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02.11.2017 22:05:00

Noble Corporation plc Reports Third Quarter 2017 Results

LONDON, Nov. 2, 2017 /PRNewswire/ -- Noble Corporation plc (NYSE: NE, the Company) today reported a net loss attributable to the Company for the three months ended September 30, 2017 of $97 million, or $0.40 per diluted share, on revenues of $266 million. The results include a pre-tax charge to operating expenses totaling $14 million, or $0.04 per diluted share, relating to damage sustained by two of the Company's cold-stacked semisubmersibles during Hurricane Harvey. Excluding the charge, the net loss attributable to Noble Corporation in the third quarter of 2017 would have been $87 million, or $0.36 per diluted share.

For the three months ended September 30, 2016, Noble Corporation reported a net loss attributable to the Company of $55 million, or $0.23 per diluted share, on revenues of $385 million.

A Non-GAAP supporting schedule is included with the statements and schedules attached to this press release and can also be found at www.noblecorp.com which provides a reconciliation for net income (loss), income tax and diluted earnings per share for the periods covered.

Commenting on results for the third quarter, David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation plc stated, "Our premium fleet continued to attract the attention of top-tier customers around the world, as demonstrated by the more than $200 million of new contract awards in the quarter, further bolstering our excellent contract coverage. Also, we continued to generate positive free cash flow, despite the challenging industry environment, while maintaining our traditional high standards of operational performance."

Contract drilling services revenues for the third quarter of 2017 totaled $260 million compared to $272 million in the preceding quarter of the year, which included a $6 million write-off of a derivative instrument relating to contingent customer payments. Fleet operating days in the third quarter declined six percent due primarily to the jackup rig fleet, which saw three rigs complete contracts during the quarter, in addition to downward dayrate adjustments and reduced bonus revenues. These items were partially offset by higher mobilization revenues and one additional calendar day in the quarter.

Contract drilling services costs in the third quarter totaled $165 million, and included the $14 million charge relating to the rigs damaged during Hurricane Harvey.  Excluding the charge, drilling services costs for the third quarter would have been $151 million. During the preceding quarter of 2017, contract drilling services costs were $162 million, which included a charge of $14 million relating to the write-off of a Pemex receivable. Excluding that charge, contract drilling services costs for the preceding quarter of 2017 would have been $148 million. The modest increase in contract drilling costs for the third quarter, when viewed on an adjusted basis, was largely due to the commencement of operations and higher mobilization expenses on the jackup Noble Tom Prosser following the rig's relocation to Australia, partially offset by a reduction in idle rig costs.

Operating Highlights

Utilization in the third quarter of the Company's 14 jackups was 81 percent compared to 93 percent in the preceding quarter, with the decline due primarily to fewer operating days for the Noble Regina Allen, Noble Houston Colbert and Noble Mick O'Brien, as all three units completed contracts over the quarter. The decline in operating days was partially offset by the Noble Tom Prosser, which in September commenced a contract offshore Australia following an idle period. The contract for the Noble Tom Prosser contributed to an increase in average daily revenues in the third quarter to $127,200 compared to $121,300 in the preceding quarter. Following the close of the third quarter, the Noble Houston Colbert was awarded a three-well, estimated one-year contract for work offshore Qatar. The contract, which is expected to commence in February 2018, increases to 13 the number of jackups currently under contract in the Noble fleet, with five units expected to complete contracts during the fourth quarter of 2017.

The Company's floating rig fleet, comprised of eight drillships and six semisubmersibles, reported utilization in the third quarter of 39 percent compared to 37 percent in the preceding quarter of the year. The slight improvement was due to an increase in operating days on the drillship Noble Bob Douglas. Average daily revenues for the third quarter were $253,300 compared to $273,700 in the preceding quarter. The decline followed lower revenues on the drillship Noble Globetrotter I, partially offset by higher average revenues on the Noble Globetrotter II andNoble Don Taylor. At the close of the third quarter, five of the Company's eight drillships were under contract, including the Noble Bob Douglas, which in July was awarded a three-year primary term contract for work offshore Guyana, with an expected contract commencement date of first or second quarter of 2018. Also, following the close of the third quarter, the rig was awarded an estimated 80-day drilling assignment in the U.S. Gulf of Mexico, with an expected contract commencement in late November 2017. With this latest award, the Noble Bob Douglas, which in late-October completed a drilling assignment offshore Suriname, is now expected to remain under contract into early-2021.  

