HOUSTON, Aug. 25 /PRNewswire-FirstCall/ -- Northern Offshore, Ltd. (Oslo Bors: NOF.OL) reported a net loss for the three months ended June 30, 2010 of US$0.5 million, or US$0.0 per diluted share. This compares to net income of US$22.8 million, or US$0.15 per diluted share for the second quarter of 2009. Revenues for the second quarter of 2010 were US$48.9 million compared to US$73.4 million for the second quarter of 2009.
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For the six months ended June 30, 2010, net income was US$22.7 million or US$0.15 per diluted share. For the same period in the prior year, net income was US$26.4 million or US$0.17 per diluted share. Net income for the first quarter of 2009 included a US$3.7 charge to bad debt expense. Excluding that charge, the first six months of 2009 net income would have been US$30.1 million, or US$0.20 per diluted share. Revenues for the first six months of 2010 were US$116.9 million compared to US$129.9 million for the same period in 2009.
Northern Offshore President and CEO Gary Casswell commented "The loss of revenue, as well as the repair costs, attributable to the drillship Energy Searcher undergoing repairs during the second quarter was unfortunate. The financial results were noticeably affected by this event. We are obviously pleased to have the rig back on location and under normal operations."
Second Quarter Analysis
Revenues for the three months ended June 30, 2010 were lower by approximately US$24.5 million as compared to the same period of 2009, primarily due to lower utilization for the jackup fleet. This decline was partially offset by higher production tariff from the Northern Producer floating production facility as well as income from the management services contract in Azerbaijan.
Drilling and production expenses for the second quarter of 2010 were at a level similar to the same period in 2009, as were General and Administrative expenses. Amortization of drilling contract intangibles declined by US$2.0 million compared to the same period last year, as the intangibles were fully amortized in the third quarter of 2009. Depreciation expense declined by US$1.5 million from the second quarter of 2009 due to the extension of the useful life of the floating production facility Northern Producer and a change of estimate of the fleet's salvage value.
Conference Call Information
Northern Offshore, Ltd will conduct a teleconference with security analysts at 9 a.m. CT, August 26, 2010 to discuss the company's quarterly financial results. Individuals wishing to participate in the teleconference should call (800) 706-7749 (in the U.S.) or (617) 614-3474 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 96564668.
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 Months Ended |
Six Months Ended |
|||||
(Thousands of US Dollars, except per share amounts) |
Q1 2010 |
2010 |
2009 |
2010 |
2009 |
|
Revenue |
68,090 |
48,855 |
73,352 |
116,945 |
129,905 |
|
Operating expenses: |
||||||
Drilling and production |
(22,709) |
(29,191) |
(28,934) |
(51,900) |
(57,927) |
|
Depreciation |
(14,068) |
(14,669) |
(16,225) |
(28,737) |
(31,998) |
|
General & administrative |
(2,319) |
(2,371) |
(2,299) |
(4,690) |
(4,030) |
|
Bad debt |
- |
- |
(233) |
- |
(3,897) |
|
Total operating expenses |
(39,096) |
(46,231) |
(47,691) |
(85,327) |
(97,852) |
|
Operating income |
28,994 |
2,624 |
25,661 |
31,618 |
32,053 |
|
Interest income |
37 |
28 |
112 |
65 |
202 |
|
Interest expense |
(2,395) |
(1,743) |
(2,718) |
(4,138) |
(5,968) |
|
Amortization of drilling contract intangibles |
- |
- |
2,018 |
- |
4,036 |
|
Amortization of deferred financing fees |
(351) |
(678) |
(397) |
(1,029) |
(794) |
|
Other financial items |
(24) |
(312) |
409 |
(336) |
(355) |
|
Total other income/(expense), net |
(2,733) |
(2,705) |
(576) |
(5,438) |
(2,879) |
|
Income before taxes |
26,261 |
(81) |
25,085 |
26,180 |
29,174 |
|
Income taxes - (expense)/benefit |
(3,081) |
(444) |
(2,293) |
(3,525) |
(2,762) |
|
Net income/ (loss) |
23,180 |
(525) |
22,792 |
22,655 |
26,412 |
|
Earnings per share (US$) |
||||||
Basic |
0.15 |
(0.00) |
0.15 |
0.15 |
0.17 |
|
Diluted |
0.15 |
(0.00) |
0.15 |
0.15 |
0.17 |
|
Weighted average common shares (000’s) |
||||||
Basic |
154,032 |
154,489 |
153,108 |
154,261 |
153,104 |
|
Diluted |
156,116 |
154,489 |
153,265 |
156,126 |
153,183 |
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NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
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Consolidated Balance Sheets |
|||
(Unaudited) |
|||
(Thousands of US Dollars) |
June 30, |
December 31, |
|
Current assets |
|||
Cash and cash equivalents |
32,270 |
79,162 |
|
Restricted cash |
232 |
9,371 |
|
Account receivables, net |
48,965 |
35,423 |
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Prepaid expenses |
7,663 |
6,097 |
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Deferred financing fees |
3,001 |
561 |
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Deferred mobilization costs |
