Attached files

file filename
8-K - FORM 8-K - Noble Corpd712332d8k.htm

Exhibit 99.1

 

Noble Corporation plc

Devonshire House

1 Mayfair Place

London W1J 8AJ

England

    
LOGO  
  

 

PRESS RELEASE

NOBLE CORPORATION PLC REPORTS FIRST QUARTER 2014 RESULTS

NEW RIG ADDITIONS DRIVE IMPROVED MARGINS

London, England, April 16, 2014 – Noble Corporation plc (NYSE: NE) today reported first quarter 2014 net income of $256 million, or $0.99 per diluted share, compared to $174 million, or $0.68 per diluted share, for the fourth quarter 2013. Results for the fourth quarter of 2013 included an after-tax charge of $36 million, or $0.14 per diluted share, relating to an asset impairment. Excluding the impairment charge, net income for the fourth quarter would have totaled $210 million, or $0.82 per diluted share. For the first quarter of 2013, net income totaled $150 million, or $0.59 per diluted share. Revenues for the first quarter of 2014 were $1.3 billion compared to $1.2 billion in the fourth quarter of 2013 and $971 million in the first quarter of 2013.

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation plc noted, “Our contract drilling margin improved to 54 percent in the first quarter, up from 50 percent in the fourth quarter of 2013, as new rig additions contributed to a 7 percent increase in revenues while contract drilling costs were essentially flat in the quarter. In addition, a reduction in operating downtime to 4.5 percent and higher bonus revenue further supported the increase in quarterly revenues.

“Following shipyard deliveries in 2013 of three ultra-deepwater drillships and two high-specification jackups, we began 2014 with the delivery of two additional jackups, the Noble Houston Colbert and Noble Sam Turner. Both rigs are preparing to commence their initial operations offshore Argentina and the Danish sector of the North Sea, respectively. By the end of 2014, we expect to have taken delivery from shipyards of our final two ultra-deepwater drillships and two of our final three high-specification jackups, largely concluding our current rig construction program. These fleet additions should provide significant contributions to future financial results as our fleet mix continues to shift toward a premium weighting.”

Contract drilling services revenues for the first quarter of 2014 reached $1.2 billion, a 7 percent improvement from $1.1 billion in the fourth quarter of 2013. The increase was due primarily to full or partial contributions in the quarter from several of the Company’s new rigs. Also, fleet operating days increased as a result of a reduction in shipyard days. Average daily revenues improved 5 percent in the first quarter to $223,600 compared to the previous quarter average of $212,000, reflecting the addition of premium assets, while fleet utilization rose to 84 percent in the first quarter compared to 82 percent in the fourth quarter of 2013. Contract drilling operating costs increased marginally in the first quarter to $561 million compared to $560 million in the fourth quarter of 2013. Higher costs associated with adding newbuild rigs to the fleet were almost entirely offset by a reduction in mobilization and repair and maintenance costs.

 

MORE


Net cash from operating activities was $506 million in the first quarter of 2014 as compared to $541 million for the fourth quarter of 2013. Capital expenditures in the first quarter of 2014 totaled $517 million, including $326 million related to the Company’s fleet expansion program. As of March 31, 2014, approximately $1.6 billion in capital expenditures was required to complete the remaining five projects in the Company’s newbuild program, comprised of two ultra-deepwater drillships and three high-specification jackups.

Debt as a percentage of total capitalization at March 31, 2014 was 38 percent, unchanged from December 31, 2013, while liquidity, defined as cash and cash equivalents plus availability under revolving credit facilities, totaled $1.03 billion compared to $1.45 billion at December 31, 2013. The decrease in liquidity primarily relates to the maturity in March of our $250 million 7.375 percent senior notes, which were paid off with the proceeds of commercial paper issuance, combined with capital expenditures to meet newbuild deliveries.

Operating Highlights

The Company’s total contract backlog at March 31, 2014 was an estimated $14.3 billion compared to $15.4 billion at December 31, 2013, reflecting a reduced pace of customer activity in early 2014.