The Company's contract backlog, which totaled approximately $3.2 billion at September 30, 2017, has remained essentially flat throughout 2017 following the addition of more than $800 million in contracts through the third quarter. Of the $3.2 billion total, which extends beyond 2022, an estimated $2.0 billion relates to the floating rig fleet, with $1.2 billion associated with the jackup fleet. Approximately 54 percent of the available rig operating days remaining in 2017 are committed to contracts, including 36 percent for the floating rig fleet and 73 percent for the jackup fleet. For 2018, 40 percent of available operating days are committed to contracts, including 34 percent and 46 percent of the floating and jackup rig days, respectively.  

Outlook

Addressing the outlook for the offshore industry, Williams stated, "We believe our industry continues to demonstrate that the early stages of recovery have begun. Discussions with customers about their future rig needs have intensified throughout the year and have resulted in contract awards across numerous regions. As we sharpen our focus on 2018, we expect these early signs of recovery to yield measurable benefits to Noble. Our current contract backlog of $3.2 billion is expected to provide revenues in 2018 that exceed $860 million, with revenues of over $700 million in 2019, and these estimates exclude contract awards since the conclusion of the third quarter and any future awards.  Also, our current expectation for 2018 is to generate positive free cash flow, as we have demonstrated in 2017."

About Noble Corporation plc

Noble is a leading offshore drilling contractor for the oil and gas industry. The Company owns and operates one of the most modern, versatile and technically advanced fleets in the offshore drilling industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 28 offshore drilling units, consisting of 14 drillships and semisubmersibles and 14 jackups, focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide. Noble is a public limited company registered in England and Wales with company number 08354954 and registered office at Devonshire House, 1 Mayfair Place, London, W1J 8AJ England. Additional information on Noble is available at www.noblecorp.com.

Forward-looking Disclosure Statement

Statements regarding contract backlog, future earnings, costs, expense management, revenue, rig demand, fleet condition, operational or financial performance, shareholder value, contract commitments, dayrates, contract commencements, contract extensions, renewals or renegotiations, letters of intent or award, industry fundamentals, customer relationships and requirements, strategic initiatives, future performance, growth opportunities, the offshore drilling market, market outlook, capital allocation strategies, our financial position, business strategy, taxes and tax rates, liquidity, competitive position, capital expenditures, financial flexibility, debt levels, debt repayment, the outcome of any dispute, litigation, audit or investigation, 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 or claims 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, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, market 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 also has scheduled a conference call and webcast related to its third quarter 2017  results on Friday, November 3, 2017, at 8:00 a.m. U.S. Central Daylight Time. Interested parties are invited to listen to the call by dialing 1-877-201-0168, or internationally 1-647-788-4901, using access code: 21884040, or by asking for the Noble Corporation plc conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Website. 

A replay of the conference call will be available on Friday, November 3, 2017, beginning at 11:00 a.m. U.S. Central Daylight Time, through Sunday, December 3, 2017, 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: 21884040.  The replay will also be available on the Company's Website following the end of the live call.

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

 (In thousands, except per share amounts) 

 (Unaudited) 














Three Months Ended


Nine Months Ended




September 30, 


September 30, 




2017


2016


2017


2016

 Operating revenues 










 Contract drilling services 


$  259,740


$  373,257


$   885,931


$  1,841,321


 Reimbursables and other 


6,472


11,896


21,399


50,588




266,212


385,153


907,330


1,891,909

 Operating costs and expenses 










 Contract drilling services 


165,028


207,204


487,784


702,628


 Reimbursables 


3,834


9,142


13,374


39,446


 Depreciation and amortization 


137,607


155,242


409,919


455,907


 General and administrative 


15,331


15,773


49,869


54,346


 Loss on impairment 


-


-


-


16,616




321,800


387,361


960,946


1,268,943











 Operating income (loss) 


(55,588)


(2,208)


(53,616)


622,966

 Other income (expense) 