566 |
601 |
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Total current assets |
92,697 |
131,215 |
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Non-current assets |
|||
Property, plant & equipment, net |
480,669 |
499,594 |
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Restricted cash, net of current portion |
6,438 |
6,438 |
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Deferred mobilization cost, net of current portion |
- |
382 |
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Deferred financing fees, net of current portion |
779 |
- |
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Other noncurrent assets |
842 |
- |
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Total non-current Assets |
488,728 |
506,414 |
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Total assets |
581,425 |
637,629 |
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Current liabilities |
|||
Accounts payable |
34,507 |
12,917 |
|
Accrued expenses |
26,285 |
21,467 |
|
Income tax payable |
2,805 |
3,762 |
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Current portion of debt |
100,000 |
197,500 |
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Deferred revenue |
727 |
2,076 |
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Total current liabilities |
164,324 |
237,722 |
|
Non-current liabilities |
|||
Deferred revenue, net of current portion |
2,066 |
2,396 |
|
Other long-term liabilities |
- |
6,022 |
|
Total non-current liabilities |
2,066 |
8,418 |
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Total liabilities |
166,390 |
246,140 |
|
Shareholders' equity |
|||
Share capital |
39,333 |
38,829 |
|
Additional paid-in capital |
166,137 |
165,750 |
|
Accumulated other comprehensive loss |
(6,691) |
(6,691) |
|
Retained earnings |
216,256 |
193,601 |
|
Total shareholders' equity |
415,035 |
391,489 |
|
Total liabilities and shareholders' equity |
581,425 |
637,629 |
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NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
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Consolidated Statement of Cash Flows - (Unaudited) |
||||
Six months ended |
||||
(Thousands of US Dollars) |
2010 |
2009 |
||
Cash flows from operating activities |
||||
Net income |
22,655 |
26,412 |
||
Adjustments to reconcile net income to net cash |
||||
provided by operating activities: |
||||
Bad debt expense |
- |
3,897 |
||
Stock-based compensation |
1,298 |
725 |
||
Depreciation |
28,737 |
31,998 |
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Amortization of drilling contract intangibles |
- |
(4,036) |
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Amortization of deferred financing fees |
1,029 |
794 |
||
Changes in operating assets and working capital |
||||
(Increase) decrease in accounts receivable |
229 |
(34,105) |
||
(Increase) decrease in prepaid expenses |
(240) |
2,570 |
||
Increase in accounts payable |
7,819 |
1,264 |
||
Increase (decrease) in other accrued liabilities |
(4,169) |
2,620 |
||
Increase (decrease) in deferred revenue |
(1,679) |
2,902 |
||
Decrease in income tax payable |
(957) |
(1,154) |
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Other, net |
(1,749) |
(300) |
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Net cash provided by operating activities |
52,973 |
33,587 |
||
Cash flows from investing activities |
||||
Capital expenditures |
(6,796) |
(6,883) |
||
Release of restricted cash |
9,163 |
- |
||
Proceeds from sale of equipment |
- |
188 |
||
Net cash provided by/ (used in) investing activities |
2,367 |
(6,695) |
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Cash flows from financing activities |
||||
Proceeds from drawdown of revolver |
100,000 |
- |
||
Payoff of bond loan |
(100,000) |
- |
||
Principal payment of bank term loan |
(97,500) |
(45,000) |
||
Deferred financing fees |
(4,325) |
- |
||
Payment for taxes on vested shares |
(407) |
- |
||
Net cash used in financing activities |
(102,232) |
(45,000) |
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Net decrease in cash and cash equivalents |
(46,892) |
(18,108) |
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Cash and cash equivalents at beginning of period |
79,162 |
58,759 |
||
Cash and cash equivalents at end of period |
32,270 |
40,651 |
||
Supplemental disclosure of cash flow information |
||||
Cash paid during the period for: |
||||
Income taxes |
4,438 |
3,708 |
||
Interest |
2,893 |
6,165 |
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NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
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Consolidated Statements of Shareholders’ Equity |
|||||||
(Unaudited) |
|||||||
Accumulated |
|||||||
Common |
Additional |
other |
|||||
shares |
Share |
paid-in |
comprehensive |
Retained |
|||
(Thousands of US Dollars) |
('000) |
capital |
capital |
gain / (loss) |
earnings |
Total |
|
Balance at January 1, 2009 |
153,124 |
38,281 |
164,860 |
(6,691) |
118,542 |
314,992 |
