ZUG, Switzerland, Jan. 25, 2012 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported fourth quarter 2011 earnings of $127 million, or $0.50 per diluted share, compared to $135 million, or $0.53 per diluted share, for the third quarter of 2011. Earnings for the fourth quarter 2010 totaled $99 million, or $0.39 per diluted share. Contract drilling services revenues for the fourth quarter of 2011 were $720 million compared to $705 million in the third quarter of 2011 and $614 million in the fourth quarter of 2010.
Earnings for the full year 2011 totaled $371 million, or $1.46 per diluted share, on contract drilling services revenues of $2.6 billion. The results compared to earnings of $773 million, or $3.02 per diluted share on contract drilling services revenues of $2.7 billion in 2010.
"During the fourth quarter, we continued to make progress in our newbuild program, with two more of our ultra-deepwater drillships, the Noble Bully II and Noble Globetrotter I, departing shipyards, bringing to three the number of new technically advanced drillships scheduled to commence contracts during the first quarter of 2012," said David W. Williams, Chairman, President and Chief Executive Officer. "These units, and the other five drillships and six high-specification jackup rigs currently under construction, are intended to enhance our competitive position and long-term revenue growth potential by equipping us to meet the most complex drilling needs of our customers. Also, improving industry activity allowed us to place several rigs back into active status in the quarter, including the semisubmersible Noble Paul Romano and jackup rigs Noble Gene House, Noble Joe Beall and Noble Dick Favor. From a backlog perspective, we added approximately $1 billion in contract commitments (net of backlog rolloff) during 2011, including over $840 million net in the fourth quarter of 2011, resulting in total contract backlog of $13.7 billion at December 31, 2011. Some of these contract awards allowed us to enter or enhance our presence in operating regions, such as Australia, the Mediterranean and Saudi Arabia, supporting our strategic objective of increased geographic diversification.
While we continue to work on our initiatives to mitigate fleet downtime, some of our semisubmersibles and drillships again experienced unacceptable levels of non-productive time, resulting in lower than expected revenues in the fourth quarter and unfavorably impacting operating costs, which hampered our margins. Reducing fleet downtime is a Company-wide focus as we begin 2012," noted Williams.
Contract drilling services revenues for the fourth quarter 2011 of $720 million improved 2 percent from the third quarter 2011 and 17 percent from the fourth quarter 2010. Contract drilling margin for the fourth quarter 2011 was approximately 47 percent, compared to 49 percent and 46 percent in the third quarter of 2011 and fourth quarter of 2010, respectively. The Company's revenues and operating margins over the past year were, in part, negatively impacted by the drilling moratorium and reduced pace of well permitting in the U.S. Gulf of Mexico that followed the Macondo incident.
Net cash from operating activities was $285 million in the fourth quarter 2011 and $759 million for full year 2011. Capital expenditures in the fourth quarter 2011 totaled $652 million, including $390 million (excluding capitalized interest) related to the Company's fleet expansion program. For the year, capital expenditures amounted to $2.6 billion, including $1.7 billion (excluding capitalized interest) associated with the fleet expansion program. Debt as a percentage of total capitalization increased slightly to approximately 33 percent at December 31, 2011, from approximately 32 percent at the end of the third quarter 2011.
Operating Highlights
At year-end 2011, approximately 68 percent of the Company's available rig operating days were committed for 2012, including 69 percent of the floating rig days and 72 percent of the jackup fleet days.
In the U.S. Gulf of Mexico, deepwater drilling activity remained robust as operators continued to initiate drilling programs slowed by the well permitting process. Short- and long-term requirements of operators are increasingly apparent, as evidenced by the recent contract award for the ultra-deepwater semisubmersible rig Noble Jim Day covering three-years at a dayrate of $530,000, excluding a 15 percent bonus opportunity. The contract is expected to commence in early 2013. Approximately 10 months of the operating days that remain open on the rig in 2012 are expected to be largely committed to short-term operator requirements. Also, the ultra-deepwater drillship Noble Bully I commenced client acceptance and testing procedures during the fourth quarter of 2011, with an expected date for completion and contract commencement of February 2012.
