Northern Offshore Reports Fourth Quarter and Preliminary Full Year 2013 Results
HOUSTON, Feb. 19, 2014 /PRNewswire/ --
Highlights
(All $ in USD)
- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended December 31, 2013, of $5.9 million, or $0.04 per diluted share, on revenues of $46.8 million.
- For the full year ended December 31, 2013, net income was $11.3 million, or $0.07 per diluted share.
- First of two six-month option periods exercised for the Energy Endeavour.
- Contract awarded for the Energy Searcher offshore Nigeria.
- The company's directors have declared a dividend of $0.05 per share, or approximately $8.2 million.
Fourth Quarter and Year End Analysis
The net income for the three months ended December 31, 2013, of $5.9 million, or $0.04 per diluted share, on revenues of $46.8 million, compares to net income of $13.2 million, or $0.08 per diluted share, for the fourth quarter of 2012, on revenues of $48.8 million. The financial results for the fourth quarter of 2012 included an after-tax gain of $7.5 million attributable to the sale of the jackup Energy Exerter.
The full year ended December 31, 2013, net income of $11.3 million, or $0.07 per diluted share, compares to 2012 net income of $19.2 million, or $0.12 per diluted share. Revenues in 2013 were $174.9 million, as compared to $182.8 million reported in 2012.
Revenues for the three months ended December 31, 2013, were approximately $2.0 million lower than the same period of 2012, primarily as a result of a decrease in tariff revenues from the floating production facility Northern Producer due to lower production as compared to the same period last year, partially offset by an increase in revenue from the jackup Energy Enhancer due to higher average dayrate, as Maersk exercised the first of the three one-year option periods.
The tariff from the floating production facility Northern Producer averaged approximately $100,000 per day in the fourth quarter of 2013. Production for the fourth quarter was lower compared to the prior year quarter primarily due to various maintenance operations at the field and unit level. The company expects pricing levels to remain stable and production volume to normalize in the mid-teens near term.
Drilling and production expenses for the three months ended December 31, 2013, were $3.5 million lower than the same period of last year, primarily due to lower operating expenses for the drillship Energy Searcher, partially offset by higher operating expenses for the jackup Energy Endeavour due to higher labor and repair and maintenance costs, and an increase of expenses for the floating production facility Northern Producer due to higher cleaning and inspection costs.
Fourth quarter 2013 depreciation, general and administrative expenses, interest expense, amortization of financing fees and other financial items were comparable to those of the same period in 2012.
As of February 19, 2014, the company had an outstanding Revolving Credit Facility balance of $22.0 million and a cash balance of $34.8 million, resulting in a net cash position of $12.8 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 February 28, 2014, will be entitled to receive the dividend, which will be paid on or around March 17, 2014. The shares of the company will be trading ex-dividend from February 26, 2014.
The information contained in this press release is preliminary and is subject to change until the release of the 2013 annual report when approved by the Board of Directors.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, February 20, 2014, to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call 877 415 3185 (in the U.S.) or 857 244 7328 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 45993477.
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, Southeast Asia and West Africa. The company's fleet consists of four drilling units (a drillship, a semisubmersible and two jackup drilling rigs) and one floating production facility. Additionally, the company has under construction two 350' high specification jackup drilling rigs, with delivery expected in the first and third quarters of 2016. 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:
Brian Hefty at (713) 739-7686,
or via email at [email protected]
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.
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||
| Consolidated Statements of Operations |
|||||
| (Unaudited) |
|||||
| Three Months Ended |
