Northern Offshore, Ltd. Reports First Quarter 2008 Financial Results
HOUSTON, May 28 /PRNewswire-FirstCall/ -- Northern Offshore, Ltd. reported net income for the three months ended March 31, 2008 of US$9.5 million, or US$0.06 per diluted share, compared to net income of US$25.3 million, or US$0.18 per diluted share for the first quarter of 2007. Revenues for the first quarter of 2008 were US$49.4 million compared to US$41.9 million for the first quarter of 2007.
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Northern Offshore President and CEO, Marion Woolie, commented, "Offshore drilling markets remained strong throughout the first quarter. As we continue to fill our company with talented people, and build our revenue backlog, I believe we will add significant value for our shareholders."
First Quarter Analysis
Revenues for the three months ended March 31, 2008 increased US$7.5 million compared to the same period of 2007. Revenue in the 2008 quarter included US$35.5 million from the three jackup rigs the company acquired in June 2007. Offsetting this growth was lower revenue on the Energy Driller, a semisubmersible that was being upgraded for a three-year contract, and lower revenue from the Northern Producer, a floating production platform which came off contract in June 2007. The Northern Producer is currently undergoing preparation for a new life-of-field contract in the U.K. North Sea.
Operating, general and administrative and DD&A expenses all showed significant year-over-year increases as a result of the three jackup rigs acquired during 2007. Similarly, the amortization of drilling contract intangibles increased US$9.9 million and interest expense was up US$6.4 million due to the 2007 rig acquisitions.
Operating Highlights
Several key milestones were achieved since the beginning of the year:
-- The floating production platform, Northern Producer, was delivered to
the client on March 1, 2008 and the company earned an early delivery
bonus of US$4.0 million. This revenue will be amortized from the
actual delivery date until September 7, 2008, the contractual delivery
date.
-- The Energy Driller underwent an upgrade to 1000 ft water depth
capability in preparation for a three-year contract with ONGC in India.
The rig has been accepted by ONGC and is expected to commence drilling
in early June, 2008.
-- The Energy Exerter completed its contract with Maersk Oil and Gas on
April 11, 2008 and is now under contract to a subsidiary of Gazprom and
preparing for its drilling program offshore northern Russia. In
addition, the Energy Exerter safety case was approved by the U.K.
Health and Safety Executive on May 21, 2008. This approval will
position the company to operate the rig in the U.K. sector of the North
Sea.
-- A regional shorebased operations headquarters was established in
Aberdeen, Scotland and will be responsible for managing all operations
in the North Sea and Russia.
Conference Call Information
Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CDT, May 29, 2008 to discuss the company's quarterly financial results. Individuals wishing to participate in the teleconference should call 866-202-3109 (in the U.S.) or 617-213-8844 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to passcode 52798356.
The conference call also will be accessible by logging on to the company's Web site at http://www.northernoffshorelimited.com/. After logging on, go to "Investor Relations" and select the conference call webcast.
About the Company
Northern Offshore is a Bermuda holding company which operates offshore oil and gas production and drilling vessels deployed around the world. The Company's recently updated fleet consists of one floating production facility and five drilling units including a drillship, a semisubmersible and three jackup drilling rigs. The vessels operate in various markets including the North Sea, the Indian Ocean, and Southeast Asia.
