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Noble Corporation Reports First Quarter 2013 Earnings

17.04.2013  |  PR Newswire

ZUG, Switzerland, April 17, 2013 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported first quarter 2013 earnings of $150 million, or $0.59 per diluted share, compared to $128 million, or $0.50 per diluted share, for the fourth quarter of 2012. Earnings for the first quarter of 2012 totaled $120 million, or $0.47 per diluted share.  Revenues for the first quarter of 2013 were $971 million compared to $966 million in the fourth quarter of 2012 and $798 million in the first quarter of 2012.

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation stated, "During the first quarter, we saw an improvement in our operational performance across several regions, compared to the fourth quarter of 2012.  Two rigs accounted for most of the downtime in the quarter, the semisubmersibles Noble Clyde Boudreaux in Australia and in Brazil, the Noble Paul Wolff which experienced a failure of its wellhead connector bolts. Additional downtime was also experienced on the drillship Noble Globetrotter I in the U.S. Gulf, however, fleet-wide unplanned operational downtime improved by approximately 2 percentage points in the quarter from 7 percent in the fourth quarter of 2012.  While our performance improved in the quarter, achieving further reductions in downtime and improving operational performance remain key objectives for the Company."

Contract drilling services revenues for the first quarter of 2013 of $929 million improved by $7 million, or just under 1 percent from the fourth quarter of 2012. The increase was primarily driven by improved fleet utilization, which increased to 86 percent in the first quarter from 83 percent in the fourth quarter of 2012, coupled with a slight increase in average dayrates, which improved to $174,600 from $174,100 over the comparative period. Contract drilling services operating costs totaled $484 million in the first quarter of 2013, essentially unchanged from the fourth quarter of 2012. Contract drilling margin for the first quarter of 2013 was 47.9 percent, compared to 47.5 percent during the fourth quarter of 2012.

Net cash from operating activities was $203 million in the first quarter of 2013 as compared to $450 million for the fourth quarter of 2012.  The decline was primarily related to receivables issues with a major customer. These issues were resolved subsequent to March 31, 2013 and full payment is expected in the second quarter of 2013. Capital expenditures in the first quarter totaled $372 million, including $138 million (excluding capitalized interest) related to the Company's newbuild construction program. At March 31, 2013, approximately $2.6 billion in capital expenditures (excluding capitalized interest) is required to complete the remaining 11 projects in the Company's newbuild construction program. Total debt at March 31, 2013 was $4.8 billion, resulting in debt as a percentage of total capitalization of 36 percent, as compared to 35 percent at year end 2012.

Noble's first quarter of 2013 effective tax rate was 17 percent, compared with 29 percent in the fourth quarter 2012. The decrease in the effective tax rate was primarily due to changes in the geographic mix of pre-tax income and the recognition of certain discrete items in the quarter.

Operating Highlights

Total backlog at March 31, 2013 was approximately $14.0 billion compared to $14.3 billion at December 31, 2012.  At the end of the first quarter 2013, approximately 74 percent of the Company's available rig operating days were committed for the remainder of 2013, including 79 percent of the floating rig days and 76 percent of the jackup rig days. For 2014, an estimated 55 percent of the available rig operating days were committed, including 71 percent and 50 percent of the floating and jackup rig days, respectively.

In the U.S. Gulf of Mexico, which accounted for 31 percent of contract drilling services revenues in the first quarter, four of the region's seven active rigs experienced improved operating performance. Contract opportunities remain strong, especially for rigs addressing customer needs in deepwater, as evidenced by the recent two-year contract extension for the semisubmersible Noble Amos Runner at a dayrate of $450,000.

In Brazil, operational improvements were largely driven by better performance on the drillships Noble Bully II, Noble Phoenix and Noble Leo Segerius. Substantially offsetting the improvement was increased downtime on the semisubmersible Noble Paul Wolff, which experienced a failure of the wellhead connector bolts. The first quarter also saw the commencement of a three-year contract on the semisubmersible Noble Max Smith at a dayrate of $407,000, which contributed to a 2 percent improvement in average revenues from the region in the first quarter compared to the fourth quarter of 2012.

The Company's 12 jackup rigs operating offshore Mexico continued to achieve excellent operating performance. Recently, the Noble Johnnie Hoffman received a contract award covering three years at a dayrate of $101,500, up from its previous dayrate of $80,000. Contract opportunities remain encouraging for other Noble jackups in the region with near-term availability, as demand from PEMEX is expected to continue to grow. Previously the Company announced a definitive agreement to sell the Noble Lewis Dugger for $61 million. Due to extensions undertaken by the customer to complete the well in progress, the transaction is now expected to close during the second quarter of 2013.

The operating results for the Company's Europe and Mediterranean fleet remained strong during the first quarter of 2013, however, the Company saw the early termination of a contract for the semisubmersible Noble Homer Ferrington, due in part to well permitting delays experienced by the customer. Recently, the semisubmersible Noble Paul Romano was awarded a one-well program for work in the Eastern Mediterranean at a dayrate of $465,000. The contract is expected to commence in August 2013. Both the Romano and Ferrington continue to be marketed to customers inside and outside the Eastern Mediterranean. In the North Sea, the Company's eight jackups continue to experience near-full operating utilization with increasing interest from customers to contract rigs into 2014 and beyond, as evidenced by the three-year contract extension on the Noble Julie Robertson at a dayrate of $150,000, contracting the rig into April 2016.

