Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - DIAMOND OFFSHORE DRILLING, INC. | d427884d8k.htm |
Exhibit 99.1
|
|
Contact: Darren Daugherty Director, Investor Relations (281) 492-5370 |
Diamond Offshore Announces Third Quarter 2012 Results
HOUSTON, October 18, 2012 — Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income for the third quarter of 2012 of $178 million, or $1.28 per share on a diluted basis, compared with net income of $257 million, or $1.85 per share on a diluted basis, in the same period a year earlier. Revenues in the third quarter of 2012 were $729 million, compared with revenues of $878 million in the third quarter of 2011.
Since the start of the third quarter of 2012, the Company entered into 13 new agreements that are expected to generate maximum total revenue of approximately $1.7 billion and 12.1 rig-years of contract drilling backlog. Significant among these awarded contracts are the following:
| • | The Ocean Endeavor was awarded an 18-month contract at a dayrate of $505,000, plus a potential 6.6% performance bonus. The dayrate on the current contract is $285,000. The customer name and location of rig operation have not yet been announced. |
| • | The Ocean Lexington was awarded a 477-day job in Trinidad at a rate of $300,000 per day versus its current rate of $277,000 per day. The rig will be mobilized to Trinidad upon completion of its current contracted term in Brazil. |
| • | The Ocean Valiant received a two-well contract extension for work offshore Equatorial Guinea. The new rate will be $515,000 per day versus the current contract rate of $375,000 per day. |
| • | The Ocean America was awarded an 18-month contract for work offshore Australia at a dayrate of $475,000. The rig is currently contracted at a rate of $405,000 per day. |
“We posted excellent operating results for the quarter and announced several new contracts at strong dayrates across all ranges of water depths,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. “Our results for the quarter benefited from lower than anticipated operating expense, primarily owing to our continued emphasis on controlling costs.”
“During the quarter, we entered into a $750 million revolving credit facility, which will provide additional flexibility to our already strong balance sheet, as we complete construction of six new rigs over the next two years,” said Dickerson. “Among our industry peers, Diamond Offshore’s balance sheet is the least levered, and we enjoy the highest credit ratings.”
CONFERENCE CALL
Diamond Offshore will host a conference call to discuss third quarter results on Thursday, October 18, 2012 beginning at 9:00 a.m. CDT. 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 35359805. An online replay will also be available on www.diamondoffshore.com following the call.
ABOUT DIAMOND OFFSHORE
Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling. Diamond Offshore’s fleet of offshore drilling rigs consists of 30 semisubmersibles, seven jack-ups and one drillship, in addition to four ultra-deepwater drillships and two deepwater semisubmersibles currently under construction. For additional information and access to SEC filings, please visit the Company’s website at www.diamondoffshore.com. Diamond Offshore is a 50.4% owned subsidiary of Loews Corporation (NYSE: L).
FORWARD-LOOKING STATEMENTS
Maximum contract revenue as stated above assumes 100% rig utilization. Generally, rig utilization rates approach 92-98% during contracted periods; however, utilization rates can be adversely impacted by additional downtime due to unscheduled repairs, maintenance and weather. Additional information on Diamond Offshore Drilling, Inc. (“the Company”) and access to the Company’s SEC filings is available on the Internet at www.diamondoffshore.com.
Statements contained in this press release 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 future revenues and backlog, future performance under contract awards and extensions, future operations and dayrates, future financial condition, market outlook and future market conditions, future rig construction and future contracting opportunities. 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
2
reports are available through the Company’s website at www.diamondoffshore.com. These factors include, among others, general economic and business conditions, contract cancellations, customer bankruptcy, operating risks, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, 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.
# # # #
3
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, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues: |
||||||||||||||||
| Contract drilling |
$ | 714,027 | $ | 861,511 | $ | 2,195,443 | $ | 2,520,030 | ||||||||
| Revenues related to reimbursable expenses |
15,114 | 16,666 | 40,528 | 54,032 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
729,141 | 878,177 | 2,235,971 | 2,574,062 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating expenses: |
||||||||||||||||
| Contract drilling, excluding depreciation |
357,281 | 391,369 | 1,159,635 | 1,141,739 | ||||||||||||
| Reimbursable expenses |
14,563 | 16,206 | 39,351 | 52,443 | ||||||||||||
| Depreciation |
99,207 | 101,175 | 300,069 | 303,523 | ||||||||||||
| General and administrative |
13,476 | 14,879 | 49,803 | 48,976 | ||||||||||||
| Bad debt recovery |
— | 4,734 | (1,018 | ) | (5,413 | ) | ||||||||||
| Gain on disposition of assets |
(208 | ) | (463 | ) | (79,285 | ) | (4,344 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
