Northern Offshore Reports Fourth Quarter and Preliminary Full Year 2013 Results - WAFF-TV: News, Weather and Sports for Huntsville, AL

Northern Offshore Reports Fourth Quarter and Preliminary Full Year 2013 Results

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SOURCE Northern Offshore, Ltd.

HOUSTON, Feb. 19, 2014 /PRNewswire/ --

Highlights
(All $ in USD)

  • Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended December 31, 2013, of $5.9 million, or $0.04 per diluted share, on revenues of $46.8 million.
  • For the full year ended December 31, 2013, net income was $11.3 million, or $0.07 per diluted share.
  • First of two six-month option periods exercised for the Energy Endeavour.
  • Contract awarded for the Energy Searcher offshore Nigeria.
  • The company's directors have declared a dividend of $0.05 per share, or approximately $8.2 million.

Fourth Quarter and Year End Analysis

The net income for the three months ended December 31, 2013, of $5.9 million, or $0.04 per diluted share, on revenues of $46.8 million, compares to net income of $13.2 million, or $0.08 per diluted share, for the fourth quarter of 2012, on revenues of $48.8 million.  The financial results for the fourth quarter of 2012 included an after-tax gain of $7.5 million attributable to the sale of the jackup Energy Exerter.

The full year ended December 31, 2013, net income of $11.3 million, or $0.07 per diluted share, compares to 2012 net income of $19.2 million, or $0.12 per diluted share.  Revenues in 2013 were $174.9 million, as compared to $182.8 million reported in 2012.

Revenues for the three months ended December 31, 2013, were approximately $2.0 million lower than the same period of 2012, primarily as a result of a decrease in tariff revenues from the floating production facility Northern Producer due to lower production as compared to the same period last year, partially offset by an increase in revenue from the jackup Energy Enhancer due to higher average dayrate, as Maersk exercised the first of the three one-year option periods.

The tariff from the floating production facility Northern Producer averaged approximately $100,000 per day in the fourth quarter of 2013.  Production for the fourth quarter was lower compared to the prior year quarter primarily due to various maintenance operations at the field and unit level.  The company expects pricing levels to remain stable and production volume to normalize in the mid-teens near term.

Drilling and production expenses for the three months ended December 31, 2013, were $3.5 million lower than the same period of last year, primarily due to lower operating expenses for the drillship Energy Searcher, partially offset by higher operating expenses for the jackup Energy Endeavour due to higher labor and repair and maintenance costs, and an increase of expenses for the floating production facility Northern Producer due to higher cleaning and inspection costs.

Fourth quarter 2013 depreciation, general and administrative expenses, interest expense, amortization of financing fees and other financial items were comparable to those of the same period in 2012.

As of February 19, 2014, the company had an outstanding Revolving Credit Facility balance of $22.0 million and a cash balance of $34.8 million, resulting in a net cash position of $12.8 million.

The company's directors have declared a dividend of $0.05 per share, or approximately $8.2 million.  Shareholders of record with the VPS on February 28, 2014, will be entitled to receive the dividend, which will be paid on or around March 17, 2014.  The shares of the company will be trading ex-dividend from February 26, 2014.

The information contained in this press release is preliminary and is subject to change until the release of the 2013 annual report when approved by the Board of Directors.

Conference Call Information

Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, February 20, 2014, to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call 877 415 3185 (in the U.S.) or 857 244 7328 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 45993477.

The conference call also will be accessible by logging on to the company's website at http://www.northernoffshorelimited.com.  After logging on, go to "Investor Relations" and select the conference call webcast.

About the Company

Northern Offshore, Ltd. is a Bermuda holding company which operates offshore oil and gas drilling units and one production vessel in various markets around the world, including the North Sea, the Indian Ocean, Southeast Asia and West Africa. The company's fleet consists of four drilling units (a drillship, a semisubmersible and two jackup drilling rigs) and one floating production facility.  Additionally, the company has under construction two 350' high specification jackup drilling rigs, with delivery expected in the first and third quarters of 2016.  More information on Northern Offshore, Ltd. may be found by visiting the company's website at http://www.northernoffshorelimited.com.

