Noble Corp.

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Press Release $NE Noble Corp.

0 COMMENTs 23 Jan
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Noble Corporation Reports Fourth Quarter and Full Year 2012 Earnings

ZUG, Switzerland, Jan. 23, 2013 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported fourth quarter 2012 earnings of $128 million, or $0.50 per diluted share, compared to $115 million, or $0.45 per diluted share, for the third quarter of 2012. Earnings for the fourth quarter 2011 totaled $127 million, or $0.50 per diluted share. Revenues for the fourth quarter of 2012 were $966 million compared to $884 million in the third quarter of 2012 and $751 million in the fourth quarter of 2011.

Earnings for the full year 2012 totaled $522 million, or $2.05 per diluted share, on revenues of $3.5 billion. The results compared to earnings of $371 million, or $1.46 per diluted share on revenues of $2.7 billion in 2011.

Addressing the Company's performance in the fourth quarter of 2012, David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation stated, "A company transformation as extensive as we are undertaking can be challenging, and as we saw in the fourth quarter, can produce inconsistent operating performance. Although Noble added three state-of-the-art, ultra-deepwater drillships to its fleet during 2012 and placed two other drillships into service following significant enhancement and maintenance programs, initial operations on these five rigs have not been as seamless as we had hoped, particularly with respect to certain critical components. Approximately 33 percent of the downtime days in the fourth quarter were attributable to these five rigs. In 2013, we are heavily focused on improving results from these rigs, our incoming newbuilds and the revenue efficiency of our entire fleet."

Contract drilling services revenues for the fourth quarter of 2012 of $922 million improved by $88 million, or 11 percent from the third quarter, due primarily to an increase in operating days following the return of several rigs to active service for all or a significant portion of the fourth quarter, and higher average dayrates, which improved 3 percent in the quarter. The increase in fleet operating days, in addition to costs associated with the repair and maintenance of rigs and mobilization and demobilization activity, contributed to a $35 million increase in contract drilling costs in the fourth quarter to $484 million, which compares to $449 million in the third quarter. Contract drilling margin for the fourth quarter was 47.5 percent, compared to 46.1 percent in the third quarter.

Williams also noted, "Milestones continue to be met in our newbuild program, putting us in a position this year to take delivery of three ultra-deepwater drillships from shipyards – the Noble Don Taylor, Noble Globetrotter II and Noble Bob Douglas – and three high-specification jackups – the Noble Mick O'Brien, Noble Regina Allen and Noble Houston Colbert. In addition, we secured contracts for two more of our JU3000N jackups. The Noble Houston Colbert has been awarded a minimum one-year contract at a base dayrate of $235,000, with the contract expected to commence during the fourth quarter of 2013. In addition, the Noble Sam Turner has been awarded a two-year contract at a dayrate of $215,000 for operations in the Dutch sector of the North Sea. This contract is expected to commence in the third quarter of 2014."

Jurong Shipyard in Singapore has successfully leveled the Noble Regina Allen, a JU3000N jackup under construction that tilted during a jacking system test in early December 2012.  Although no structural damage has been identified, an investigation into the cause of the incident is being conducted by the vessel designer, the shipyard and relevant government authorities.  The rig was originally scheduled for delivery during the first quarter of 2013; however, Noble has now been advised by the shipyard that, following completion of the repairs, the revised estimated delivery will be by the end of third quarter 2013.

Net cash from operating activities was $450 million in the fourth quarter 2012 and $1.4 billion for full year 2012.  Capital expenditures in the fourth quarter 2012 totaled $423 million, including $146 million (excluding capitalized interest) related to the Company's fleet expansion program. In 2012, capital expenditures amounted to $1.7 billion, including $587 million (excluding capitalized interest) associated with the fleet expansion program. At December 31, 2012, approximately $2.7 billion in capital expenditures (excluding capitalized interest) is required to complete the remaining 11 projects in the fleet expansion program.

Debt as a percentage of total capitalization at December 31, 2012 was 35.3 percent, unchanged from September 30, 2012.

Operating Highlights

At December 31, 2012, approximately 74 percent of the Company's available rig operating days were committed for 2013, including 81 percent of the floating rig days and 75 percent of the jackup rig days. For 2014, an estimated 50 percent of the available rig operating days were committed, including 71 percent and 42 percent of the floating and jackup rig days, respectively. Total backlog at December 31, 2012 was approximately $14.3 billion, up from $13.7 billion at December 31, 2011.

