Northern Offshore Reports First Quarter 2014 Results - WDRB 41 Louisville News

Northern Offshore Reports First Quarter 2014 Results

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Northern Offshore, Ltd.

HOUSTON, May 14, 2014 /PRNewswire/ --

Highlights
(All $ in USD)

  • Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended March 31, 2014 of $10.0 million, or $0.06 per diluted share, on revenues of $49.4 million.
  • The company generated $20.3 million of first quarter adjusted EBITDA.
  • Second of three one-year options exercised for the Energy Enhancer.
  • 100% of the fleet contracted.
  • Steel cutting commenced in April for the first new build jackup.
  • The company's directors have declared a dividend of $0.05 per share, or approximately $8.2 million.
  • The directors are evaluating a plan to spin off a portion of ownership in the Northern Producer.

First Quarter Analysis

Net income for the three months ended March 31, 2014 of $10.0 million, or $0.06 per diluted share, on revenues of $49.4 million compares to net income of $1.1 million, or $0.01 per diluted share, for the first quarter of 2013, on revenues of $41.4 million.

Revenues for the three months ended March 31, 2014 were $8.0 million higher than the same period in 2013, primarily due to higher operating efficiencies of the semisubmersible Energy Driller, and higher dayrates for the jackups Energy Endeavour and Energy Enhancer.  Slightly offsetting these increases was a decrease in tariff revenues for the floating production facility Northern Producer due to lower production during the quarter as compared to the same period last year.

Tariff revenues from the floating production facility Northern Producer averaged approximately $96,000 per day in the first quarter of 2014.  The company expects pricing levels to remain stable and production to decline slightly before completion of an additional well in the Don SW field later this year.

Drilling and production expenses for the three months ended March 31, 2014 were $3.1 million lower as compared to the same period in 2013, primarily due to a decrease in operating expenses for the drillship Energy Searcher.  Partially offsetting this decrease was an increase in operating expenses for the jackup Energy Endeavour primarily due to higher labor costs.  First quarter 2014 depreciation, general and administrative expenses, interest expense, amortization of deferred financing fees and other financial items were comparable to those of the same period in 2013.

As of today, the company has an outstanding credit facility balance of $47 million and an unrestricted cash balance of approximately $37 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 May 30, 2014 will be entitled to receive the dividend, which will be paid on or around June 16, 2014.  The shares of the company will be trading ex-dividend from May 28, 2014.

Management Comment

Gary W. Casswell, Northern Offshore's president and CEO, commented, "We are pleased with our first quarter results.  Our operations personnel did their part in managing our rigs which contributed to our higher profit margin for the quarter.  We expect to see continuous improvement in EBTIDA throughout the year as the Energy Searcher will commence drilling operations soon, resulting in all five of our units earning revenue.

With respect to the Northern Producer, our client EnQuest has plans to drill another development well this year in the Don SW field, and is producing a Field Development Plan ("FDP") for the Don NE field.  Should the FDP result in additional development drilling in Don NE, earnings from the Northern Producer could increase substantially.  As such, our board of directors recently requested that management investigate the possibility of spinning off the Northern Producer and its life-of-field contract.  The board believes that a spinoff of the Northern Producer could unlock value for the shareholders and allow the remaining company to focus exclusively on growing its contract drilling business. 

The intent would be to establish a publicly traded company to own and operate the Northern Producer, with a focus on cash distributions to the shareholders.  Initially the plan is to consider distributing approximately 20% of this new company to the shareholders of Northern Offshore.  This company would also consider the acquisition of similar assets with long-dated contracts to enhance dividends.

Last year, Northern Offshore ordered two new jackup rigs and will continue to focus on growing the offshore drilling business by providing customers with modern equipment operated by a best in class organization. In April, we cut steel on the first new jackup, the Energy Engager, a major milestone for the company."

Conference Call Information

Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, May 15, 2014 to discuss the company's quarterly results.  Individuals wishing to listen to the teleconference should call (866) 700-5192 (in the U.S.) or (617) 213-8833 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 39106125.

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 brian.hefty@northernoffshoreltd.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.

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)







 Three Months Ended
March 31,  

(Thousands of US Dollars, except per share amounts)

Q4 2013

2014

2013

Revenues

46,778

49,432

41,413

Operating expenses:




Drilling and production

(27,929)

(26,949)

(30,079)

Depreciation

(8,094)

(8,297)

(7,937)

General & administrative

(2,135)

(2,142)

(2,011)

Total operating expenses

(38,158)

(37,388)

(40,027)

Operating income

8,620

12,044

1,386

Interest expense

(365)

(426)

(395)

Amortization of deferred financing fees

(116)

(121)

(121)

Other financial items

(300)

(45)

469

Total other expense

(781)

(592)

(47)

Income before taxes

7,839

11,452

1,339

Income taxes (expense)/benefit

(1,934)

(1,449)

(275)

Net income

5,905

10,003

1,064





Earnings per share (US$)




     Basic

0.04

0.06

0.01

     Diluted

0.04

0.06

0.01





Weighted average common shares (000's)




     Basic

157,625

159,091

157,060

     Diluted

157,625

159,093

157,217

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)




(Thousands of US Dollars)