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
(Thousands of US Dollars, except Q4 2007 Q1 2008 Q1 2007 2007
per share amounts)
Revenue 43,626 49,373 41,877 176,109
Operating expenses:
Drilling and production expenses (25,614) (25,716) (12,284) (85,082)
Depreciation (14,622) (14,589) (3,688) (38,312)
General & administrative expenses (7,493) (3,135) (839) (15,553)
Total operating expenses (47,729) (43,441) (16,811) (138,947)
Operating income / (loss) (4,103) 5,932 25,066 37,162
Interest income 1,179 500 653 3,614
Interest expense (7,684) (6,407) - (17,027)
Amortization of drilling contract
intangibles 9,923 9,923 - 17,167
Amortization of deferred financing fees (397) (397) - (867)
Other financial items 285 (121) 10 197
Total other income/(expense), net 3,306 3,499 663 3,084
Income/(loss) before taxes (797) 9,431 25,729 40,246
Income taxes - (expense)/benefit (4,771) 87 (385) (5,743)
Net income/(loss) (5,568) 9,518 25,344 34,503
Earnings/(loss) per share (US$)
Basic (0.04) 0.06 0.18 0.23
Diluted (0.04) 0.06 0.18 0.23
Weighted average common shares (000's)
Basic 153,100 153,100 144,000 148,313
Diluted 153,100 153,100 144,000 149,186
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(Thousands of US Dollars) March 31, 2008 December 31, 2007
Current assets
Cash and cash equivalents 36,885 21,690
Restricted cash 21,557 42,500
Trade receivables, net 52,940 32,224
Deferred financing fees 1,586 1,586
Prepaid expenses and other current assets 14,075 19,725
Total current assets 127,043 117,725
Non-current assets
Deferred tax asset 1,680 1,282
Property, plant & equipment, net 559,414 561,815
Deferred financing fees, net of current
portion 1,651 2,048
Total non-current Assets 562,745 565,145
Total assets 689,787 682,870
Current liabilities
Trade payables 13,919 11,717
Accrued expenses 8,143 9,525
Income tax payable 5,764 6,439
Deferred income tax payable 14 13
Current portion of debt 114,392 90,000
Deferred revenue 5,387 - Current portion of drilling contract
intangibles 14,042 21,946
Total current liabilities 161,662 139,640
Non-current liabilities
Long-term debt, net of current portion 265,000 287,500
Drilling contract intangibles, net of
current portion 3,868 5,887
Total non-current liabilities 268,868 293,387
Total liabilities 430,530 433,027
Shareholders' equity
Share capital 38,275 38,275
Additional paid-in capital 163,545 163,174
Accumulated other comprehensive loss (6,543) (6,068)
Retained earnings 63,980 54,462
Total shareholders' equity 259,257 249,843
Total liabilities and shareholders' equity 689,787 682,870
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Statement of Cash Flows - (Unaudited)
Three months ended
March 31, March 31,
(Thousands of US Dollars) 2008 2007
Cash flows from operating activities
Net income 9,518 25,342
Adjustments to reconcile net income to net cash
provided by operating activities:
Allowance for doubtful receivables 400 - Stock-based compensation 371 - Depreciation 14,589 3,688
Amortization of drilling contract intangibles (9,923) - Amortization of deferred financing fees 397 - Difference between paid and expensed interest (211) - Operating cash flow before working capital changes 15,141 29,030
Changes in operating assets and working capital:
Trade and other receivables (15,469) (5,464)
Trade and other payables 1,034 1,203
Deferred income 5,387 617
Deferred tax assets (398) - Currency translation adjustment (530) 55
Income taxes (675) 342
Net cash provided by operating activities 4,490 25,783
Cash flows from investing activities
Purchase of property, plant and equipment (12,182) (293)
Net cash used in investing activities (12,182) (293)
Cash flows from financing activities
Issuance of new shares - - Proceeds from Commercial Paper 24,392 - Principal repayment of bank term loan (22,500) - Release of restricted cash (net) 20,943 - Net cash provided by financing activities 22,835 -
Net increase/(decrease) in cash and
cash equivalents 15,143 25,490
Cash and cash equivalents at
beginning of period 21,690 63,003
Effects of exchange rate changes on
cash and cash equivalents 52 25
Cash and cash equivalents at end of period 36,885 88,518
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes 990 3
Interest 6,222 -
NORTHERN OFFSHORE, LTD. and SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Unaudited)
Accumulated Retained
Common Additional other earnings/
(Thousands of shares Share paid-in comprehensive (accumulated
US Dollars) ('000) capital capital loss losses) Total
Balance at
January 1,
2008 153,100 38,275 163,174 (6,068) 54,462 249,843
Net income 9,518 9,518
Issuance of
new shares -
Stock-based
compensation 371 371
Other
comprehensive
income (475) (475)
Total
comprehensive
income - - 371 (475) 9,518 9,414
Balance at
March 31,
2008 153,100 38,275 163,545 (6,543) 63,980 259,257
Balance at
January 1,
2007 144,000 36,000 117,254 (6,459) 19,959 166,754
Net income 34,503 34,503
Issuance of
new shares 9,100 2,275 45,755 48,030
Stock-based
compensation 165 165
Other
comprehensive
income 391 391
Total
comprehensive
income 9,100 2,275 45,920 391 34,503 83,089
Balance at
December 31,
2007 153,100 38,275 163,174 (6,068) 54,462 249,843
First Call Analyst:
FCMN Contact: liz.capritto@northernoffshoreltd.com
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Source: Northern Offshore, Ltd.
CONTACT: Michael Dawson, CFO of Northern Offshore, Ltd.,
+1-713-739-7686, ext. 16
Web site: http://www.northernoffshorelimited.com/
2008-05-28 18:36:36 0372293 PRNEWSWIRE