In the U.S. Gulf of Mexico, activity levels in 2012 improved significantly in the floating rig segment, with contracting opportunities, especially for deepwater and ultra-deepwater capable rigs.  The ultra-deepwater drillships Noble Bully I and Noble Globetrotter I, which commenced initial operations during the first half of 2012, completed the fourth quarter with improved utilization statistics compared to the third quarter of 2012, as both rigs continued to successfully address initial startup challenges. The Company's seven active rigs in the region remain under contract through late 2013. The average contract duration on three conventionally moored rigs exceeds one year, including a recent contract award for the semisubmersible Noble Driller covering five months at $405,000 per day, while four dynamically positioned rigs have an average contract duration of more than four years.

In Brazil, the Company completed the planned replacement of the drillship Noble Muravlenko with the Noble Phoenix during the fourth quarter of 2012, while the Noble Leo Segerius completed its first quarter of operations following the conclusion of a life-enhancement shipyard project. At present, six of the Company's eight floating rigs assigned to the region are operating and the semisubmersible Noble Max Smith and the drillship Noble Roger Eason are expected to commence operations during the first and third quarters of 2013, respectively, following shipyard programs. All eight of the Company's rigs in Brazil have contracts that extend into 2014 or beyond, including four rigs that are contracted into or beyond 2016.

The Company's 12 jackup rigs operating offshore Mexico experienced another strong quarter with all rigs under contract and 100 percent utilization during the period.  Three rigs in the region, which were expected to complete contracts in late 2012, the Noble Johnnie Hoffman, Noble John Sandifer and Noble Lewis Dugger, each received contract extensions to complete wells in progress that could run into the mid-to-late first quarter of 2013. The Noble Johnnie Hoffman and Noble John Sandifer are candidates for new contracts, with multi-year terms and improved dayrates. The contracts are expected to be awarded during the first quarter. The Company announced in December 2012 a definitive agreement to sell the Noble Lewis Dugger for $61 million. The transaction is expected to close by the end of the first quarter or early in the second quarter of 2013.

Utilization of the Company's North Sea and Mediterranean fleet, consisting of eight jackups and three semisubmersibles, was 95 percent in the fourth quarter, down slightly from the third quarter 2012. This decline was the result of the Noble Paul Romano completing its contract in early November. Activity, particularly in the North Sea, remains brisk and there are opportunities for multi-year contracts, such as the recent award for the Noble Julie Robertson with contract terms of one year at a dayrate of $160,000. The customer has the right to extend that contract up to a maximum of five years. At present, seven of the Company's eight jackups in the region are contracted into 2014.

The Company's Middle East and India division, consisting of 18 jackups, the drillship Noble Duchess and the semisubmersible Noble Clyde Boudreaux, completed the fourth quarter of 2012 with utilization of 85 percent, compared to 72 percent in the third quarter. Three rigs, which were idle in the third quarter while completing shipyard programs, returned to work during the fourth quarter, improving utilization. The Company currently has seven rigs in the two regions with availability during 2013, and contract opportunities are being evaluated for most of the rigs. The division is expected to remain active in 2013, especially in the jackup segment. One of the Company's two idle rigs in the Middle East, the Noble George McLeod, recently received a one-year contract for operations offshore Malaysia at a dayrate of $115,000. The contract is expected to commence in May 2013, following the mobilization of the rig. The Noble George McLeod will be the Company's first rig to operate in offshore Southeast Asia.

In West Africa, the customer for the jackup Noble Tommy Craighead exercised its last priced option,  carrying the rig through early August 2013 at a dayrate of $108,000.  In addition, the Company announced in December that it had entered into a definitive agreement to sell the Noble Don Walker for $18 million. This standard specification jackup unit had been previously cold stacked in Cameroon. This transaction is expected to close during the first quarter of 2013.

Outlook

In closing, Williams commented, "Our business appears poised for another year of cyclical expansion, supported by solid market fundamentals. We continue to see strong customer demand across all the regions in which we operate and are fortunate to have technologically advanced drilling units to offer clients as they plan exploration and production spending beyond 2013.

In 2013, Noble remains focused on several strategic initiatives, including strong execution of our fleet modernization program, improved revenue efficiency through lower fleet downtime, increased geographic diversity, with expansion into areas such as Southeast Asia, and progress toward our standard-specification asset divestment process.  As we move another year closer to transforming the Noble fleet to a premium asset base, we expect to have increased flexibility in our capital allocation plans for the future. We believe that Noble is well positioned to drive long-term, sustainable value for our shareholders and unparalleled service, safety and operational integrity for our customers."

