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Diamond Offshore Announces Third Quarter 2015 Results

-- Reports net income of $136 million, $0.99 per share -- Confirms one-year contract for semisubmersible rig Ocean Guardian -- Announces $333 million, 875-day backlog addition to semisubmersible rig Ocean Courage -- Declares regular cash dividend of $0.125 per share

November 2, 2015 6:00 AM EST

HOUSTON, Nov. 2, 2015 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $136 million, or $0.99 per share, in the third quarter of 2015, compared to $53 million, or $0.38 per share, in the third quarter of 2014.  Revenues in the third quarter of 2015 were $610 million, compared to revenues of $738 million in the third quarter of 2014.

"I am pleased with our solid third quarter results, which demonstrate Diamond Offshore's ability to execute on managing our costs and controlling downtime," said Marc Edwards, President and Chief Executive Officer.  "During the quarter, our three newbuild drillships delivered operational efficiency of 99.3 percent, which directly benefits our topline and improves project economics for our clients."

Diamond Offshore also confirmed the Ocean Guardian was awarded a contract for a one-year term in the UK North Sea beginning in March of 2016 at a rate of $220,000 per day.

The Company announced that it reached agreement with Petrobras for contracts on the semisubmersible rig Ocean Alliance and the drillship Ocean Clipper to be ended as of October 30, 2015, ahead of their original end dates, in return for an additional 875 days of contract term on the semisubmersible rig Ocean Courage. The additional term will be at a rate of $380,000 per day, representing revenue backlog of $333 million, and will extend the contract into mid-2020.  After export from Brazil, the Ocean Alliance will be cold-stacked and the Ocean Clipper will be retired and scrapped.  The terminated portions of the contracts represent a loss to revenue backlog of approximately $91 million.

Diamond Offshore also announced that it has declared a regular quarterly dividend of $0.125 per share, payable on December 1, 2015 to shareholders of record as of November 13, 2015.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 7:30 a.m. CST today.   A live webcast of the call will be available online on the Company's website, www.diamondoffshore.com.  Those interested in participating in the question and answer session should dial 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 60130700.  An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 33 offshore drilling rigs, including one rig under construction.  Diamond Offshore's fleet consists of 23 semisubmersibles, one of which is under construction, four dynamically positioned drillships, and six jack-ups. Additional information about the Company and access to the Company's SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Contract revenue as stated above assumes 100% rig utilization.  Rig utilization rates vary depending on a variety of circumstances, many of which are beyond the Company's control.  Rig utilization rates generally approach 92-98% during contracted periods; however, utilization rates can be adversely impacted by additional downtime due to various operating factors, including, but not limited to, weather conditions and unscheduled repairs and maintenance.  Additional information on the Company and access to the Company's SEC filings is available at www.diamondoffshore.com.

Statements contained in this press release or made during the above conference call that are not historical facts are "forward-looking statements" within the meaning of the federal securities laws.  Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness, effective dates and estimated duration; plans regarding retirement and scrapping of drilling rigs; future impairments; future dividends; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions, commodity prices and strategic opportunities; revenue expected to result from backlog; future credit ratings; future dayrates, future status, start and end dates and future contracts and availability; future contract opportunities and termination rights; contract noncompliance by customers and other third parties; utilization, surveys, downtime and other aspects of the Company's drilling rigs; statements concerning customer discussions and outcomes thereof and the impact of these and related events on the Company's operations and revenues; rigs being upgraded or to be upgraded and rigs under construction; and other statements that are not of historical fact.  Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company.  A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission, and readers of this press release are urged to review those reports carefully when considering these forward-looking statements.  Copies of these reports are available through the Company's website at www.diamondoffshore.com.  These risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, declaration of dividends, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, many of which are beyond the Company's control.  Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements.  Each forward-looking statement speaks only as of the date of this press release.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

Revenues:

         Contract drilling

$

599,036

$

727,888

$

1,816,055

$

2,062,750

         Revenues related to reimbursable expenses

10,706

9,794

47,775

76,600

                Total revenues

609,742

737,682

1,863,830

2,139,350

Operating expenses:

         Contract drilling, excluding depreciation

277,944

399,802

971,471

1,164,968

         Reimbursable expenses

10,476

9,437

46,904

75,393

         Depreciation

118,086

108,854

378,714

324,771

         General and administrative

16,888

18,604

50,888

61,909

         Impairment of assets

2,546

109,462

361,074

109,462

         Restructuring and separation costs

1,574

--

8,735

--

         Loss (gain) on disposition of assets

794

1,107

19

(7,612)

                Total operating expenses

428,308

647,266

1,817,805

1,728,891

Operating income

181,434

90,416

46,025

410,459

Other income (expense):

         Interest income

629

86

1,796

644

         Interest expense

(21,350)

(9,378)

(70,800)

(46,056)

Foreign currency transaction gain (loss)

(1,163)

425

954

(3,724)

         Other, net

217

90

702

598

Income (loss) before income tax expense

159,767

81,639

(21,323)

