Northern Offshore Reports Fourth Quarter and Preliminary Full Year 2014 Results
HOUSTON, Feb. 18, 2015 /PRNewswire/ --
Highlights
(All $ in USD)
- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended December 31, 2014, of $11.5 million, or $0.07 per diluted share, on revenues of $77.8 million.
- For the full year ended December 31, 2014, net income was $35.9 million, or $0.23 per diluted share, on revenues of $246.3 million.
- The Company generated adjusted EBITDA of $22.9 million in the fourth quarter and $78.3 million for the full year
Management Comment
Gary W. Casswell, Northern Offshore's President and CEO, commented;
"I am very pleased with the financial and operational performance delivered by our organization for the fourth quarter and the full year 2014. Our results exceeded those of each of the preceding three years. I am proud of the individual and collective efforts of everyone in the Company who contributed to this significant achievement.
Looking further down the road in 2015, we see a challenging market environment for the Company and the oil services sector generally due to the rapid decline in commodity prices and the resultant reduction in our clients' capital spending. During this period, I am confident our experienced management team will maintain our focus on capital discipline and cost control.
With respect to the dividend policy, I would note that since the Company began paying dividends in June 2011, a total of $0.64 per share or approximately $100 million has been distributed to the shareholders. However, after careful consideration of the Company's need for financial flexibility during this period of excess offshore rig supply, the Board of Directors has chosen not to declare a dividend for the previous quarter. As in the past, the future dividend policy will be reviewed by the Board on a quarterly basis."
Fourth Quarter and Year End Analysis
Net income for the three months ended December 31, 2014, was $11.5 million, or $0.07 per diluted share, on revenues of $77.8 million, compares to net income of $5.9 million, or $0.04 per diluted share on revenues of $46.8 million for the fourth quarter of 2013.
Net income for the full year ended December 31, 2014, was $35.9 million, or $0.23 per diluted share, compares to 2013 net income of $11.3 million, or $0.07 per diluted share. Revenues in 2014 were $246.3 million, as compared to $174.9 million reported in 2013.
Revenues for the three months ended December 31, 2014, were approximately $31.0 million higher than the same period of 2013, primarily due to the dayrate revenues and mobilization fees earned by the drillship Energy Searcher's contract in offshore Nigeria coupled with higher utilization and dayrate increases for the jackup fleet, partially offset by lower tariff revenues from the Northern Producer.
Tariff revenue from the floating production facility Northern Producer was lower in comparison to the prior year quarter due to a combination of production decline and lower tariff rates resulting from the fall in the price of N. Sea Brent.
Drilling and production expenses for the fourth quarter of 2014 were $25.1 million higher when compared with the same period in 2013, primarily due to the increase in operating and mobilization costs related to the drillship Energy Searcher, partially offset by lower maintenance and inspection expenditures for the floating production facility Northern Producer.
Fourth quarter 2014 depreciation, general and administrative expenses, interest expense, amortization of financing fees were comparable to those of the same period in 2013. Other financial items were $0.7 million lower than the same period last year due to favorable foreign currency exchange rates fluctuations with income taxes approximately $1 million higher due to the growth in pretax income.
As of February 17, 2015, the company had an outstanding Revolving Credit Facility balance of $29.0 million and a cash balance of $36.2 million, resulting in a net cash position of $7.2 million. The Company's accounts receivable position of $48.9 million at the end of December 31, 2014 was higher compared to the prior year balance primarily due to the Energy Searcher's contract in offshore Nigeria.
The information contained in this press release is preliminary and is subject to change until the release of the 2014 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 19, 2015, to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call 1-800-299-8538 (in the U.S.) or +1-617-786-2902 (toll free or outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 18796116.