Twelve Months Ended |
||||
| (Thousands of US Dollars, except per share amounts) |
Q3 2013 |
2013 |
2012 |
2013 |
2012 |
| Revenues |
42,556 |
46,778 |
48,812 |
174,864 |
182,848 |
| Operating expenses: |
|||||
| Drilling and production |
(28,703) |
(27,929) |
(31,458) |
(116,236) |
(122,500) |
| Depreciation |
(8,036) |
(8,094) |
(7,767) |
(31,895) |
(34,471) |
| General & administrative |
(2,083) |
(2,139) |
(1,083) |
(8,265) |
(6,437) |
| Gain on disposal of assets |
- |
4 |
7,574 |
159 |
7,493 |
| Total operating expenses |
(38,822) |
(38,158) |
(32,734) |
(156,237) |
(155,915) |
| Operating income |
3,734 |
8,620 |
16,078 |
18,627 |
26,933 |
| Interest expense |
(369) |
(365) |
(501) |
(1,513) |
(2,406) |
| Amortization of deferred financing fees |
(123) |
(116) |
(123) |
(483) |
(512) |
| Other financial items |
(795) |
(300) |
(193) |
(1,680) |
(681) |
| Total other expense |
(1,287) |
(781) |
(817) |
(3,676) |
(3,599) |
| Income before taxes |
2,447 |
7,839 |
15,261 |
14,951 |
23,334 |
| Income taxes (expense)/benefit |
230 |
(1,934) |
(2,098) |
(3,647) |
(4,125) |
| Net income |
2,677 |
5,905 |
13,163 |
11,304 |
19,209 |
| Earnings per share (US$) |
|||||
| Basic |
0.01 |
0.04 |
0.08 |
0.07 |
0.12 |
| Diluted |
0.01 |
0.04 |
0.08 |
0.07 |
0.12 |
| Weighted average common shares (000's) |
|||||
| Basic |
157,556 |
157,625 |
156,134 |
157,377 |
155,940 |
| Diluted |
157,556 |
157,625 |
156,134 |
157,420 |
155,940 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||
| Consolidated Balance Sheets |
||
| (Unaudited) |
||
| (Thousands of US Dollars) |
December 31, |
December 31, |
| Current assets |
||
| Cash and cash equivalents |
19,537 |
26,504 |
| Restricted cash |
1,000 |
- |
| Accounts receivable, net |
25,457 |
29,386 |
| Prepaid expenses |
3,508 |
4,099 |
| Deferred mobilization costs |
2,202 |
2,209 |
| Deferred insurance premium |
1,627 |
1,869 |
| Other current assets |
1,382 |
1,711 |
| Total current assets |
54,713 |
65,778 |
| Noncurrent assets |
||
| Property, plant & equipment, net |
198,158 |
201,077 |
| Restricted cash, net of current portion |
5,436 |
5,436 |
| Noncurrent deposit/escrow account |
9,222 |
5,198 |
| Deferred mobilization costs, net of current portion |
368 |
1,596 |
| Drydock costs, net of current portion |
2,859 |
5,093 |
| Other noncurrent assets |
366 |
1,748 |
| Total noncurrent assets |
216,409 |
220,148 |
| Total assets |
271,122 |
285,926 |
| Current liabilities |
||
| Accounts payable |
9,275 |
13,377 |
| Accrued expenses |
20,196 |
13,131 |
| Income taxes payable |
1,282 |
933 |
| Affiliated debt |
22,000 |
22,000 |
| Deferred revenue |
- |
2,062 |
| Total current liabilities |
52,753 |
51,503 |
| Shareholders' equity |
||
| Share capital |
40,933 |
40,122 |
| Additional paid-in capital |
175,462 |
170,985 |
| Accumulated other comprehensive loss |
(6,691) |
(6,691) |
| Retained earnings |
8,665 |
30,007 |
| Total shareholders' equity |
218,369 |
234,423 |
| Total liabilities and shareholders' equity |
271,122 |
285,926 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||
| Consolidated Statements of Cash Flows - (Unaudited) |
||
| Twelve months ended |
||
| (Thousands of US Dollars) |
2013 |
2012 |
| Cash flows from operating activities |
||
| Net income |
11,304 |
19,209 |
| Adjustments to reconcile net income to net cash |
||
| provided by operating activities: |
||
| Stock-based compensation |
5,684 |
4,043 |
| Depreciation |
31,895 |
34,471 |
| Amortization of deferred financing fees |
483 |
512 |
| Gain on disposal of assets |
(159) |
(7,493) |
| Changes in operating assets and working capital |
||
| Accounts receivable |
3,929 |
7,263 |
| Prepaid expenses |
591 |
(1,789) |
| Deferred mobilization costs |
1,235 |
(3,449) |
| Other current and noncurrent assets |
3,617 |
(2,695) |
| Accounts payable |
(4,022) |
(18,535) |
| Other accrued liabilities |
4,384 |
5,193 |
| Deferred revenue |
(2,062) |
(2,751) |
| Income taxes payable |
349 |
(1,993) |
| Other, net |
17 |
11 |
| Net cash provided by operating activities |
57,245 |
31,997 |
| Cash flows from investing activities |
||
| Capital expenditures |
(27,191) |
(14,578) |
| Changes in restricted cash |
(1,000) |
7,604 |
| Changes in noncurrent deposit/escrow account |
(4,024) |
(5,198) |
| Proceeds from disposal of assets, net |
159 |
44,502 |
| Net cash (used in)/provided by investing activities |
(32,056) |
32,330 |
| Cash flows from financing activities |
||
| Proceeds from drawdown of revolver facility |