March 31, 
2014

December 31,
2013

Current assets 



Cash and cash equivalents

24,925

19,537

Restricted cash 

1,000

1,000

Accounts receivable, net

29,031

24,158

Prepaid expenses 

3,255

3,508

Deferred mobilization costs 

16,338

2,202

Deferred insurance premium

1,624

1,627

Other current assets

1,261

1,382

Total current assets

77,434

53,414

Noncurrent assets 



Property, plant & equipment, net

211,216

198,158

Restricted cash, net of current portion 

5,436

5,436

Noncurrent deposit/escrow account

10,404

9,222

Deferred mobilization costs, net of current portion

61

368

Drydock costs, net of current portion

2,300

2,859

Other noncurrent assets 

1,360

1,665

Total noncurrent assets

230,777

217,708

Total assets

308,211

271,122

Current liabilities



Accounts payable

13,356

9,275

Accrued expenses

19,796

20,196

Income taxes payable

1,732

1,282

Affiliated debt

47,000

22,000

Deferred revenue

5,785

-

Total current liabilities

87,669

52,753

Shareholders' equity



Share capital

40,850

40,933

Additional paid-in capital

175,875

175,462

Accumulated other comprehensive loss

(6,691)

(6,691)

Retained earnings

10,508

8,665

Total shareholders' equity

220,542

218,369

Total liabilities and shareholders' equity  

308,211

271,122

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Statements of Cash Flows - (Unaudited)




Three months ended
March 31,

(Thousands of US Dollars)

2014

2013

Cash flows from operating activities



Net income

10,003

1,064

Adjustments to reconcile net income to net cash provided by operating activities:



Stock-based compensation 

1,174

1,470

Depreciation

8,297

7,937

Amortization of deferred financing fees

121

121

Gain on disposal of assets

(325)

(29)




Changes in operating assets and working capital



Accounts receivable

(4,548)

3,866

Prepaid expenses                          

253

647

Deferred mobilization costs

(13,829)

797

Other current and noncurrent assets

718

932

Accounts payable

1,380

(6,839)

Other accrued liabilities

(604)

(568)

Deferred revenue

5,785

(1,031)

Income taxes payable

450

(338)

Other, net

21

-

Net cash provided by operating activities

8,896

8,029




Cash flows from investing activities



Capital expenditures - existing fleet

(529)

(2,189)

Capital expenditures - newbuild jackups

(17,997)

-

Changes in restricted cash

-

(150)

Changes in noncurrent deposit/escrow account

(1,182)

(1,900)

Net cash used in investing activities

(19,708)

(4,239)




Cash flows from financing activities



Proceeds from drawdown of revolver facility

25,000

-

Payment for taxes on vested shares

(844)

(274)

Dividends paid

(7,956)

(7,986)

Net cash provided by/(used in) financing activities

16,200

(8,260)




Net changes in cash and cash equivalents

5,388

(4,470)

Cash and cash equivalents at beginning of period

19,537

26,504

Cash and cash equivalents at end of period

24,925

22,034




Supplemental disclosure of cash flow information



Cash paid during the period for:



    Income taxes

250

87




Significant non-cash transactions during the period for:



Accrued capital expenditures

2,850

1,968

Accrued dividends

204

188

 

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

-

-

-

-

1,064

1,064

Issuance of restricted stock

3,064

766

(766)

-

-

-

Payments for taxes on vested shares

-

-

(274)

-

-

(274)

Stock-based compensation 

-

-

1,470

-

-

1,470

Common shares dividends

-

-

-

-

(8,174)

(8,174)

Balance at March 31, 2013

163,552

40,888

171,415

(6,691)

22,897

228,509








Balance at December 31, 2013

163,732

40,933

175,462

(6,691)

8,665

218,369








Net income

-

-

-

-

10,003

10,003

Issuance of restricted stock

(333)

(83)

83

-

-

-

Payments for taxes on vested shares

-

-

(844)

-

-

(844)

Stock-based compensation 

-

-

1,174

-

-

1,174

Common shares dividends

-

-

-

-

(8,160)

(8,160)

Balance at March 31, 2014

163,399

40,850

175,875

(6,691)

10,508

220,542

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Results

(Unaudited)















 Three Months Ended 



 March 31, 

(Thousands of US Dollars)

Q4 2013

2014

2013





Net income (GAAP)

5,905

10,003

1,064





Add Back:




Net interest expense

481

547

516

Income taxes

1,934

1,449

275

Depreciation

8,094

8,297

7,937

Other financial items

300

45

(469)





Adjusted EBITDA (Non-GAAP)

16,714

20,341

9,323


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 




 March 31, 


Q4 2013


2014

2013






Jackups (2)










Average rig utilization 

91%


100%

100%

Operating days 

167


180

180

Average revenue per day 

132,046


139,435

105,545






Drillship (1)










Average rig utilization 

0%


0%

0%

Operating days

0


0

0

Average revenue per day 

0


0

0






Semisubmersible (1)










Average rig utilization 

100%


100%

100%

Operating days

92


90

90

Average revenue per day

169,071


172,416

138,013






Total Drilling Rigs (4)










Average rig utilization 

70%


75%

75%

Operating days 

259


270

270

Average revenue per day 

145,198


150,536

116,368






Floating Production  Facility (1)










Days in period 

92


90

90

Production days

92


90

90

Average bpd

16,369


16,009

18,273

Average tariff revenue per day

98,217


96,057

109,636

Average other revenue per day 

1,474


1,579

1,406

Total average revenue per day 

99,691


97,636

111,042


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.  

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and WDRB. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.