 Interest expense, net of amount capitalized 


(72,887)


(52,569)


(219,543)


(166,975)


 Gain on extinguishment of debt, net 


-


-


-


11,066


 Interest income and other, net 


389


540


4,286


(1,443)

 Income (loss) from continuing operations before income taxes 


(128,086)


(54,237)


(268,873)


465,614


 Income tax benefit (provision) 


28,605


10,002


(210,589)


(40,317)

 Net income (loss) from continuing operations 


(99,481)


(44,235)


(479,462)


425,297

 Net loss from discontinued operations, net of tax 


-


-


(1,486)


-

 Net income (loss) 


(99,481)


(44,235)


(480,948)


425,297


 Net (income) loss attributable to noncontrolling interests 


2,689


(10,846)


(10,888)


(52,027)

 Net income (loss) attributable to Noble Corporation plc 


$  (96,792)


$  (55,081)


$  (491,836)


$     373,270

 Net income (loss) attributable to Noble Corporation plc 










 Income (loss) from continuing operations 


$  (96,792)


$  (55,081)


$  (490,350)


$     373,270


 Net loss from discontinued operations, net of tax 


-


-


(1,486)


-


 Net income (loss) attributable to Noble Corporation plc 


$  (96,792)


$  (55,081)


$  (491,836)


$     373,270

 Per share data: 









 Basic: 










 Income (loss) from continuing operations 


$      (0.40)


$      (0.23)


$        (2.00)


$           1.48


 Loss from discontinued operations 


-


-


(0.01)


-


 Net income (loss) attributable to Noble Corporation 


$      (0.40)


$      (0.23)


$        (2.01)


$           1.48

 Diluted: 










 Income (loss) from continuing operations 


$      (0.40)


$      (0.23)


$        (2.00)


$           1.48


 Loss from discontinued operations 


-


-


(0.01)


-


 Net income (loss) attributable to Noble Corporation 


$      (0.40)


$      (0.23)


$        (2.01)


$           1.48

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONDENSED CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 










 September 30,  


 December 31, 




2017


2016

 ASSETS 





 Current assets 






 Cash and cash equivalents 


$             608,763


$           725,722


 Accounts receivable, net 


202,533


319,152


 Prepaid expenses and other current assets 


129,993


147,740

 Total current assets 


941,289


1,192,614







 Property and equipment, at cost 


12,421,765


12,364,888


 Accumulated depreciation 


(2,709,498)


(2,302,940)

 Property and equipment, net 


9,712,267


10,061,948







 Other assets 


244,663


185,555


 Total assets 


$        10,898,219


$      11,440,117







 LIABILITIES AND  EQUITY 





 Current liabilities 






 Current maturities of long-term debt 


$             249,652


$           299,882


 Accounts payable 


83,986


108,224


 Accrued payroll and related costs 


46,844


48,383


 Other current liabilities 


214,779


176,804

 Total current liabilities 


595,261


633,293







 Long-term debt  


3,795,327


4,040,229

 Other liabilities 


542,774


299,150


 Total liabilities 


4,933,362


4,972,672







 Commitments and contingencies 











 Equity 






 Total shareholders' equity 


5,286,962


5,758,681


 Noncontrolling interests 


677,895


708,764


 Total equity 


5,964,857


6,467,445


 Total liabilities and equity 


$        10,898,219


$      11,440,117

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 (Unaudited) 










Nine Months Ended




September 30, 




2017


2016

 Cash flows from operating activities 






 Net income (loss) 


$ (480,948)


$ 425,297


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






 Depreciation and amortization 


409,919


455,907


 Other long-term asset write-off 


28,689


-


 Loss on impairment 


-


16,616


 Gain on extinguishment of debt, net 


-


(11,066)


 Net change in operating activities 


341,420


73,614


 Net cash provided by operating activities 


299,080


960,368







 Cash flows from investing activities 






 New construction 


-


(431,031)


 Capital expenditures 


(74,363)


(145,069)


 Change in accrued capital expenditures 


(12,337)


(41,235)


 Capitalized interest 


-


(15,938)


 Net change in investing activities 


1,306


23,390


 Net cash used in investing activities 


(85,394)


(609,883)