- |
24,564 |
| Principal payments on revolver facility |
- |
(48,000) |
| Debt issuance costs |
- |
(405) |
| Payment for taxes on vested shares |
(396) |
(1,065) |
| Dividends paid |
(31,760) |
(23,518) |
| Net cash used in financing activities |
(32,156) |
(48,424) |
| Net changes in cash and cash equivalents |
(6,967) |
15,903 |
| Cash and cash equivalents at beginning of period |
26,504 |
10,601 |
| Cash and cash equivalents at end of period |
19,537 |
26,504 |
| Supplemental disclosure of cash flow information |
||
| Cash paid during the period for: |
||
| Income taxes |
380 |
2,561 |
| Interest |
834 |
2,802 |
| Significant non-cash transactions during the period for: |
||
| Accrued capital expenditures |
1,795 |
3,592 |
| Accrued dividends |
886 |
539 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
| Consolidated Statements of Shareholders' Equity |
||||||
| (Unaudited) |
||||||
|
(Thousands of US Dollars) |
Common |
Share |
Additional paid-in capital |
Accumulated |
Retained earnings |
Total |
| Balance at December 31, 2011 |
158,184 |
39,546 |
168,583 |
(6,691) |
34,855 |
236,293 |
| Net income |
- |
- |
- |
- |
19,209 |
19,209 |
| Issuance of restricted stock |
2,304 |
576 |
(576) |
- |
- |
- |
| Payments for taxes on vested shares |
- |
- |
(1,065) |
- |
- |
(1,065) |
| Stock-based compensation |
- |
- |
4,043 |
- |
- |
4,043 |
| Common shares dividends |
- |
- |
- |
- |
(24,057) |
(24,057) |
| Balance at December 31, 2012 |
160,488 |
40,122 |
170,985 |
(6,691) |
30,007 |
234,423 |
| Balance at December 31, 2012 |
160,488 |
40,122 |
170,985 |
(6,691) |
30,007 |
234,423 |
| Net income |
- |
- |
- |
- |
11,304 |
11,304 |
| Issuance of restricted stock |
3,244 |
811 |
(811) |
- |
- |
- |
| Payments for taxes on vested shares |
- |
- |
(396) |
- |
- |
(396) |
| Stock-based compensation |
- |
- |
5,684 |
- |
- |
5,684 |
| Common shares dividends |
- |
- |
- |
- |
(32,646) |
(32,646) |
| Balance at December 31, 2013 |
163,732 |
40,933 |
175,462 |
(6,691) |
8,665 |
218,369 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||
| Reconciliation of GAAP to Non-GAAP Financial Results |
|||||
| (Unaudited) |
|||||
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||
| (Thousands of US Dollars) |
Q3 2013 |
2013 |
2012 |
2013 |
2012 |
| Net income (GAAP) |
2,677 |
5,905 |
13,163 |
11,304 |
19,209 |
| Add Back: |
|||||
| Net interest expense |
492 |
481 |
624 |
1,996 |
2,918 |
| Income taxes |
(230) |
1,934 |
2,098 |
3,647 |
4,125 |
| Depreciation |
8,036 |
8,094 |
7,767 |
31,895 |
34,471 |
| Other financial items |
795 |
300 |
193 |
1,680 |
681 |
| Adjusted EBITDA (Non-GAAP) |
11,770 |
16,714 |
23,845 |
50,522 |
61,404 |
| Adjusted EBITDA is defined as Net Income before Interest, Taxes, Depreciation and Other Financial Items |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||
| Operating Statistics |
|||||
| (Unaudited) |
|||||
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||
| Q3 2013 |
2013 |
2012 |
2013 |
2012 |
|
| Jackups (2) |
|||||
| Average rig utilization |
67% |
91% |
100% |
87% |
77% |
| Operating days |
123 |
167 |
184 |
637 |
565 |
| Average revenue per day |
133,480 |
132,046 |
103,195 |
120,586 |
94,760 |
| Drillship (1) |
|||||
| Average rig utilization |
0% |
0% |
0% |
0% |
62% |
| Operating days |
0 |
0 |
0 |
0 |
225 |
| Average revenue per day |
0 |
0 |
0 |
0 |
202,333 |
| Semisubmersible (1) |
|||||
| Average rig utilization |
100% |
100% |
100% |
100% |
70% |
| Operating days |
92 |
92 |
92 |
365 |
257 |
| Average revenue per day |
170,841 |
169,071 |
172,108 |
158,642 |
165,218 |
| Total Drilling Rigs (4) |
|||||
| Average rig utilization |
58% |
70% |
75% |
69% |
72% |
| Operating days |
215 |
259 |
276 |
1,002 |
1,047 |
| Average revenue per day |
149,467 |
145,198 |
126,456 |
134,448 |
135,172 |
| Floating Production Facility (1) |
|||||
| Days in period |
92 |
92 |
92 |
365 |
366 |
| Production days |
92 |
92 |
92 |
365 |
366 |
| Average bpd |
18,643 |
16,369 |
24,965 |
18,103 |
18,585 |
| Average tariff revenue per day |
111,855 |
98,217 |
149,789 |
108,568 |
111,509 |
| Average other revenue per day |
1,415 |
1,474 |
1,408 |
1,422 |
1,395 |
| Total average revenue per day |
113,270 |
99,691 |
151,197 |
109,990 |
112,904 |
| 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: Calculations for the jackup fleet for 2012 exclude Energy Exerter. |
SOURCE Northern Offshore, Ltd.
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