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 fourth quarter and full year 2012 results on Thursday, January 24, 2013, at 8:00 a.m. U.S. Central Standard 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: 75232285, 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, January 24, 2013, beginning at 11:00 a.m. U.S. Central Standard Time, through Thursday, February 7, 2013, ending at 11:00 p.m. U.S. Central Standard 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: 75232285.  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


Twelve Months Ended




December 31,


December 31,




2012


2011


2012


2011

 Operating revenues 










 Contract drilling services 


$ 921,603


$ 719,711


$ 3,349,362


$ 2,556,758


 Reimbursables 


21,405


15,344


115,495


79,195


 Labor contract drilling services 


23,352


15,881


81,890


59,004


 Other 


7


109


265


875




966,367


751,045


3,547,012


2,695,832

 Operating costs and expenses 










 Contract drilling services 


483,843


382,562


1,776,481


1,384,200


 Reimbursables 


17,478


8,642


94,096


58,439


 Labor contract drilling services 


12,825


8,559


46,895


33,885


 Depreciation and amortization 


208,842


171,186


758,621


658,640


 Selling, general and administrative 


24,602


18,494


99,990


91,377


 Loss on impairment 


2,039


-


20,384


-


 Gain on contract settlements/extinguishments, net 


-


-


(33,255)


(21,202)




749,629


589,443


2,763,212


2,205,339











 Operating income 


216,738


161,602


783,800


490,493











 Other income (expense) 










 Interest expense, net of amount capitalized 


(28,980)


(10,327)


(85,763)


(55,727)


 Interest income and other, net 


662


(1,691)


5,188


1,484

 Income before income taxes 


188,420


149,584


703,225


436,250


 Income tax provision 


(53,981)


(30,144)


(147,088)


(72,625)

 Net income 


134,439


119,440


556,137


363,625


 Net income attributable to noncontrolling interests 


(6,862)


7,563


(33,793)


7,273

 Net income attributable to Noble Corporation 


$ 127,577


$ 127,003


$    522,344


$    370,898











 Net income per share 










 Basic 


$       0.50


$       0.50


$          2.05


$          1.46


 Diluted 


$       0.50


$       0.50


$          2.05


$          1.46

 

 

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 










 December 31, 


 December 31, 




2012


2011

 ASSETS 





 Current assets 






 Cash and cash equivalents 


$              282,092


$           239,196


 Accounts receivable 


743,673


587,163


 Prepaid expenses and other current assets 


274,426


233,253

 Total current assets 


1,300,191


1,059,612







 Property and equipment 


17,057,039


15,540,178


 Accumulated depreciation 


(4,031,067)


(3,409,833)

 Property and equipment, net 


13,025,972


12,130,345







 Other assets 


276,477


305,202


 Total assets 


$         14,602,640


$      13,495,159







 LIABILITIES AND  EQUITY 





 Current liabilities 






 Accounts payable 


$              350,147


$           436,006


 Accrued payroll and related costs 


132,728


117,907


 Dividend payable 


66,369


-


 Other current liabilities 


357,071


273,267

 Total current liabilities 


906,315


827,180







 Long-term debt 


4,634,375


4,071,964

 Deferred income taxes 


226,045


242,791

 Other liabilities 


347,615


255,372


 Total liabilities 


6,114,350


5,397,307







 Commitments and contingencies 











 Equity 






 Total shareholders' equity 


7,723,166


7,406,521


 Noncontrolling interests 


765,124


691,331


 Total equity 


8,488,290


8,097,852


 Total liabilities and equity 


$         14,602,640


$      13,495,159

 

 

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 (Unaudited) 




Twelve Months Ended




December 31,




2012


2011

 Cash flows from operating activities 






 Net income 


$   556,137


$   363,625


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





 Depreciation and amortization 


758,621


658,640


 Loss on asset impairment 


20,384


-


 Gain on contract extinguishments, net 


-


(21,202)


 Other changes in operating activities 


46,551


(260,823)


 Net cash from operating activities 


1,381,693


740,240







 Cash flows from investing activities 






 New construction 


(586,746)


(1,671,057)


 Other capital expenditures 


(763,977)


(657,286)


 Drilling equipment replacement and upgrades 


(183,113)


(170,468)


 Capitalized interest 


(135,975)


(122,424)


 Other investing activities 


(121,077)


99,689


 Net cash from investing activities 


(1,790,888)


(2,521,546)







 Cash flows from financing activities 






 Net change in borrowings on bank credit facilities 


(635,192)


935,000


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


1,186,636


1,087,833


 Contributions from joint venture partners 


40,000


536,000


 Payments of joint venture debt 


-


(693,494)


 Settlement of interest rate swaps 


-


(29,032)


 Par value reduction payments/dividends paid 


(138,293)


(150,532)


 Other financing activities 


(1,060)


(3,144)


 Net cash from financing activities 


452,091


1,682,631


 Net change in cash and cash equivalents 


42,896


(98,675)