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Net income |
- |
- |
- |
- |
75,059 |
75,059 |
|
Issuance of restricted stock |
2,196 |
548 |
(548) |
- |
- |
- |
|
Stock-based compensation |
- |
- |
1,438 |
- |
- |
1,438 |
|
Balance at December 31, 2009 |
155,320 |
38,829 |
165,750 |
(6,691) |
193,601 |
391,489 |
|
Net income |
- |
- |
- |
- |
22,655 |
22,655 |
|
Issuance of restricted stock |
2,016 |
504 |
(504) |
- |
- |
- |
|
Payments for taxes on vested shares |
- |
- |
(407) |
- |
- |
(407) |
|
Stock-based compensation |
- |
- |
1,298 |
- |
- |
1,298 |
|
Balance at June 30, 2010 |
157,336 |
39,333 |
166,137 |
(6,691) |
216,256 |
415,035 |
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NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
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Reconciliation of GAAP to Non-GAAP Financial Results |
||||||
(Unaudited) |
||||||
Three Months Ended |
Six Months Ended |
|||||
June 30, |
June 30, |
|||||
(Thousands of US Dollars) |
Q1 2010 |
2010 |
2009 |
2010 |
2009 |
|
Net Income (GAAP) |
23,180 |
(525) |
22,792 |
22,655 |
26,412 |
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Add Back: |
||||||
Net interest expense |
2,709 |
2,393 |
3,003 |
5,102 |
6,560 |
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Income taxes |
3,081 |
444 |
2,293 |
3,525 |
2,762 |
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Depreciation |
14,068 |
14,669 |
16,225 |
28,737 |
31,998 |
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Amortization |
- |
- |
(2,018) |
- |
(4,036) |
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EBITDA (Non-GAAP) |
43,038 |
16,981 |
42,295 |
60,019 |
63,696 |
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EBITDA is defined as Net Income before Interest, Taxes, Depreciation and Amortization. |
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NORTHERN OFFSHORE, LTD. and SUBSIDIARIES |
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Operating Statistics |
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(Unaudited) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
June 30, |
June 30, |
||||||
Q1 2010 |
2010 |
2009 |
2010 |
2009 |
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Jackups (3) |
|||||||
Average rig utilization |
33% |
11% |
94% |
22% |
90% |
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Operating days |
90 |
31 |
256 |
121 |
489 |
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Average revenue per day |
86,782 |
68,448 |
145,419 |
82,090 |
151,031 |
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Drillship (1) |
|||||||
Average rig utilization |
100% |
100% |
48% |
100% |
24% |
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Operating days |
90 |
91 |
43 |
181 |
43 |
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Average revenue per day |
334,596 |
125,246 |
261,331 |
229,343 |
261,331 |
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Semisubmersible (1) |
|||||||
Average rig utilization |
100% |
100% |
100% |
100% |
100% |
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Operating days |
90 |
91 |
91 |
181 |
181 |
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Average revenue per day |
233,937 |
213,796 |
229,426 |
223,811 |
220,000 |
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Total Drilling Rigs (5) |
|||||||
Average rig utilization |
60% |
47% |
86% |
53% |
79% |
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Operating days |
270 |
213 |
390 |
483 |
713 |
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Average revenue per day |
218,441 |
154,284 |
177,902 |
190,148 |
175,241 |
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Floating Production Facility (1) |
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Days in period |
90 |
91 |
91 |
181 |
181 |
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Production days from April 28, 2009 |
90 |
91 |
64 |
181 |
64 |
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Average bpd (from April 28th) |
11,224 |
25,167 |
8,999 |
18,234 |
8,999 |
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Average tariff revenue per day |
58,119 |
131,479 |
37,294 |
95,001 |
37,294 |
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Average other revenue per day |
8,867 |
8,802 |
17,374 |
8,834 |
14,099 |
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Total average revenue per day |
66,986 |
140,275 |
43,608 |
103,834 |
27,286 |
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Note 1: Operating days represent actual days under contract. Note 2: Northern Producer commenced 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 Q2'10 we earned an average dayrate of US$34,229 per day for the three months ended June 30, 2010 and US$34,239 per day for the six months ended June 30, 2010 for provision of rig management services for two semisubmersibles in the Caspian Sea which commenced October 1, 2009. Note 4: 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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