Utilization of the Company’s floating rig fleet (semisubmersibles and drillships) improved to 85 percent in the first quarter of 2014 from 84 percent in the fourth quarter of 2013. Excluding the impact of two cold stacked rigs, utilization would have been 92 percent in the first quarter of 2014 and 91 percent in the fourth quarter of 2013. The improvement in utilization was due to a full quarter of operations on the newbuild ultra-deepwater drillship Noble Bob Douglas, which was operating offshore New Zealand, and on the drillship Noble Roger Eason, operating offshore Brazil. The Eason completed a shipyard program in the fourth quarter of 2013. Partially offsetting the utilization improvement was increased idle time on the semisubmersible Noble Homer Ferrington following the completion of a drilling program in the Eastern Mediterranean in early January 2014. Average daily revenues in the floating rig fleet were $393,300 in the first quarter of 2014, or an improvement of approximately 4 percent compared to $378,400 in the fourth quarter of 2013.


First quarter 2014 utilization of the Company’s jackup rig fleet was 86 percent, consistent with the fourth quarter of 2013. Fewer operating days on certain rigs in Mexico and West Africa were offset by a full quarter of operations from the newbuild jackup Noble Mick O’Brien, which began operations in the Middle East in the fourth quarter of 2013, and the newbuild jackup Noble Regina Allen, which commenced operations in the first quarter of 2014 in the North Sea. Average daily revenues during the first quarter improved to $125,000 from $115,700 during the fourth quarter of 2013.

At the end of the first quarter of 2014, 74 percent of the Company’s available rig operating days for both our floater and jackup units were committed for the remainder of 2014. For 2015, an estimated 47 percent of the available rig operating days were committed, including 62 percent and 39 percent of the floating and jackup rig days, respectively. The calculations for committed operating days include available days for two floaters and one jackup, all of which are currently cold stacked.

Outlook

While addressing the current offshore environment and Noble’s enhanced positioning, Williams stated, “We continue to believe the more guarded exploration and production spending pattern shown by some operators during early 2014 is temporary and that contract visibility, especially in the floating rig segment, is likely to improve as we progress further into 2014 and 2015.

“Despite the current market dynamics, Noble is well positioned with limited near-term fleet exposure, a large revenue backlog, strong client relationships, well-timed premium rig additions with attractive contracts, a rapidly declining capital expenditure commitment and successful implementation of new operating systems and procedures that are driving improved financial performance. We continue to anticipate improving free cash flow in 2015 despite current industry developments. We believe the offshore drilling business remains fundamentally sound over the long-term and Noble is better positioned to address the opportunities expected with the next cyclical upturn with a more versatile and focused fleet run by skilled and highly competent crews.”


About Noble Corporation

Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 77 offshore drilling units (including two ultra-deepwater drillships and three high-specification jackup drilling rigs currently under construction), located worldwide, including in the U.S. Gulf of Mexico and Alaska, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India, Malaysia and Australia. Noble’s shares are traded on the New York Stock Exchange under the symbol “NE.” Noble Corporation plc is a public limited company registered in England and Wales with company number 08354954 and registered office at Devonshire House, 1 Mayfair Place, London, W1J 8AJ England. Additional information on Noble Corporation is available on the Company’s Web site at http://www.noblecorp.com.

Statements regarding contract backlog, earnings, costs, revenue, rig demand, fleet condition or performance, shareholder value, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships and requirements, strategic initiatives, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company’s most recent Form 10-K, Form 10-Q’s and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.

Conference Call

Noble also has scheduled a conference call and webcast related to its first quarter 2014 results on Thursday, April 17, 2014, at 8:00 a.m. U.S. Central Daylight Time. Interested parties are invited to listen to the call by dialing 1-866-461-7129, or internationally 1-706-679-3084, using access code: 88240453, or by asking for the Noble Corporation conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company’s Web site.


A replay of the conference call will be available on Thursday, April 17, 2014, beginning at 12:00 p.m. U.S. Central Daylight Time, through Thursday, May 1, 2014, ending at 11:00 p.m. U.S. Central Daylight Time. The phone number for the conference call replay is 1-855-859-2056 or, for calls from outside of the U.S., 1-404-537-3406, using access code: 88240453. The replay will also be available on the Company’s Web site following the end of the live call.