In Mexico, utilization of the Company's jackup rig fleet improved to 84 percent in the fourth quarter of 2011. Contract awards were secured for the jackups Noble Eddie Paul, Noble Bill Jennings and Noble Leonard Jones covering contract durations ranging from 1,068 days to 1,406 days. Dayrates for each rig improved to $112,000 from $100,000 previously. Also, the Company's deepwater semisubmersible rig Noble Max Smith completed a multi-year drilling assignment in December 2011 and is currently mobilizing to the U.S. Gulf of Mexico to complete maintenance and certifications. Operator interest for the rig remains strong.
In the North Sea, the Company's jackup rig fleet utilization remained at 100 percent in the fourth quarter and customers aggressively moved to secure rig commitments through 2012 and into 2013. The Company currently has four of its eight jackup rigs committed into 2013, with the remaining units committed to late 2012. Recently, the jackup Noble Byron Welliver was awarded a one-year contract at a dayrate of $122,000, up from a previous dayrate of $91,000. The rig is now committed until July 2013. In the Eastern Mediterranean Sea, the semisubmersible rig Noble Paul Romano began an estimated six-month contract, before options, following the mobilization of the rig from the U.S. Gulf of Mexico. Noble now has two deepwater semisubmersibles in the region, which is expected to offer additional contract opportunities as drilling results confirm compelling hydrocarbon prospects.
The Company's jackup rig fleet in the Middle East and India recorded utilization of 89 percent in the fourth quarter compared to 83 percent in the previous quarter in 2011. The jackup rigs Noble Gene House and Noble Joe Beall returned to active status in the quarter, with each rig commencing a three-year contract with Saudi Aramco. Also, the jackup rig Noble Charles Copeland was awarded a three-year contract from Saudi Aramco at a dayrate of $95,000. The contract is expected to commence in July 2012. The Company now has five jackup rigs under contract with Saudi Aramco.
Outlook
In closing, Williams commented, "As we enter 2012, Noble has a number of reasons to be optimistic. Our fleet transformation program is providing tangible results, with the initial three ultra-deepwater drillships expected to meaningfully contribute to operating results this year. Also, the direct negative fallout from the Macondo incident is largely behind us, and all of our active U.S. Gulf of Mexico-based semisubmersibles start the year at their full operating dayrates. In spite of continued global macroeconomic uncertainty, our industry continues to display signs of cyclical improvement, especially in the deepwater sector, where operator needs are building in multiple regions, supported by strong geologic success, stable crude oil prices, a growing interest in frontier locations, and larger exploration and production spending budgets. We are in a position in 2012 to benefit from this recovery, with available rig days to offer our clients on several deepwater units, including the Noble Jim Day, Noble Max Smith, Noble Amos Runner, Noble Paul Romano and Noble Homer Ferrington.
The Company remains focused on strong execution in our fleet expansion program and on several strategic initiatives, including expansion into key regions, improved revenue efficiency through lower fleet downtime and completion of our non-core fleet evaluation process. 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 rigs and six jackup drilling rigs currently under construction), located worldwide, including in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the Mediterranean, the North Sea, Brazil, West Africa and Asian Pacific. 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 2011 results on Thursday, January 26, 2012, at 8:00 a.m. U.S. Central 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: 20606604, 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 26, 2012, beginning at 11:00 a.m. U.S. Central Time, through Thursday, February 9, 2012, ending at 5:00 p.m. U.S. Central 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: 20606604. The replay will also be available on the Company's Web site following the end of the live call. The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the "Investor Relations" section of the Company's Web site under the heading "Regulation G Reconciliations."
