14,143) |
2,435 |
|||
Add Back: |
||||||
Net interest expense |
734 |
632 |
1,346 |
|||
Income taxes |
(3,409) |
(5,075) |
481 |
|||
Depreciation |
9,141 |
9,398 |
7,944 |
|||
EBITDA (Non-GAAP) |
(4,196) |
(9,188) |
12,206 |
|||
EBITDA is defined as Net Income/(loss) before Interest, Taxes and Depreciation |
||||||
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||||
Operating Statistics |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
|||||||
March 31, |
|||||||
Q4 2011 |
2012 |
2011 |
|||||
Jackups (3) |
|||||||
Average rig utilization |
67% |
39% |
13% |
||||
Operating days |
184 |
106 |
35 |
||||
Average revenue per day |
69,695 |
63,477 |
49,588 |
||||
Drillship (1) |
|||||||
Average rig utilization |
58% |
45% |
0% |
||||
Operating days |
53 |
41 |
0 |
||||
Average revenue per day |
105,306 |
139,459 |
0 |
||||
Semisubmersible (1) |
|||||||
Average rig utilization |
0% |
0% |
100% |
||||
Operating days |
0 |
0 |
90 |
||||
Average revenue per day |
0 |
0 |
228,809 |
||||
Total Drilling Rigs (5) |
|||||||
Average rig utilization |
52% |
32% |
28% |
||||
Operating days |
237 |
147 |
125 |
||||
Average revenue per day |
94,988 |
132,104 |
178,613 |
||||
Floating Production Facility (1) |
|||||||
Days in period |
92 |
91 |
90 |
||||
Production days |
92 |
91 |
90 |
||||
Average bpd |
21,653 |
15,919 |
29,722 |
||||
Average tariff revenue per day |
129,921 |
95,515 |
178,336 |
||||
Average other revenue per day |
(5,190) |
1,393 |
2,649 |
||||
Total average revenue per day |
124,731 |
96,908 |
180,985 |
||||
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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