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 contract delivery 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:
Paul Ravesies 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 2014 |
2014 |
2013 |
2014 |
2013 |
| Revenues |
63,555 |
77,767 |
46,778 |
246,285 |
174,864 |
| Operating expenses: |
|||||
| Drilling and production |
(46,764) |
(52,989) |
(27,929) |
(160,229) |
(116,077) |
| Depreciation |
(8,429) |
(8,552) |
(8,094) |
(33,574) |
(31,895) |
| General & administrative |
(1,771) |
(1,913) |
(2,135) |
(7,736) |
(8,265) |
| Total operating expenses |
(56,964) |
(63,454) |
(38,158) |
(201,539) |
(156,237) |
| Operating income |
6,591 |
14,313 |
8,620 |
44,746 |
18,627 |
| Interest expense |
(556) |
(391) |
(365) |
(1,917) |
(1,513) |
| Amortization of deferred financing fees |
- |
- |
(116) |
(161) |
(483) |
| Other financial items |
295 |
446 |
(300) |
228 |
(1,680) |
| Total other expense |
(261) |
55 |
(781) |
(1,850) |
(3,676) |
| Income before taxes |
6,330 |
14,368 |
7,839 |
42,896 |
14,951 |
| Income taxes expense |
(1,141) |
(2,911) |
(1,934) |
(6,968) |
(3,647) |
| Net income |
5,189 |
11,457 |
5,905 |
35,928 |
11,304 |
| Earnings per share (US$) |
|||||
| Basic |
0.03 |
0.07 |
0.04 |
0.23 |
0.07 |
| Diluted |
0.03 |
0.07 |
0.04 |
0.23 |
0.07 |
| Weighted average common shares (000's) |
|||||
| Basic |
159,595 |
159,622 |
157,625 |
159,394 |
157,377 |
| Diluted |
160,483 |
159,622 |
157,625 |
159,640 |
157,420 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||
| Consolidated Balance Sheets |
||
| (Unaudited) |
||
| (Thousands of US Dollars) |
December 31, |
December 31, |
| Current assets |
||
| Cash and cash equivalents |
16,604 |
19,537 |
| Restricted cash |
6,436 |
1,000 |
| Accounts receivable, net |
48,909 |
24,158 |
| Prepaid expenses |
3,425 |
3,508 |
| Deferred mobilization costs |
368 |
2,202 |
| Deferred insurance premium |
1,855 |
1,627 |
| Other current assets |
366 |
1,382 |
| Total current assets |
77,963 |
53,414 |
| Noncurrent assets |
||
| Property, plant & equipment - existing fleet, net |
155,267 |
180,329 |
| Property, plant & equipment - newbuild jackups |
84,924 |
17,829 |
| Restricted cash, net of current portion |
- |
5,436 |
| Noncurrent deposit/escrow account |
12,034 |
9,222 |
| Deferred mobilization costs, net of current portion |
- |
368 |
| Drydock costs, net of current portion |
1,085 |
2,859 |
| Other noncurrent assets |
1,154 |
1,665 |
| Total noncurrent assets |
254,464 |
217,708 |
| Total assets |
332,427 |
271,122 |
| Current liabilities |
||
| Accounts payable |
11,973 |
9,275 |
| Accrued expenses |
15,507 |
20,196 |
| Income taxes payable |
2,775 |
1,282 |
| Affiliated debt |
29,000 |
22,000 |
| Total current liabilities |
59,255 |
52,753 |
| Non-current liabilities |
||
| Other long-term liabilities |
47,793 |
- |
| Total liabilities |
107,048 |
52,753 |
| Shareholders' equity |
||
| Share capital |
41,117 |
40,933 |
| Additional paid-in capital |
179,252 |
175,462 |
| Accumulated other comprehensive loss |
(6,691) |
(6,691) |
| Retained earnings |
11,701 |
8,665 |
| Total shareholders' equity |
225,379 |
218,369 |
| Total liabilities and shareholders' equity |
332,427 |
271,122 |
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
||||||
| Consolidated Statements of Cash Flows - (Unaudited) |
||||||
| Twelve months ended |
||||||
| (Thousands of US Dollars) |
2014 |
2013 |
||||
| Cash flows from operating activities |
||||||
| Net income |
35,928 |
11,304 |
||||
| Adjustments to reconcile net income to net cash |
||||||
| provided by operating activities: |
||||||
| Stock-based compensation |
4,954 |
5,684 |
||||
| Depreciation |
33,574 |
31,895 |
||||
| Amortization of deferred financing fees |
161 |
483 |
||||
| Gain on disposal of assets |
(313) |
(159) |
||||
| Changes in operating assets and working capital |
||||||
| Accounts receivable |
(24,751) |
5,228 |
||||
| Prepaid expenses |
83 |
591 |
||||
| Deferred mobilization costs |
2,202 |
1,235 |
||||
| Other current and noncurrent assets |
3,009 |
2,236 |
||||
| Accounts payable |
2,304 |
(3,940) |
||||
| Other accrued liabilities |
(4,709) |
4,384 |
||||
| Deferred revenue |
- |
(2,062) |
||||
| Income taxes payable |
1,493 |
366 |
||||
| Net cash provided by operating activities |
