LOEWS CORPORATION 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 Second Quarter Third Quarter
2015 2015 2014
---- ---- ----
Revised Average
Average Operational Efficiency Average Operational Efficiency Dayrate (4) Operational Efficiency
Dayrate (1) Utilization (2) (3) Dayrate (1) Utilization (2) (3) Utilization (2) (3)
---------- -------------- --- ---------- -------------- --- -------------- ---
Ultra-Deepwater $479 71% 96.8% $483 63% 90.9% $491 77% 92.2%
Floaters
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 Daugherty
Director, Investor Relations
(281) 492-5370
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SOURCE Diamond Offshore Drilling, Inc.