 Cash flows from financing activities 






 Repayments of debt 


(300,000)


(322,207)


 Debt issuance costs on senior notes and credit facility 


(42)


-


 Premiums paid on early repayment of long-term debt 


-


(1,781)


 Dividend payments 


-


(47,534)


 Dividends paid to noncontrolling interests 


(26,293)


(61,980)


 Employee stock transactions 


(4,310)


(3,176)


 Net cash used in financing activities 


(330,645)


(436,678)


 Net decrease in cash and cash equivalents 


(116,959)


(86,193)

 Cash and cash equivalents, beginning of period 


725,722


512,245

 Cash and cash equivalents, end of period 


$  608,763


$ 426,052

 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT 

 (In thousands, except operating statistics) 

 (Unaudited) 






















Three Months Ended September 30,


Three Months Ended June 30,



2017


2016


2017



Contract






Contract






Contract







Drilling






Drilling






Drilling







Services


Other


Total


Services


Other


Total


Services


Other


Total

 Operating revenues 



















 Contract drilling services 


$ 259,740


$          -


$        259,740


$ 373,257


$          -


$ 373,257


$  271,532


$          -


$ 271,532

 Reimbursables and other 


6,472


-


6,472


11,896


-


11,896


6,610


-


6,610



$ 266,212


$          -


$        266,212


$ 385,153


$          -


$ 385,153


$  278,142


$          -


$ 278,142

 Operating costs and expenses 



















 Contract drilling services 


$ 165,028


$          -


$        165,028


$ 207,204


$          -


$ 207,204


$  162,371


$          -


$ 162,371

 Reimbursables 


3,834


-


3,834


9,142


-


9,142


4,394


-


4,394

 Depreciation and amortization 


131,819


5,788


137,607


149,398


5,844


155,242


130,763


5,831


136,594

 General and administrative 


15,331


-


15,331


15,773


-


15,773


18,658


-


18,658



$ 316,012


$   5,788


$        321,800


$ 381,517


$   5,844


$ 387,361


$  316,186


$   5,831


$ 322,017




















 Operating income (loss) 


$ (49,800)


$ (5,788)


$        (55,588)


$     3,636


$ (5,844)


$   (2,208)


$  (38,044)


$ (5,831)


$ (43,875)




















 Operating statistics 



















 Jackups: 



















 Average Rig Utilization 


81%






80%






93%





 Operating Days 


1,043






954






1,183





Average Dayrate


$ 127,163






$ 109,387






$ 121,284





 Semisubmersibles: 



















 Average Rig Utilization 


17%






13%






17%





 Operating Days 


92






92






91





Average Dayrate


$ 104,028






$ 293,269






$ 126,106





 Drillships: 



















 Average Rig Utilization 


56%






70%






52%





 Operating Days 


410






517






377





Average Dayrate


$ 286,819






$ 467,949






$ 309,313





 Total: 



















 Average Rig Utilization 


60%






59%






65%





 Operating Days 


1,545






1,563






1,651





Average Dayrate


$ 168,127






$ 238,869






$ 164,475





 

 NOBLE CORPORATION PLC AND SUBSIDIARIES 

 CALCULATION OF BASIC AND DILUTED NET INCOME PER SHARE 

 (In thousands, except per share amounts) 

 (Unaudited) 










 The following table presents the computation of basic and diluted net income per share: 



















Three Months Ended


Nine Months Ended



 September 30, 


 September 30, 



2017


2016


2017


2016

 Numerator:  









 Basic 









 Net income (loss) attributable to Noble -UK 


$ (96,792)


$ (55,081)


$ (491,836)


$ 373,270

 Net loss from discontinued operations, net of tax  


-


-


1,486


-

Earnings allocated to unvested share-based payment awards (1)


-


-


-


(12,754)

 Net income (loss) from continuing operations to common shareholders - basic 


$ (96,792)


$ (55,081)


$ (490,350)


$ 360,516










 Diluted 









 Net income (loss) attributable to Noble -UK 


$ (96,792)


$ (55,081)


$ (491,836)


$ 373,270

 Net loss from discontinued operations, net of tax  


-


-


1,486


-

 Net income (loss) from continuing operations to common shareholders - diluted 


$ (96,792)