 Cash and cash equivalents, beginning of period 


239,196


337,871

 Cash and cash equivalents, end of period 


$   282,092


$   239,196

 

 

 

 NOBLE CORPORATION AND SUBSIDIARIES 

 FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT 

 (In thousands, except operating statistics) 

 (Unaudited) 






















Three Months Ended December 31,


Three Months Ended September 30,



2012


2011


2012



Contract






Contract






Contract







Drilling






Drilling






Drilling







Services


Other


Total


Services


Other


Total


Services


Other


Total

 Operating revenues 



















 Contract drilling services 


$ 921,603


$           -


$ 921,603


$ 719,711


$           -


$ 719,711


$ 833,212


$           -


$ 833,212

 Reimbursables 


21,043


362


21,405


18,046


(2,702)


15,344


27,087


1,050


28,137

 Labor contract drilling services 


-


23,352


23,352


-


15,881


15,881


-


22,667


22,667

 Other 


7


-


7


109


-


109


16


-


16



$ 942,653


$ 23,714


$ 966,367


$ 737,866


$ 13,179


$ 751,045


$ 860,315


$ 23,717


$ 884,032




















 Operating costs and expenses 



















 Contract drilling services 


$ 483,843


$           -


$ 483,843


$ 382,562


$           -


$ 382,562


$ 449,125


$           -


$ 449,125

 Reimbursables 


17,127


351


17,478


11,181


(2,539)


8,642


20,039


1,008


21,047

 Labor contract drilling services 


-


12,825


12,825


-


8,559


8,559


-


12,991


12,991

 Depreciation and amortization 


205,329


3,513


208,842


169,574


1,612


171,186


191,638


3,449


195,087

 Selling, general and administrative 


24,060


542


24,602


18,242


252


18,494


26,228


630


26,858

 Loss on impairment 


-


2,039


2,039


-


-


-


-


-


-

 Gain on contract settlements/extinguishments, net 


-


-


-


-


-


-


-


-


-



$ 730,359


$ 19,270


$ 749,629


$ 581,559


$   7,884


$ 589,443


$ 687,030


$ 18,078


$ 705,108




















 Operating income 


$ 212,294


$   4,444


$ 216,738


$ 156,307


$   5,295


$ 161,602


$ 173,285


$   5,639


$ 178,924




















 Operating statistics 



















 Jackups: 



















 Average Rig Utilization 


89%






86%






83%





 Operating Days 


3,520






3,386






3,285





 Average Dayrate 


$ 100,356






$   89,049






$   97,857
























 Semisubmersibles: 



















 Average Rig Utilization 


85%






88%






83%





 Operating Days 


1,096






1,134






1,067





 Average Dayrate 


$ 360,226






$ 318,013






$ 331,900
























 Drillships: 



















 Average Rig Utilization 


82%






50%






73%





 Operating Days 


679






277






590





 Average Dayrate 


$ 255,667






$ 207,769






$ 267,166
























 FPSO/Submersibles: 



















 Average Rig Utilization 


0%






0%






0%





 Operating Days 


-






-






-





 Average Dayrate 


$              -






$               -






$              -
























 Total: 



















 Average Rig Utilization 


83%






79%






78%





 Operating Days 


5,295






4,797






4,942





 Average Dayrate 


$ 174,065






$ 150,027






$ 168,608





 

 

 

 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 


 Twelve months ended 



December 31,


December 31,



2012


2011


2012


2011

 Allocation of net income 









 Basic 









 Net income attributable to Noble Corporation 


$    127,577


$    127,003


$    522,344


$    370,898

 Earnings allocated to unvested share-based payment awards 


(1,301)


(1,221)


(5,309)


(3,727)

 Net income to common shareholders - basic 


$    126,276


$    125,782


$    517,035


$    367,171










 Diluted 









 Net income attributable to Noble Corporation 


$    127,577


$    127,003


$    522,344


$    370,898

 Earnings allocated to unvested share-based payment awards 


(1,300)


(1,219)


(5,302)


(3,719)

 Net income to common shareholders - diluted 


$    126,277


$    125,784


$    517,042


$    367,179










 Weighted average number of  shares outstanding - basic 


252,722


251,636


252,435


251,405

 Incremental shares issuable from assumed exercise of stock options 


253


414


356


584

 Weighted average number of  shares outstanding - diluted 


252,975


252,050


252,791


251,989










 Weighted average unvested share-based payment awards 


2,604


2,442


2,592


2,552










 Earnings per share 









 Basic 


$          0.50


$          0.50


$          2.05


$          1.46

 Diluted 


$          0.50


$          0.50


$          2.05


$          1.46

 

 

 

SOURCE Noble Corporation

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