For further information, please contact:
Brian Hefty at (713) 739-7686,
or via email at brian.hefty@northernoffshoreltd.com

This announcement contains statements that reflect the company's expectations or predictions of the future. These statements are forward-looking statements.  These forward-looking statements may include statements regarding earnings guidance, capital allocation strategy, the impact of activity levels, business performance, and other market and industry conditions.  The company's actual results could differ materially from those reflected in such forward-looking statements.  Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the company's regulatory filings.  The company disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)









 Three Months Ended 
December 31,  

Twelve Months Ended 
December 31, 

(Thousands of US Dollars, except per share amounts)

Q3 2013

2013

2012

2013

2012

Revenues

42,556

46,778

48,812

174,864

182,848

Operating expenses:






Drilling and production

(28,703)

(27,929)

(31,458)

(116,236)

(122,500)

Depreciation

(8,036)

(8,094)

(7,767)

(31,895)

(34,471)

General & administrative

(2,083)

(2,139)

(1,083)

(8,265)

(6,437)

Gain on disposal of assets

-

4

7,574

159

7,493

Total operating expenses

(38,822)

(38,158)

(32,734)

(156,237)

(155,915)

Operating income

3,734

8,620

16,078

18,627

26,933

Interest expense

(369)

(365)

(501)

(1,513)

(2,406)

Amortization of deferred financing fees

(123)

(116)

(123)

(483)

(512)

Other financial items

(795)

(300)

(193)

(1,680)

(681)

Total other expense

(1,287)

(781)

(817)

(3,676)

(3,599)

Income before taxes

2,447

7,839

15,261

14,951

23,334

Income taxes (expense)/benefit

230

(1,934)

(2,098)

(3,647)

(4,125)

Net income

2,677

5,905

13,163

11,304

19,209







Earnings per share (US$)






     Basic

0.01

0.04

0.08

0.07

0.12

     Diluted

0.01

0.04

0.08

0.07

0.12







Weighted average common shares (000's)






     Basic

157,556

157,625

156,134

157,377

155,940

     Diluted

157,556

157,625

156,134

157,420

155,940

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)




(Thousands of US Dollars)

December 31,
2013

December 31,
2012

Current assets 



Cash and cash equivalents

19,537

26,504

Restricted cash 

1,000

-

Accounts receivable, net

25,457

29,386

Prepaid expenses 

3,508

4,099

Deferred mobilization costs 

2,202

2,209

Deferred insurance premium

1,627

1,869

Other current assets

1,382

1,711

Total current assets

54,713

65,778

Noncurrent assets 



Property, plant & equipment, net

198,158

201,077

Restricted cash, net of current portion 

5,436

5,436

Noncurrent deposit/escrow account

9,222

5,198

Deferred mobilization costs, net of current portion

368

1,596

Drydock costs, net of current portion

2,859

5,093

Other noncurrent assets 

366

1,748

Total noncurrent assets

216,409

220,148

Total assets

271,122

285,926

Current liabilities



Accounts payable

9,275

13,377

Accrued expenses

20,196

13,131

Income taxes payable

1,282

933

Affiliated debt

22,000

22,000

Deferred revenue

-

2,062

Total current liabilities

52,753

51,503

Shareholders' equity



Share capital

40,933

40,122

Additional paid-in capital

175,462

170,985

Accumulated other comprehensive loss

(6,691)

(6,691)

Retained earnings

8,665

30,007

Total shareholders' equity

218,369

234,423

Total liabilities and shareholders' equity  

271,122

285,926

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Consolidated Statements of Cash Flows - (Unaudited)




Twelve months ended
December 31,

(Thousands of US Dollars)

2013

2012

Cash flows from operating activities



Net income

11,304

19,209

Adjustments to reconcile net income to net cash



  provided by operating activities:



Stock-based compensation 

5,684

4,043

Depreciation

31,895

34,471

Amortization of deferred financing fees

483

512

Gain on disposal of assets

(159)

(7,493)




Changes in operating assets and working capital



Accounts receivable

3,929

7,263

Prepaid expenses                          

591

(1,789)

Deferred mobilization costs

1,235

(3,449)

Other current and noncurrent assets

3,617

(2,695)

Accounts payable

(4,022)

(18,535)

Other accrued liabilities

4,384

5,193

Deferred revenue

(2,062)

(2,751)

Income taxes payable

349

(1,993)

Other, net

17

11

Net cash provided by operating activities

57,245

31,997




Cash flows from investing activities



Capital expenditures

(27,191)

(14,578)

Changes in restricted cash

(1,000)

7,604

Changes in noncurrent deposit/escrow account

(4,024)

(5,198)

Proceeds from disposal of assets, net

159

44,502

Net cash (used in)/provided by investing activities

(32,056)

32,330




Cash flows from financing activities



Proceeds from drawdown of revolver facility

-

24,564

Principal payments on revolver facility

-

(48,000)