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, ------------ ------------ 2011 2010 2011 2010 ---- ---- ---- ---- Operating revenues Contract drilling services $719,711 $614,418 $2,556,758 $2,695,493 Reimbursables 15,344 19,668 79,195 76,831 Labor contract drilling services 15,881 8,816 59,004 32,520 Other 109 883 875 2,332 --- --- --- ----- 751,045 643,785 2,695,832 2,807,176 ------- ------- --------- --------- Operating costs and expenses Contract drilling services 382,562 331,930 1,384,200 1,177,800 Reimbursables 8,642 14,955 58,439 59,414 Labor contract drilling services 8,559 5,486 33,885 22,056 Depreciation and amortization 171,186 154,463 658,640 539,829 Selling, general and administrative 18,494 20,736 91,377 91,997 Gain on contract extinguishments, net - - (21,202) - 589,443 527,570 2,205,339 1,891,096 ------- ------- --------- --------- Operating income 161,602 116,215 490,493 916,080 Other income (expense) Interest expense, net of amount capitalized (10,327) (4,338) (55,727) (9,457) Interest income and other, net (1,691) 2,693 1,484 9,886 ------ ----- ----- ----- Income before income taxes 149,584 114,570 436,250 916,509 Income tax provision (30,144) (16,276) (72,625) (143,077) ------- ------- ------- -------- Net income 119,440 98,294 363,625 773,432 ------- ------ ------- ------- Net income attributable to noncontrolling interests 7,563 464 7,273 (3) ----- --- ----- --- Net income attributable to Noble Corporation $127,003 $98,758 $370,898 $773,429 ======== ======= ======== ======== Net income per share Basic $0.50 $0.39 $1.46 $3.03 Diluted $0.50 $0.39 $1.46 $3.02
NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 31, ------------ 2011 2010 ---- ---- ASSETS Current assets Cash and cash equivalents $239,196 $337,871 Accounts receivable 587,163 387,414 Prepaid expenses and other current assets 233,253 186,509 ------- ------- Total current assets 1,059,612 911,794 --------- ------- Property and equipment 15,037,112 12,643,866 Accumulated depreciation (3,139,645) (2,595,779) ---------- ---------- Property and equipment, net 11,897,467 10,048,087 ---------- ---------- Other assets 538,080 342,506 ------- ------- Total assets $13,495,159 $11,302,387 =========== =========== LIABILITIES AND EQUITY Current liabilities Current maturities of long-term debt $- $80,213 Accounts payable 436,006 374,814 Accrued payroll and related costs 117,907 125,663 Taxes payable 94,920 96,448 Interest payable 54,419 40,260 Other current liabilities 123,928 84,049 ------- ------ Total current liabilities 827,180 801,447 ------- ------- Long-term debt 4,071,964 2,686,484 Deferred income taxes 242,791 258,822 Other liabilities 255,372 268,000 ------- ------- Total liabilities 5,397,307 4,014,753 --------- --------- Commitments and contingencies Equity Total shareholders' equity 7,406,521 7,163,003 Noncontrolling interests 691,331 124,631 Total equity 8,097,852 7,287,634 --------- --------- Total liabilities and equity $13,495,159 $11,302,387 =========== ===========
NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Year Ended December 31, ------------ 2011 2010 ---- ---- Cash flows from operating activities Net income $363,625 $773,432 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 658,640 539,829 Gain on contract extinguishments, net (21,202) - Deferred income tax provision (91,383) (41,409) Share-based compensation expense 31,904 34,930 Net change in other assets and liabilities (182,600) 347,594 Net cash from operating activities 758,984 1,654,376 ------- --------- Cash flows from investing activities New construction (1,671,057) (580,233) Other capital expenditures (657,286) (656,539) Major maintenance expenditures (189,212) (103,542) Capitalized interest (122,424) (83,170) Accrued capital expenditures and refunded deposits 99,689 139,185 Acquisition of FDR Holdings, Ltd., net of cash acquired - (1,629,644) Net cash from investing activities (2,540,290) (2,913,943) ---------- ---------- Cash flows from financing activities Increase in bank credit facilities, net 935,000 40,000 Proceeds from issuance of senior notes, net of debt issuance costs 1,087,833 1,238,074 Contributions from joint venture partners 536,000 35,000 Payments of joint venture debt (693,494) - Settlement of interest rate swaps (29,032) (6,186) Par value reduction payments (150,532) (227,325) Financing costs on credit facilities (2,835) - Proceeds from employee stock transactions 9,924 11,828 Repurchases of employee shares surrendered for taxes (10,233) (10,116) Repurchases of shares - (219,330) --- -------- Net cash from financing activities 1,682,631 861,945 --------- ------- Net change in cash and cash equivalents (98,675) (397,622) Cash and cash equivalents, beginning of period 337,871 735,493 ------- ------- Cash and cash equivalents, end of period $239,196 $337,871 ======== ========