53,935 |
57,245 |
||||
| Cash flows from investing activities |
||||||
| Capital expenditures - existing fleet |
(8,700) |
(9,362) |
||||
| Capital expenditures - newbuild jackups |
(18,816) |
(17,829) |
||||
| Changes in restricted cash |
- |
(1,000) |
||||
| Changes in noncurrent deposit/escrow account |
(2,812) |
(4,024) |
||||
| Proceeds from disposal of assets, net |
313 |
159 |
||||
| Net cash used in investing activities |
(30,015) |
(32,056) |
||||
| Cash flows from financing activities |
||||||
| Proceeds from drawdown of revolver facility |
25,000 |
- |
||||
| Principal payments on revolver facility |
(18,000) |
- |
||||
| Payment for taxes on vested shares |
(979) |
(396) |
||||
| Dividends paid |
(32,874) |
(31,760) |
||||
| Net cash used in financing activities |
(26,853) |
(32,156) |
||||
| Net changes in cash and cash equivalents |
(2,933) |
(6,967) |
||||
| Cash and cash equivalents at beginning of period |
19,537 |
26,504 |
||||
| Cash and cash equivalents at end of period |
16,604 |
19,537 |
||||
| Supplemental disclosure of cash flow information |
||||||
| Cash paid during the period for: |
||||||
| Income taxes |
1,928 |
787 |
||||
| Interest |
852 |
834 |
||||
| Significant non-cash transactions during the period for: |
||||||
| Accrued capital expenditures |
48,090 |
1,795 |
||||
| Accrued dividends |
19 |
886 |
||||
| 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, 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 |
||
| Balance at December 31, 2013 |
163,732 |
40,933 |
175,462 |
(6,691) |
8,665 |
218,369 |
||
| Net income |
- |
- |
- |
- |
35,928 |
35,928 |
||
| Issuance of restricted stock |
738 |
184 |
(184) |
- |
- |
- |
||
| Payments for taxes on vested shares |
- |
- |
(979) |
- |
- |
(979) |
||
| Stock-based compensation |
- |
- |
4,954 |
- |
- |
4,954 |
||
| Common shares dividends |
- |
- |
- |
- |
(32,893) |
(32,893) |
||
| Balance at December 31, 2014 |
164,470 |
41,117 |
179,253 |
(6,691) |
11,700 |
225,379 |
||
| NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
|||||
| Reconciliation of GAAP to Non-GAAP Financial Results |
|||||
| (Unaudited) |
|||||
| Three Months Ended |
Twelve Months Ended |
||||
| December 31, |
December 31, |
||||
| (Thousands of US Dollars) |
Q3 2014 |
2014 |
2013 |
2014 |
2013 |
| Net income (GAAP) |
5,189 |
11,457 |
5,905 |
35,928 |
11,304 |
| Add Back: |
|||||
| Net interest expense |
556 |
391 |
481 |
2,078 |
1,996 |
| Income taxes |
1,141 |
2,911 |
1,934 |
6,968 |
3,647 |
| Depreciation |
8,429 |
8,552 |
8,094 |
33,574 |
31,895 |
| Other financial items |
(295) |
(446) |
300 |
(228) |
1,680 |
| Adjusted EBITDA (Non-GAAP) |
15,020 |
22,865 |
16,714 |
78,320 |
50,522 |
| 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 |
Twelve Months Ended |
|||||
| December 31, |
December 31, |
|||||
| Q3 2014 |
2014 |
2013 |
2014 |
2013 |
||
| Jackups (2) |
||||||
| Average rig utilization |
100% |
100% |
91% |
100% |
87% |
|
| Operating days |
184 |
184 |
167 |
730 |
637 |
|
| Average revenue per day |
147,504 |
146,904 |
132,046 |
142,794 |
120,586 |
|
| Drillship (1) |
||||||
| Average rig utilization |
100% |
100% |
0% |
56% |
0% |
|
| Operating days |
92 |
92 |
0 |
205 |
0 |
|
| Average revenue per day |
147,626 |
323,350 |
0 |
240,563 |
0 |
|
| Semisubmersible (1) |
||||||
| Average rig utilization |
100% |
100% |
100% |
100% |
100% |
|
| Operating days |
92 |
92 |
92 |
365 |
365 |
|
| Average revenue per day |
160,294 |
166,123 |
169,071 |
167,910 |
158,642 |
|
| Total Drilling Rigs (4) |
||||||
| Average rig utilization |
100% |
100% |
70% |
89% |
69% |
|
| Operating days |
368 |
368 |
259 |
1,300 |
1,002 |
|
| Average revenue per day |
150,732 |
195,820 |
145,198 |
165,263 |
134,448 |
|
| Floating Production Facility (1) |
||||||
| Days in period |
92 |
92 |
92 |
365 |
365 |
|
| Production days |
92 |
92 |
92 |
365 |
365 |
|
| Average bpd |
14,392 |
11,665 |
16,369 |
14,498 |
18,103 |
|
| Average tariff revenue per day |
86,353 |
60,556 |
98,217 |
84,608 |
108,568 |
|
| Average other revenue per day |
1,535 |
1,451 |
1,474 |
1,536 |
1,422 |
|
| Total average revenue per day |
87,888 |
62,007 |
99,691 |
86,144 |
109,990 |
|
| 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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