The Company's Middle and Far East division experienced improved performance during the first quarter of 2013, primarily due to better operating performance on the drillship Noble Duchess operating offshore India, and a full quarter of operations on the jackup Noble Gus Androes, partially offset by downtime on the semisubmersible Noble Clyde Boudreaux in Australia. The Company continues to identify opportunities to address near-term availability in its Middle East jackup fleet, as evidenced by a three year contract extension on the Noble Harvey Duhaney at a dayrate of $111,500, up from a previous dayrate of $66,000.   

Finally, in West Africa, where the Company operates five jackups, revenues improved during the first quarter, primarily due to a full quarter of operations on the Noble Lloyd Noble following the completion of a shipyard project during the fourth quarter of 2012.

Outlook

In closing, Williams commented, "We are increasingly confident that key fundamental factors in our business will remain in place, supporting robust deep and shallow water drilling activity beyond 2013. We are evaluating a number of contract opportunities, both for existing rigs in our fleet, and those to be added this year and next, following the completion of construction programs. I believe Noble is in a strong position to secure many of these opportunities, given the geographic mix of our assets and the well-timed delivery of our newbuilds. Overall, Noble is on the right path to deliver improved execution and greater value to our shareholders."

About Noble

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 79 offshore drilling units (including five ultra-deepwater drillships and six 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 and Australia. Noble's shares are traded on the New York Stock Exchange under the symbol "NE." 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 has scheduled a conference call and webcast related to its first quarter 2013 results on Thursday, April 18, 2013, 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: 75234447, 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 18, 2013, beginning at 11:00 a.m. U.S. Central Daylight Time, through Thursday, May 2, 2013, 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: 75234447.  The replay will also be available on the Company's Web site following the end of the live call.

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF INCOME 

 (In thousands, except per share amounts) 

 (Unaudited) 










Three Months Ended




March 31, 




2013


2012

 Operating revenues 






 Contract drilling services 


$      928,737


$      746,310


 Reimbursables 


21,174


35,141


 Labor contract drilling services 


21,054


16,008


 Other 


10


231




970,975


797,690

 Operating costs and expenses 






 Contract drilling services 


484,087


420,011


 Reimbursables 


14,922


30,601


 Labor contract drilling services 


12,249


9,232


 Depreciation and amortization 


206,156


171,077


 General and administrative 


25,570


23,126


 Gain on contract extinguishment 


(1,800)


-




741,184


654,047







 Operating income 


229,791


143,643







 Other income (expense) 






 Interest expense, net of amount capitalized 


(27,301)


(10,496)


 Interest income and other, net 


(425)


1,785

 Income before income taxes 


202,065


134,932


 Income tax provision 


(34,352)


(21,589)

 Net income 


167,713


113,343


 Net loss (income) attributable to noncontrolling interests 


(17,653)


6,832

 Net income attributable to Noble Corporation 


$      150,060


$      120,175







 Net income per share 






 Basic 


$            0.59


$            0.47


 Diluted 


$            0.59


$            0.47

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 










 March 31,  


 December 31, 




2013


2012

 ASSETS 





 Current assets 






 Cash and cash equivalents 


$             214,528


$             282,092


 Accounts receivable 


887,759


743,673


 Prepaid expenses and other current assets 


326,278


279,560

 Total current assets 


1,428,565


1,305,325







 Property and equipment 


17,329,558


16,971,666


 Accumulated depreciation 


(4,144,693)


(3,945,694)

 Property and equipment, net 


13,184,865


13,025,972







 Other assets 


276,528


276,477


 Total assets 


$        14,889,958


$        14,607,774







 LIABILITIES AND  EQUITY 





 Current liabilities 






 Accounts payable 


$             319,674


$             350,147


 Accrued payroll and related costs 


118,706


132,728


 Dividend payable 


33,340


66,369


 Other current liabilities 


340,465


362,205

 Total current liabilities 


812,185


911,449







 Long-term debt 


4,844,193


4,634,375

 Deferred income taxes 


223,500


226,045

 Other liabilities 


347,395


347,615


 Total liabilities 


6,227,273


6,119,484







 Commitments and contingencies 











 Equity 






 Total shareholders' equity 


7,879,908


7,723,166


 Noncontrolling interests 


782,777


765,124


 Total equity 


8,662,685


8,488,290


 Total liabilities and equity 


$        14,889,958


$        14,607,774

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 (Unaudited) 




Three Months Ended




March 31, 




2013


2012

 Cash flows from operating activities 






 Net income 


$            167,713


$            113,343


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





 Depreciation and amortization 


206,156


171,077


 Other changes in operating activities 


(171,317)


(183,794)


 Net cash from operating activities 


202,552


100,626







 Cash flows from investing activities 






 New construction 


(137,893)


(133,075)


 Other capital expenditures 


(148,568)