For additional information, contact:

 

For Investors:    Jeffrey L. Chastain,
   Vice President – Investor Relations and Corporate Communications,
   Noble Drilling Services Inc., 281-276-6383
For Media:    John S. Breed,
   Director of Investor Relations and Corporate Communications,
   Noble Drilling Services Inc., 281-276-6729


NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended  
     March 31,  
     2014     2013  

Operating revenues

    

Contract drilling services

   $ 1,206,304      $ 928,737   

Reimbursables

     36,653        21,174   

Labor contract drilling services

     8,212        21,054   

Other

     1        10   
  

 

 

   

 

 

 
     1,251,170        970,975   
  

 

 

   

 

 

 

Operating costs and expenses

    

Contract drilling services

     561,131        480,126   

Reimbursables

     30,606        14,922   

Labor contract drilling services

     6,226        12,249   

Depreciation and amortization

     245,905        206,156   

General and administrative

     25,637        25,569   

Non-recurring spin-off related costs

     12,405        3,962   

Gain on contract extinguishment

     —          (1,800
  

 

 

   

 

 

 
     881,910        741,184   
  

 

 

   

 

 

 

Operating income

     369,260        229,791   

Other income (expense)

    

Interest expense, net of amount capitalized

     (40,392     (27,301

Interest income and other, net

     (1,190     (425
  

 

 

   

 

 

 

Income before income taxes

     327,678        202,065   

Income tax provision

     (54,436     (34,352
  

 

 

   

 

 

 

Net income

     273,242        167,713   

Net income attributable to noncontrolling interests

     (16,916     (17,653
  

 

 

   

 

 

 

Net income attributable to Noble Corporation

   $ 256,326      $ 150,060   
  

 

 

   

 

 

 

Net income per share

    

Basic

   $ 0.99      $ 0.59   

Diluted

   $ 0.99      $ 0.59   


NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

     March 31,     December 31,  
     2014     2013  

ASSETS

    

Current assets

    

Cash and cash equivalents

   $ 114,735      $ 114,458   

Accounts receivable

     877,127        949,069   

Prepaid expenses and other current assets

     379,674        327,408   
  

 

 

   

 

 

 

Total current assets

     1,371,536        1,390,935   
  

 

 

   

 

 

 

Property and equipment, at cost

     19,691,578        19,198,767   

Accumulated depreciation

     (4,866,009     (4,640,677
  

 

 

   

 

 

 

Property and equipment, net

     14,825,569        14,558,090   
  

 

 

   

 

 

 

Other assets

     247,392        268,932   
  

 

 

   

 

 

 

Total assets

   $ 16,444,497      $ 16,217,957   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities

    

Accounts payable

   $ 323,593      $ 347,214   

Accrued payroll and related costs

     117,153        151,161   

Dividend payable

     96,869        128,249   

Other current liabilities

     389,189        425,291   
  

 

 

   

 

 

 

Total current liabilities

     926,804        1,051,915   
  

 

 

   

 

 

 

Long-term debt

     5,728,782        5,556,251   

Deferred income taxes

     221,380        225,455   

Other liabilities

     317,108        334,308   
  

 

 

   

 

 

 

Total liabilities

     7,194,074        7,167,929   
  

 

 

   

 

 

 

Commitments and contingencies

    

Equity

    

Total shareholders’ equity

     8,525,757        8,322,583   

Noncontrolling interests

     724,666        727,445   
  

 

 

   

 

 

 

Total equity

     9,250,423        9,050,028   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 16,444,497      $ 16,217,957   
  

 

 

   

 

 

 


NOBLE CORPORATION PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

     Three Months Ended  
     March 31,  
     2014     2013  

Cash flows from operating activities

    

Net income

   $ 273,242      $ 167,713   

Adjustments to reconcile net income to net cash from operating activities:

    

Depreciation and amortization

     245,905        206,156   

Other changes in operating activities

     (13,351     (171,317
  

 

 

   

 

 

 

Net cash from operating activities

     505,796        202,552   
  

 

 

   

 

 

 

Cash flows from investing activities

    

New construction

     (326,197     (137,893

Other capital expenditures

     (177,233     (204,222

Capitalized interest

     (13,853     (29,875

Other investing activities

     (43,505     (66,312
  

 

 

   

 

 

 

Net cash from investing activities

     (560,788     (438,302
  

 

 

   

 

 

 

Cash flows from financing activities

    

Net change in borrowings outstanding on bank credit facilities

     422,402        209,680   

Dividend payments

     (96,840     (33,335

Repayment of long-term debt

     (250,000     —     

Other financing activities

     (20,293     (8,159
  

 

 

   

 

 

 

Net cash from financing activities

     55,269        168,186   
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     277        (67,564

Cash and cash equivalents, beginning of period

     114,458        282,092   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 114,735      $ 214,528   
  

 

 

   

 

 

 


NOBLE CORPORATION PLC AND SUBSIDIARIES

FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT

(In thousands, except operating statistics)

(Unaudited)

 