361,921

Income tax expense

(23,345)

(28,994)

(7,578)

(73,753)

Net Income (loss)

$

136,422

$

52,645

$

(28,901)

$

288,168

Income (loss) per share

$

0.99

$

0.38

$

(0.21)

$

2.09

Weighted average shares outstanding:

 Shares of common stock

137,159

137,146

137,156

137,582

 Dilutive potential shares of common stock

44

1

--

3

       Total weighted average shares outstanding

137,203

137,147

137,156

137,585

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited) 

(In thousands)

Three Months Ended

September 30,

June 30,

September 30,

2015

2015

2014

REVENUES

 Floaters:

   Ultra-Deepwater

$

376,195

$

315,670

$

313,124

   Deepwater

136,668

181,104

111,372

   Mid-water

69,500

96,926

258,028

      Total Floaters

582,363

593,700

682,524

  Jack-ups

16,673

23,742

45,364

Total Contract Drilling Revenue

$

599,036

$

617,442

$

727,888

Revenues Related to Reimbursable Expenses

 

$

 

10,706

 

$

 

16,590

 

$

 

9,794

CONTRACT DRILLING EXPENSE

 Floaters:

   Ultra-Deepwater

$

156,107

$

161,485

$

157,655

   Deepwater

67,630

86,464

72,367

   Mid-water

35,784

66,735

132,340

      Total Floaters

259,521

314,684

362,362

  Jack-ups

12,507

20,873

28,056

  Other

5,916

7,312

9,384

Total Contract Drilling Expense

$

277,944

$

342,869

$

399,802

Reimbursable Expenses

$

10,476

$

16,336

$

9,437

OPERATING (LOSS) INCOME

 Floaters:

   Ultra-Deepwater

$

220,088

$

154,185

$

155,469

   Deepwater

69,038

94,640

39,005

   Mid-water

33,716

30,191

125,688

      Total Floaters

322,842

279,016

320,162

  Jack-ups

4,166

2,869

17,308

  Other

(5,916)

(7,312)

(9,384)

  Reimbursable expenses, net

230

254

357

  Depreciation

(118,086)

(123,329)

(108,854)

  General and administrative expense

(16,888)

(16,548)

(18,604)

  Gain (loss) on disposition of assets

(794)

164

(1,107)

  Impairment of assets

(2,546)

--

(109,462)

  Restructuring and separation costs

(1,574)

(993)

--

          Total Operating Income

$

181,434

$

134,121

$

90,416

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

September 30,

December 31,

2015

2014

ASSETS

Current assets:

Cash and cash equivalents

$

141,131

$

233,623

Marketable securities

13,621

16,033

Accounts receivable, net of allowance for bad debts

515,754

463,862

Prepaid expenses and other current assets

163,871

185,541

Assets held for sale

6,700

--

841,077

899,059

Drilling and other property and equipment, net of

     accumulated depreciation

6,888,248

6,945,953

Other assets

121,171

176,277

Total assets

$

7,850,496

$

8,021,289

LIABILITIES AND STOCKHOLDERS' EQUITY

Current portion of long-term debt

$

--

$

249,962

Short-term borrowings

492,996

--

Other current liabilities

397,421

606,684

Long-term debt

1,994,710

1,994,526

Deferred tax liability

417,621

530,394

Other liabilities

171,595

188,160

Stockholders' equity

4,376,153

4,451,563

Total liabilities and stockholders' equity

$

7,850,496

$

8,021,289

 

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)

Third Quarter

2015

Second Quarter

2015

Third Quarter

2014

Average

Dayrate (1)

Utilization (2)

Operational Efficiency

(3)

Average

Dayrate (1)

Utilization (2)

Operational Efficiency

(3)

Revised Average

Dayrate (4)

Utilization (2)

Operational Efficiency

(3)

Ultra-Deepwater

Floaters

$479

71%

96.8%

$483

63%

90.9%

$491

77%

92.2%

Deepwater Floaters

$361

59%

90.3%

$451

63%

99.3%

$356

57%

95.5%

Mid-Water Floaters

$289

31%

97.5%

$278

32%

99.7%

$265

59%

94.1%

Jack-ups

$97

31%

99.8%

$83

53%

98.6%

$99

83%

99.3%

Fleet Total

95.5%

95.9%

94.7%

 

(1)

Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue earning day.  A revenue earning day is

defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and

contract preparation days.

(2)

Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet (including cold-stacked rigs, but excluding rigs under construction).  As of September 30, 2015, our cold-stacked rigs included one ultra-deepwater semisubmersible, one deepwater semisubmersible, four mid-water semisubmersibles and five jack-up rigs.

(3)

Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.

(4)

Average dayrate reported in prior period has been revised to conform to current presentation.

 

Contact: Darren DaughertyDirector, Investor Relations(281) 492-5370

 

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/diamond-offshore-announces-third-quarter-2015-results-300169813.html

SOURCE Diamond Offshore Drilling, Inc.



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