$ (55,081)


$ (490,350)


$ 373,270










 Denominator: 









 Weighted average shares outstanding - basic 


244,940


243,224


244,666


243,089

Incremental shares issuable from assumed exercise of stock options and unvested share-based payment awards outstanding


-


-


-


8,600

 Weighted average shares outstanding - diluted 


244,940


243,224


244,666


251,689

 Earnings (loss) per share  









 Basic: 









 Continuing operations 


$     (0.40)


$     (0.23)


$       (2.00)


$       1.48

 Discontinued operations 


-


-


(0.01)


-

 Net income (loss) to Noble Corporation plc 


$     (0.40)


$     (0.23)


$       (2.01)


$       1.48










 Diluted: 









 Continuing operations 


$     (0.40)


$     (0.23)


$       (2.00)


$       1.48

 Discontinued operations 


-


-


(0.01)


-

 Net income (loss) to Noble Corporation plc 


$     (0.40)


$     (0.23)


$       (2.01)


$       1.48


(1)For the quarters ended September 30, 2017 and 2016, we experienced net losses from continuing operations, as well as the year ended September 30, 2017. As such, unvested share-based payment awards were excluded from the loss per share calculation during these periods, as the awards were anti-dilutive.

 


Non-GAAP Reconciliation




Certain non-GAAP performance measures and corresponding reconciliations to GAAP financial measures for the Company have been provided for meaningful comparisons between current results and prior operating periods. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. In order to fully assess the financial operating results, management believes that the results of operations, adjusted to exclude the following items, which are included in the Company's press release issued on November 2, 2017, and discussed in the related conference call on November 3, 2017, are appropriate measures of the continuing and normal operations of the Company: 



(i)

In the second and third quarter of 2017, a discrete tax item;



(ii)

In the second quarter of 2017, the Noble Max Smith write-off of receivables; and



(iii)

In the third quarter of 2017, the Noble Danny Adkins and Noble Jim Day related cost damage.




These non-GAAP adjusted measures should be considered in addition to, and not as a substitute for, or superior to, contract drilling revenue, contract drilling cost, contract drilling margin, average daily revenue, operating income, cash flows from operations, or other measures of financial performance prepared in accordance with GAAP. Please see the following Non-GAAP Financial Measures and Reconciliations for a complete description of the adjustments. 

 

NOBLE CORPORATION PLC AND SUBSIDIARIES

NON-GAAP MEASURES 

(In thousands, except per share amounts)

(Unaudited)























Reconciliation of Income tax provision


Three Months Ended,


Three Months Ended







September 30,


June 30,







2017


2016


2017


Income tax provision


$   28,605


$   10,002


$                       18,213













Adjustments









Noble Danny Adkins and Noble Jim Day rig damages


(4,845)


-


-


Total Adjustments


(4,845)


-


-


Adjusted income tax provision


$   23,760


$   10,002


$                       18,213























Reconciliation of net loss attributable to Noble Corporation plc


Three Months Ended,


Three Months Ended







September 30,


June 30,







2017


2016


2017













Net loss attributable to Noble Corporation plc


$ (96,792)


$ (55,081)


$                      (93,350)













Adjustments









Noble Danny Adkins and Noble Jim Day rig damages


9,425


-


-



Noble Max Smith write-off of receivables


-


-


14,419


Total Adjustments


9,425


-


14,419


Adjusted net loss attributable to Noble Corporation plc


$ (87,367)


$ (55,081)


$                      (78,931)























Reconciliation of diluted EPS attributable to continuing operations


Three Months Ended,


Three Months Ended







September 30,


June 30,







2017


2016


2017













Unadjusted diluted EPS


$     (0.40)


$     (0.23)


$                          (0.38)













Adjustments









Noble Danny Adkins and Noble Jim Day rig damages


0.04


-


-



Noble Max Smith write-off of receivables


-


-


0.06


Total Adjustments


0.04


-


0.06


Adjusted diluted EPS


$     (0.36)


$     (0.23)


$                          (0.32)

 

View original content:http://www.prnewswire.com/news-releases/noble-corporation-plc-reports-third-quarter-2017-results-300548842.html

SOURCE Noble Corporation

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