     Three Months Ended March 31,     Three Months Ended December 31,  
     2014      2013     2013  
     Contract                  Contract                  Contract              
     Drilling                  Drilling                  Drilling              
     Services     Other     Total      Services     Other      Total     Services     Other     Total  

Operating revenues

                    

Contract drilling services

   $ 1,206,304      $ —        $ 1,206,304       $ 928,737      $ —         $ 928,737      $ 1,124,760      $ —        $ 1,124,760   

Reimbursables

     36,133        520        36,653         20,711        463         21,174        31,520        1,678        33,198   

Labor contract drilling services

     —          8,212        8,212         —          21,054         21,054        —          9,091        9,091   

Other

     1        —          1         10        —           10        —          —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   $ 1,242,438      $ 8,732      $ 1,251,170       $ 949,458      $ 21,517       $ 970,975      $ 1,156,280      $ 10,769      $ 1,167,049   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses

                    

Contract drilling services

   $ 561,131      $ —        $ 561,131       $ 480,126      $ —         $ 480,126      $ 560,259      $ —        $ 560,259   

Reimbursables

     30,118        488        30,606         14,469        453         14,922        23,329        925        24,254   

Labor contract drilling services

     —          6,226        6,226         —          12,249         12,249        —          6,879        6,879   

Depreciation and amortization

     241,574        4,331        245,905         202,619        3,537         206,156        233,730        3,236        236,966   

General and administrative

     25,428        209        25,637         25,057        512         25,569        31,553        249        31,802   

Non-recurring spin-off related costs

     320        12,085        12,405         —          3,962         3,962        —          7,260        7,260   

Loss on impairment

     —          —          —           —          —           —          40,103        —          40,103   

Gain on contract extinguishment

     —          —          —           (1,800     —           (1,800     —          —          —     
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   $ 858,571      $ 23,339      $ 881,910       $ 720,471      $ 20,713       $ 741,184      $ 888,974      $ 18,549      $ 907,523   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 383,867      $ (14,607   $ 369,260       $ 228,987      $ 804       $ 229,791      $ 267,306      $ (7,780   $ 259,526   
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Operating statistics

                    

Jackups:

                    

Average Rig Utilization

     86          93          86    

Operating Days

     3,413             3,598             3,360       

Average Dayrate

   $ 124,962           $ 105,559           $ 115,749       

Semisubmersibles:

                    

Average Rig Utilization

     79          84          84    

Operating Days

     993             1,053             1,076       

Average Dayrate

   $ 392,620           $ 321,037           $ 402,358       

Drillships:

                    

Average Rig Utilization

     92          83          85    

Operating Days

     990             669             869       

Average Dayrate

   $ 393,892           $ 315,216           $ 348,702       

FPSO/Submersibles:

                    

Average Rig Utilization

     0          0          0    

Operating Days

     —               —               —         

Average Dayrate

   $ —             $ —             $ —         

Total:

                    

Average Rig Utilization

     84          86          82    

Operating Days

     5,396             5,320             5,305       

Average Dayrate

   $ 223,559           $ 174,578           $ 212,019       


NOBLE CORPORATION PLC AND SUBSIDIARIES

CALCULATION OF BASIC AND DILUTED NET INCOME PER SHARE

(In thousands, except per share amounts)

(Unaudited)

The following table sets forth the computation of basic and diluted net income per share:

 

     Three months ended  
     March 31,  
     2014     2013  

Allocation of net income

    

Basic

    

Net income attributable to Noble Corporation

   $ 256,326      $ 150,060   

Earnings allocated to unvested share-based payment awards

     (4,274     (1,667
  

 

 

   

 

 

 

Net income to common shareholders - basic

   $ 252,052      $ 148,393   
  

 

 

   

 

 

 

Diluted

    

Net income attributable to Noble Corporation

   $ 256,326      $ 150,060   

Earnings allocated to unvested share-based payment awards

     (4,272     (1,664
  

 

 

   

 

 

 

Net income to common shareholders - diluted

   $ 252,054      $ 148,396   
  

 

 

   

 

 

 

Weighted average number of shares outstanding - basic

     253,940        253,073   

Incremental shares issuable from assumed exercise of stock options

     135        268   
  

 

 

   

 

 

 

Weighted average number of shares outstanding - diluted

     254,075        253,341   
  

 

 

   

 

 

 

Weighted average unvested share-based payment awards

     4,188        2,844   
  

 

 

   

 

 

 

Earnings per share

    

Basic

   $ 0.99      $ 0.59   

Diluted

   $ 0.99      $ 0.59