Debt issuance costs

-

(405)

Payment for taxes on vested shares

(396)

(1,065)

Dividends paid

(31,760)

(23,518)

Net cash used in financing activities

(32,156)

(48,424)




Net changes in cash and cash equivalents

(6,967)

15,903

Cash and cash equivalents at beginning of period

26,504

10,601

Cash and cash equivalents at end of period

19,537

26,504




Supplemental disclosure of cash flow information



Cash paid during the period for:



    Income taxes

380

2,561

    Interest

834

2,802




Significant non-cash transactions during the period for:



Accrued capital expenditures

1,795

3,592

Accrued dividends

886

539

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

 Consolidated Statements of Shareholders' Equity

(Unaudited)








 

 

(Thousands of US Dollars)

 

Common
 
shares
('000)

 

 

Share 
capital

 

Additional

paid-in

capital

Accumulated
other
comprehensive
loss

 

Retained 

earnings

 

Total








Balance at December 31, 2011

158,184

39,546

168,583

(6,691)

34,855

236,293








Net income

-

-

-

-

19,209

19,209

Issuance of restricted stock

2,304

576

(576)

-

-

-

Payments for taxes on vested shares

-

-

(1,065)

-

-

(1,065)

Stock-based compensation 

-

-

4,043

-

-

4,043

Common shares dividends

-

-

-

-

(24,057)

(24,057)

Balance at December 31, 2012

160,488

40,122

170,985

(6,691)

30,007

234,423








Balance at December 31, 2012

160,488

40,122

170,985

(6,691)

30,007

234,423








Net income

-

-

-

-

11,304

11,304

Issuance of restricted stock

3,244

811

(811)

-

-

-

Payments for taxes on vested shares

-

-

(396)

-

-

(396)

Stock-based compensation 

-

-

5,684

-

-

5,684

Common shares dividends

-

-

-

-

(32,646)

(32,646)

Balance at December 31, 2013

163,732

40,933

175,462

(6,691)

8,665

218,369

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Results

(Unaudited)









 Three Months Ended 

 December 31, 

Twelve Months Ended

 December 31, 

(Thousands of US Dollars)

Q3 2013

2013

2012

2013

2012







Net income (GAAP)

2,677

5,905

13,163

11,304

19,209







Add Back:






Net interest expense

492

481

624

1,996

2,918

Income taxes

(230)

1,934

2,098

3,647

4,125

Depreciation

8,036

8,094

7,767

31,895

34,471

Other financial items

795

300

193

1,680

681







Adjusted EBITDA (Non-GAAP)

11,770

16,714

23,845

50,522

61,404


Adjusted EBITDA is defined as Net Income before Interest, Taxes, Depreciation and Other Financial Items

 

NORTHERN OFFSHORE, LTD. and SUBSIDIARIES

Operating Statistics

(Unaudited)









 Three Months Ended 

 December 31, 

 Twelve Months Ended 

 December 31, 


Q3 2013

2013

2012

2013

2012







Jackups (2)












Average rig utilization 

67%

91%

100%

87%

77%

Operating days 

123

167

184

637

565

Average revenue per day 

133,480

132,046

103,195

120,586

94,760







Drillship (1)












Average rig utilization 

0%

0%

0%

0%

62%

Operating days

0

0

0

0

225

Average revenue per day 

0

0

0

0

202,333







Semisubmersible (1)












Average rig utilization 

100%

100%

100%

100%

70%

Operating days

92

92

92

365

257

Average revenue per day

170,841

169,071

172,108

158,642

165,218







Total Drilling Rigs (4)












Average rig utilization 

58%

70%

75%

69%

72%

Operating days 

215

259

276

1,002

1,047

Average revenue per day 

149,467

145,198

126,456

134,448

135,172







Floating Production  Facility (1)












Days in period 

92

92

92

365

366

Production days

92

92

92

365

366

Average bpd

18,643

16,369

24,965

18,103

18,585

Average tariff revenue per day

111,855

98,217

149,789

108,568

111,509

Average other revenue per day 

1,415

1,474

1,408

1,422

1,395

Total average revenue per day 

113,270

99,691

151,197

109,990

112,904


Note 1: Operating days represent actual days under contract.


Note 2: Costs which are reimbursed by the client are included in the average revenue per day calculation.  


Note 3: Calculations for the jackup fleet for 2012 exclude Energy Exerter.

©2012 PR Newswire. All Rights Reserved.

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