Diamond Offshore Announces First Quarter 2017 Results

HOUSTON, May 1, 2017 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported results for the first quarter of 2017.

 


Three Months Ended


Thousands of dollars, except per share data

March 31, 2017

December 31, 2016

Change

Total revenues

$            374,226

$           391,874

(5)%

Operating income

50,859

104,145

(51)%

Net income

23,539

116,082

(80)%

Earnings per diluted share

$                  0.17

$                 0.85

(80)%

 

"Despite a continually challenging market, Diamond Offshore achieved earnings per share of $0.17 for the first quarter of 2017," said Marc Edwards, President and Chief Executive Officer. "Overall, I am pleased with our first quarter results and our ability to manage costs, while remaining focused on maintaining our operational and technical excellence. The Ocean GreatWhite, Ocean Scepter and the Ocean BlackRhino all commenced term contracts in the first quarter, enhancing our already strong liquidity." Edwards went on to say, "During the first quarter, the Ocean BlackLion successfully drilled and completed one of the deepest and most complex wells on record in the Gulf of Mexico."

Also during the quarter, the Company executed new contracts for the Ocean Monarch in Australia, the first of which is scheduled to commence in late first quarter of 2018. Combined, these contracts add nine months of backlog and will keep the Ocean Monarch contracted through 2018. Additionally, the Company executed a new two-year term contract with Apache for the Ocean Patriot in the North Sea. The rig is scheduled to commence its new program in the second quarter of 2018.

As of March 31, 2017, the Company's total contracted backlog was $3.2 billion, which represents 23 rig years of work.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 7:30 a.m. CDT today.  A live webcast of the call will be available online on the Company's website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 844-492-6043 or 478-219-0839, for international callers. The conference ID number is 1792549. An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe. Additional information and access to the Company's SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release or made during the above conference call that are not historical facts are "forward-looking statements" within the meaning of the federal securities laws.  Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company.  A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission, and readers of this press release are urged to review those reports carefully when considering these forward-looking statements.  Copies of these reports are available through the Company's website at www.diamondoffshore.com.  These risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, many of which are beyond the Company's control.  Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements.  Each forward-looking statement speaks only as of the date of this press release.  The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

 

 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)



Three Months Ended,


March 31,


2017


2016





Revenues:




      Contract drilling

$

363,557


$

443,523

      Revenues related to reimbursable expenses

10,669


27,020

         Total revenues

374,226


470,543





Operating expenses:




      Contract drilling, excluding depreciation

203,523


212,841

      Reimbursable expenses

10,478


26,791

      Depreciation

93,229


104,240

      General and administrative

17,483


15,398

      Gain on disposition of assets

(1,346)


(296)

         Total operating expenses

323,367


358,974





Operating income

50,859


111,569





Other income (expense):




      Interest income

175


173

      Interest expense

(27,596)


(25,516)

      Foreign currency transaction gain (loss)

1,087


(3,608)

      Other, net

(63)


578





Income before income tax (expense) benefit

24,462


83,196





Income tax (expense) benefit

(923)


4,229





Net income

$

23,539


$

87,425





Income per share

$

0.17


$

0.64





Weighted-average shares outstanding:




   Shares of common stock

137,173


137,162

   Dilutive potential shares of common stock

77


44

      Total weighted-average shares outstanding

137,250


137,206

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

(Unaudited)

 (In thousands)




Three Months Ended


March 31,


December 31,


March 31,


2017


2016


2016







REVENUES






   Floaters:






      Ultra-Deepwater

$

243,465


$

231,820


$

325,961

      Deepwater

67,943


64,678


59,117

      Mid-Water

48,285


88,130


47,672

            Total Floaters

359,693


384,628


432,750

   Jack-ups

3,864


18


10,773

Total Contract Drilling Revenue

363,557


384,646


$

443,523







Revenues Related to Reimbursable Expenses

$

10,669


$

7,228


$

27,020







CONTRACT DRILLING EXPENSE






   Floaters:






      Ultra-Deepwater

$

141,873


$

119,490


$

123,736

      Deepwater

33,080


30,481


47,509

      Mid-Water

19,267


16,814


23,884

         Total Floaters

194,220


166,785


195,129

   Jack-ups

5,323


3,090


6,055

   Other

3,980


4,467


11,657

Total Contract Drilling Expense

$

203,523


$

174,342


$

212,841







Reimbursable Expenses

$

10,478


$

6,775


$

26,791







OPERATING INCOME






   Floaters:






      Ultra-Deepwater

$

101,592


$

112,330


$

202,225

      Deepwater

34,863


34,197


11,608

      Mid-Water

29,018


71,316


23,788

         Total Floaters

165,473


217,843


237,621

   Jack-ups

(1,459)


(3,072)


4,718

   Other

(3,980)


(4,467)


(11,657)

   Reimbursable expenses, net

191


453


229

   Depreciation

(93,229)


(86,031)


(104,240)

   General and administrative expense

(17,483)


(14,786)


(15,398)

   Bad debt recovery

--


265


--

   Gain (loss) on disposition of assets

1,346


(6,060)


296

  Total Operating Income

$

50,859


$

104,145


$

111,569

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)






March 31,


December 31,


2017


2016

ASSETS




Current assets:




      Cash and cash equivalents

$

123,316


$

156,233

      Marketable securities

24


35

      Accounts receivable, net of allowance for bad debts

286,408


247,028

      Prepaid expenses and other current assets

105,355


102,111

      Asset held for sale

400


400

            Total current assets

515,503


505,807





Drilling and other property and equipment, net of accumulated depreciation

 

5,616,367


 

5,726,935

Other assets

137,073


139,135

            Total assets

$

6,268,943


$

6,371,877





LIABILITIES AND STOCKHOLDERS' EQUITY




Short-term borrowings

$

--


$

104,200

Other current liabilities

201,583


236,299

Long-term debt

1,981,169


1,980,884

Deferred tax liability

191,594


197,011

Other liabilities

120,602


103,349

Stockholders' equity

3,773,995


3,750,134

            Total liabilities and stockholders' equity

$

6,268,943


$

6,371,877


 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)



Three months ended

March 31,


2017


2016

Operating activities:




Net income

$

23,539


$

87,425

Adjustments to reconcile net income to net cash




provided by operating activities




  Depreciation

93,229


104,240

  Deferred tax provision

(5,988)


(45,254)

Other

17,367


19,957

Net changes in operating working capital

(29,471)


74,962

  Net cash provided by operating activities

98,676


241,330

 

Investing activities:




Capital expenditures (including rig construction)

(29,487)


(58,114)

Proceeds from disposition of assets, net of disposal costs

2,097


113,295

Other

11


11

  Net cash (used in) provided by investing activities

(27,379)


55,192

 

Financing activities:




Repayment of short-term borrowings, net

(104,200)


(286,589)

Other

(14)


(33)

  Net cash used in financing activities

(104,214)


(286,622)

 

Net change in cash and cash equivalents

(32,917)


9,900

Cash and cash equivalents, beginning of period

156,233


119,028

Cash and cash equivalents, end of period

$

123,316


$

128,928

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATE, UTILIZATION AND OPERATIONAL EFFICIENCY

(Dayrate in thousands)



First Quarter

2017

Fourth Quarter

2016

First Quarter

2016


 

Average

Dayrate (1)

 

 

Utilization (2)

 

Operational Efficiency

(3)

 

Average

Dayrate (1)

 

 

Utilization (2)

 

Operational Efficiency

(3)

 

Average

Dayrate

(1)

 

 

Utilization (2)

 

Operational Efficiency

(3)





















Ultra-Deepwater Floaters

$450

50%

91.1%

$456

49%

92.0%

$533

61%

98.4%











Deepwater Floaters

$260

48%

96.6%

$287

39%

92.1%

$334

28%

97.1%











Mid-Water floaters

$268

40%

100.0%

$478

35%

99.9%

$263

25%

97.7%











Jack-ups

$75

29%

99.9%

--

--

--

$118

18%

100.0%











Fleet Total



94.3%



93.5%



98.2%











(1)  Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue- earning day.  A revenue-earning day is defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and contract preparation days.


(2)  Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet (including cold-stacked rigs, but excluding rigs under construction).  Our current fleet includes four ultra-deepwater, three deepwater and three mid-water semisubmersible rigs that are cold stacked. 


(3)  Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.

 

Contact:           
Samir Ali
Sr. Director, Investor Relations & Corporate Development
(281) 647-4035

SOURCE Diamond Offshore Drilling, Inc.