(161,243)


 Drilling equipment replacement and upgrades 


(55,654)


(29,928)


 Capitalized interest 


(29,875)


(40,637)


 Other investing activities 


(66,312)


(127,393)


 Net cash from investing activities 


(438,302)


(492,276)







 Cash flows from financing activities 






 Net change in borrowings on bank credit facilities 


209,680


(825,000)


 Proceeds from issuance of senior notes, net of debt issuance costs 


-


1,186,636


 Contributions from joint venture partners 


-


40,000


 Par value reduction payments/dividends paid 


(33,335)


(36,370)


 Other financing activities 


(8,159)


(3,972)


 Net cash from financing activities 


168,186


361,294


 Net change in cash and cash equivalents 


(67,564)


(30,356)

 Cash and cash equivalents, beginning of period 


282,092


239,196

 Cash and cash equivalents, end of period 


$            214,528


$            208,840

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT 

 (In thousands, except operating statistics) 

 (Unaudited) 






















Three Months Ended March 31,


Three Months Ended December 31,



2013


2012


2012



Contract






Contract






Contract







Drilling






Drilling






Drilling







Services


Other


Total


Services


Other


Total


Services


Other


Total

 Operating revenues 



















 Contract drilling services 


$   928,737


$             -


$    928,737


$    746,310


$              -


$    746,310


$    921,603


$           -


$    921,603

 Reimbursables 


20,711


463


21,174


34,702


439


35,141


21,043


362


21,405

 Labor contract drilling services 


-


21,054


21,054


-


16,008


16,008


-


23,352


23,352

 Other 


10


-


10


231


-


231


7


-


7



$   949,458


$   21,517


$    970,975


$    781,243


$    16,447


$    797,690


$    942,653


$  23,714


$    966,367




















 Operating costs and expenses 



















 Contract drilling services 


$   484,087


$             -


$    484,087


$    420,011


$              -


$    420,011


$    483,843


$           -


$    483,843

 Reimbursables 


14,469


453


14,922


30,173


428


30,601


17,127


351


17,478

 Labor contract drilling services 


-


12,249


12,249


-


9,232


9,232


-


12,825


12,825

 Depreciation and amortization 


202,619


3,537


206,156


167,948


3,129


171,077


205,329


3,513


208,842

 General and administrative 


24,949


621


25,570


22,844


282


23,126


24,060


542


24,602

 Loss on impairment 


-


-


-


-


-


-


-


2,039


2,039

 Gain on contract extinguishment 


(1,800)


-


(1,800)


-


-


-


-


-


-



$   724,324


$   16,860


$    741,184


$    640,976


$    13,071


$    654,047


$    730,359


$  19,270


$    749,629




















 Operating income 


$   225,134


$     4,657


$    229,791


$    140,267


$      3,376


$    143,643


$    212,294


$    4,444


$    216,738




















 Operating statistics 



















 Jackups: 



















 Average Rig Utilization 


93%






79%






89%





 Operating Days 


3,598






3,089






3,520





 Average Dayrate 


$   105,559






$       90,382






$    100,356
























 Semisubmersibles: 



















 Average Rig Utilization 


84%






86%






85%





 Operating Days 


1,053






1,092






1,096





 Average Dayrate 


$   321,037






$    355,098






$    360,226
























 Drillships: 



















 Average Rig Utilization 


83%






51%






82%





 Operating Days 


669






285






679





 Average Dayrate 


$   315,216






$    278,693






$    255,667
























 FPSO/Submersibles: 



















 Average Rig Utilization 


0%






0%






0%





 Operating Days 


-






-






-





 Average Dayrate 


$              -






$               -






$              -
























 Total: 



















 Average Rig Utilization 


86%






74%






83%





 Operating Days 


5,320






4,466






5,295





 Average Dayrate 


$   174,578






$    167,124






$    174,065





 

 NOBLE CORPORATION 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, 



2013


2012

 Allocation of net income 





 Basic 





 Net income attributable to Noble Corporation 


$    150,060


$    120,175

 Earnings allocated to unvested share-based payment awards 


(1,667)


(1,126)

 Net income to common shareholders - basic 


$    148,393


$    119,049






 Diluted 





 Net income attributable to Noble Corporation 


$    150,060


$    120,175

 Earnings allocated to unvested share-based payment awards 


(1,664)


(1,125)

 Net income to common shareholders - diluted 


$    148,396


$    119,050






 Weighted average number of  shares outstanding - basic 


253,073


251,971

 Incremental shares issuable from assumed exercise of stock options 


268


491

 Weighted average number of  shares outstanding - diluted 


253,341


252,462






 Weighted average unvested share-based payment awards 


2,844


2,407






 Earnings per share 





 Basic 


$          0.59


$          0.47

 Diluted 


$          0.59


$          0.47

 

SOURCE Noble Corporation

For Investors, Jeffrey L. Chastain, Vice President - Investor Relations and Corporate Communications, Noble Drilling Services Inc., +1-281-276-6383, or For Media: John S. Breed, Director of Investor Relations and Corporate Communications, Noble Drilling Services Inc., +1-281-276-6729