NOBLE CORPORATION AND SUBSIDIARIES FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT (In thousands, except utilization amounts, operating days and average dayrates) (Unaudited) Three Months Ended September Three Months Ended December 31, 30, ------------------------------- ----------------------------- 2011 2010 2011 ---- ---- ---- Contract Contract Contract Drilling Drilling Drilling Services Other Total Services Other Total Services Other Total -------- ----- ----- -------- ----- ----- -------- ----- ----- Operating revenues Contract drilling services $719,711 $- $719,711 $614,418 $- $614,418 $704,892 $- $704,892 Reimbursables 18,046 (2,702) 15,344 19,179 489 19,668 14,646 2,792 17,438 Labor contract drilling services - 15,881 15,881 - 8,816 8,816 - 15,564 15,564 Other 109 - 109 883 - 883 8 - 8 --- --- --- --- --- --- --- --- --- $737,866 $13,179 $751,045 $634,480 $9,305 $643,785 $719,546 $18,356 $737,902 ======== ======= ======== ======== ====== ======== ======== ======= ======== Operating costs and expenses Contract drilling services $382,562 $- $382,562 $331,930 $- $331,930 $358,547 $- $358,547 Reimbursables 11,181 (2,539) 8,642 14,483 472 14,955 11,362 2,609 13,971 Labor contract drilling services - 8,559 8,559 - 5,486 5,486 - 8,053 8,053 Depreciation and amortization 169,574 1,612 171,186 151,256 3,207 154,463 162,837 3,376 166,213 Selling, general and administrative 18,242 252 18,494 20,571 165 20,736 27,212 324 27,536 $581,559 $7,884 $589,443 $518,240 $9,330 $527,570 $559,958 $14,362 $574,320 ======== ====== ======== ======== ====== ======== ======== ======= ======== Operating income $156,307 $5,295 $161,602 $116,240 $(25) $116,215 $159,588 $3,994 $163,582 ======== ====== ======== ======== ==== ======== ======== ====== ======== Operating statistics Jackups: Average Rig Utilization 86% 76% 82% Operating Days 3,386 3,019 3,229 Average Dayrate $89,049 $83,023 $89,352 Semisubmersibles Average Rig Utilization 88% 69% 84% Operating Days 1,134 826 1,086 Average Dayrate $318,013 $241,483 $315,034 Drillships: Average Rig Utilization 50% 90% 60% Operating Days 277 495 329 Average Dayrate $207,769 $302,753 $225,669 FPSO/ Submersibles: Average Rig Utilization 0% 11% 0% Operating Days - 31 - Average Dayrate $- $465,616 $- Total: Average Rig Utilization 79% 73% 76% Operating Days 4,797 4,371 4,644 Average Dayrate $150,027 $140,554 $151,782
NOBLE CORPORATION AND SUBSIDIARIES CALCULATION OF BASIC AND DILUTED NET INCOME (In thousands, except per share amounts) (Unaudited) The following table sets forth the computation of basic and diluted net income per share: Three months Twelve Months ended Ended December 31, December 31, ------------ ------------ 2011 2010 2011 2010 ---- ---- ---- ---- Allocation of net income Basic Net income attributable to Noble Corporation $127,003 $98,758 $370,898 $773,429 Earnings allocated to unvested share- based payment awards (1,221) (952) (3,727) (7,497) ------ ---- ------ ------ Net income to common shareholders - basic $125,782 $97,806 $367,171 $765,932 ======== ======= ======== ======== Diluted Net income attributable to Noble Corporation $127,003 $98,758 $370,898 $773,429 Earnings allocated to unvested share- based payment awards (1,219) (950) (3,719) (7,481) ------ ---- ------ ------ Net income to common shareholders - diluted $125,784 $97,808 $367,179 $765,948 ======== ======= ======== ======== Weighted average number of shares outstanding -basic 251,636 250,687 251,405 253,123 Incremental shares issuable from assumed exercise of stock options 414 687 584 813 Weighted average number of shares outstanding -diluted 252,050 251,374 251,989 253,936 ======= ======= ======= ======= Weighted average unvested share-based payment awards 2,442 2,439 2,552 2,438 ===== ===== ===== ===== Earnings per share Basic $0.50 $0.39 $1.46 $3.03 Diluted $0.50 $0.39 $1.46 $3.02
SOURCE Noble Corporation