484,319 | 527,900 | 1,468,555 | 1,536,924 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
244,822 | 350,277 | 767,416 | 1,037,138 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
773 | 2,024 | 4,052 | 3,565 | ||||||||||||
| Interest expense |
(8,720 | ) | (15,874 | ) | (36,780 | ) | (60,144 | ) | ||||||||
| Foreign currency transaction gain (loss) |
(1,860 | ) | (1,442 | ) | (881 | ) | (4,603 | ) | ||||||||
| Other, net |
(168 | ) | (136 | ) | (767 | ) | (232 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income tax expense |
234,847 | 334,849 | 733,040 | 975,724 | ||||||||||||
| Income tax expense |
(56,661 | ) | (77,995 | ) | (168,224 | ) | (201,672 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income |
$ | 178,186 | $ | 256,854 | $ | 564,816 | $ | 774,052 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income per share: |
||||||||||||||||
| Basic |
$ | 1.28 | $ | 1.85 | $ | 4.06 | $ | 5.57 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | 1.28 | $ | 1.85 | $ | 4.06 | $ | 5.57 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Shares of common stock |
139,030 | 139,027 | 139,029 | 139,027 | ||||||||||||
| Dilutive potential shares of common stock |
23 | 14 | 17 | 21 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total weighted average shares outstanding |
139,053 | 139,041 | 139,046 | 139,048 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
4
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
| Three Months Ended | ||||||||||||
| Sep 30, | Jun 30, | Sep 30, | ||||||||||
| 2012 | 2012 | 2011 | ||||||||||
| REVENUES |
||||||||||||
| Floaters: |
||||||||||||
| Ultra-Deepwater |
$ | 195,574 | $ | 233,071 | $ | 220,415 | ||||||
| Deepwater |
163,816 | 142,565 | 217,379 | |||||||||
| Mid-water |
319,491 | 310,462 | 377,127 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Floaters |
678,881 | 686,098 | 814,921 | |||||||||
| Jack-ups |
35,146 | 40,163 | 46,540 | |||||||||
| Other |
— | — | 50 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Contract Drilling Revenue |
$ | 714,027 | $ | 726,261 | $ | 861,511 | ||||||
|
|
|
|
|
|
|
|||||||
| Revenues Related to Reimbursable Expenses |
$ | 15,114 | $ | 11,927 | $ | 16,666 | ||||||
|
|
|
|
|
|
|
|||||||
| CONTRACT DRILLING EXPENSE |
||||||||||||
| Floaters: |
||||||||||||
| Ultra-Deepwater |
$ | 132,705 | $ | 137,087 | $ | 119,868 | ||||||
| Deepwater |
58,029 | 68,653 | 57,662 | |||||||||
| Mid-water |
135,935 | 160,642 | 163,957 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Floaters |
326,669 | 366,382 | 341,487 | |||||||||
| Jack-ups |
24,245 | 29,240 | 43,281 | |||||||||
| Other |
6,367 | 9,630 | 6,601 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Contract Drilling Expense |
$ | 357,281 | $ | 405,252 | $ | 391,369 | ||||||
|
|
|
|
|
|
|
|||||||
| Reimbursable Expenses |
$ | 14,563 | $ | 11,637 | $ | 16,206 | ||||||
|
|
|
|
|
|
|
|||||||
| OPERATING INCOME |
||||||||||||
| Floaters: |
||||||||||||
| Ultra-Deepwater |
$ | 62,869 | $ | 95,984 | $ | 100,547 | ||||||
| Deepwater |
105,787 | 73,912 | 159,717 | |||||||||
| Mid-water |
183,556 | 149,820 | 213,170 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Floaters |
352,212 | 319,716 | 473,434 | |||||||||
| Jack-ups |
10,901 | 10,923 | 3,259 | |||||||||
| Other |
(6,367 | ) | (9,630 | ) | (6,551 | ) | ||||||
| Reimbursable expenses, net |
551 | 290 | 460 | |||||||||
| Depreciation |
(99,207 | ) | (99,469 | ) | (101,175 | ) | ||||||
| General and administrative expense |
(13,476 | ) | (18,741 | ) | (14,879 | ) | ||||||
| Bad debt recovery (expense) |
— | 400 | (4,734 | ) | ||||||||
| Gain on disposition of assets |
208 | 53,695 | 463 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Operating Income |
$ | 244,822 | $ | 257,184 | $ | 350,277 | ||||||
|
|
|
|
|
|
|
|||||||
5
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| September 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 316,599 | $ | 333,765 | ||||
| Marketable securities |
1,175,572 | 902,414 | ||||||
| Accounts receivable, net of allowance for bad debts |
463,219 | 563,934 | ||||||
| Prepaid expenses and other current assets |
143,441 | 192,570 | ||||||
|
|
|
|
|
|||||
| Total current assets |
2,098,831 | 1,992,683 | ||||||
| Drilling and other property and equipment, net of accumulated depreciation |
4,835,715 | 4,667,469 | ||||||
| Other assets |
245,204 | 304,005 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 7,179,750 | $ | 6,964,157 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities |
$ | 432,698 | $ | 427,291 | ||||
| Long-term debt |
1,496,004 | 1,495,823 | ||||||
| Deferred tax liability |
534,767 | 536,815 | ||||||
| Other liabilities |
174,851 | 171,165 | ||||||
| Stockholders’ equity |
4,541,430 | 4,333,063 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 7,179,750 | $ | 6,964,157 | ||||
|
|
|
|
|
|||||
6
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
(Dayrate in thousands)
| Third Quarter | Second Quarter | Third Quarter | ||||||||||||||||||||||
| 2012 | 2012 | 2011 | ||||||||||||||||||||||
| Dayrate | Utilization | Dayrate | Utilization | Dayrate | Utilization | |||||||||||||||||||
| Ultra-Deepwater Floaters |
$ | 354 | 75% | $ | 354 | 89% | $ | 336 | 88% | |||||||||||||||
| Deepwater Floaters |
$ | 373 | 95% | $ | 372 | 83% | $ | 465 | 99% | |||||||||||||||
| Mid-Water Floaters |
$ | 258 | 71% | $ | 262 | 66% | $ | 268 | 70% | |||||||||||||||
| Jack-Ups |
$ | 98 | 56% | $ | 94 | 49% | $ | 84 | 44% | |||||||||||||||
7