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Noble Corporation PLC Reports Third Quarter 2018 Results
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DEVELOPMENTS AND RECENT ACCOMPLISHMENTS:
- Jackup fleet utilization improves to 93 percent
- Total fleet operating days advance 12 percent from previous quarter
- Purchase of jackup Noble Johnny Whitstine and concurrent three-year contract award
- Noble Clyde Boudreaux commences operations
- Noble Sam Croft secures contract, with reactivation underway

LONDON, Oct. 31, 2018 /PRNewswire/ -- Noble Corporation plc (NYSE: NE, the Company) today reported a net loss attributable to the Company for the three months ended September 30, 2018 of $82 million, or $0.33 per diluted share, on revenues of $279 million. Results for the third quarter included a discrete tax benefit totaling $25 million, or $0.10 per diluted share. Excluding the impact of the discrete tax benefit, the Company would have reported a net loss attributable to Noble Corporation of $107 million, or $0.43 per diluted share.

Julie J. Robertson, Chairman, President and Chief Executive Officer of Noble Corporation plc, stated, "Third quarter results gave convincing evidence of strengthening in the offshore drilling business and demonstrated how Noble is realizing measurable gains from the cyclical improvement. Across our fleet, operating days advanced 12 percent when compared to the second quarter, due primarily to higher activity among our premium jackups concentrated in the increasingly active North Sea and Middle East regions. Consequently, total revenues improved eight percent over the prior quarter, continuing the favorable trend through 2018, with third quarter revenues exceeding those reported for the first quarter of the year by almost 20 percent."

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. It provides a reconciliation for net income (loss), income tax and diluted earnings per share for the periods third quarter 2018 and 2017.

Contract drilling services revenues totaled $267 million in the third quarter, representing an eight percent increase when compared to revenues of $248 million in the preceding quarter. The improvement largely resulted from a 12 percent increase in total fleet operating days. The revenue improvement was partially offset by an increase in fleet downtime, due primarily to repairs on the jackup Noble Joe Beall. Total fleet utilization in the third quarter improved to 69 percent, up from 54 percent in the preceding quarter, with the higher result due to the improvement in fleet operating days and the retirement and divestiture of four rigs during the second quarter of 2018.

Contract drilling services costs in the third quarter totaled $163 million compared to $151 million in the preceding quarter. The eight percent increase was driven primarily by higher fleet activity, additional costs associated with rig reactivations, rig preparations in advance of contract commencements, and certain repair and maintenance projects. These costs were partially offset by lower shore-based support costs.

Fleet Overview

Third quarter utilization of Noble's floating rig fleet, comprised of eight ultra-deepwater drillships and four deep- and ultra-deepwater semisubmersibles, reached 45 percent compared to 39 percent in the preceding quarter. Total operating days in the third quarter were essentially unchanged from the prior quarter as an increase in idle days for the semisubmersible Noble Paul Romano was offset by a corresponding increase in operating days for the semisubmersible Noble Clyde Boudreaux, following the commencement of operations in August offshore Myanmar. The modest utilization improvement in the third quarter was primarily driven by a reduction in available floating days following the retirement of two semisubmersibles in the second quarter. Average daily revenues improved slightly to $281,800 compared to $268,600 in the preceding quarter. Following the close of the third quarter, the Company secured contracts for the drillship Noble Sam Croft for operations in the U.S. Gulf of Mexico, and for the drillship Noble Globetrotter II for operations in the Black Sea.  In addition to the contract dayrate for the Black Sea program, the Noble Globetrotter II will continue to collect an idle period rate of $185,000 as defined by a previously announced contract amendment.

Utilization in the third quarter of the Company's 12 available jackup rigs improved to 93 percent compared to 70 percent in the preceding quarter. The improvement was driven primarily by an 18 percent increase in operating days with higher activity in the quarter recorded on four rigs. Utilization was further enhanced by the retirement and divestiture of two rigs in the second quarter. Average daily revenues were $122,400 compared to $130,300 in the preceding quarter. Since the close of the third quarter, the Noble Sam Hartley has commenced an estimated nine-month contract in the North Sea. With the return of the Sam Hartley, all 12 of the Company's delivered jackups are currently executing drilling programs, with four units in the North Sea, six units in the Middle East and one unit each in the Pacific Rim and Eastern Canada. In September, the Company expanded its jackup fleet to 13 rigs with the acquisition of the Noble Johnny Whitstine. The newly constructed unit is expected to commence a three-year primary term contract in the first quarter of 2019 following the completion of customer upgrades, final rig commissioning and relocation of the unit to the Middle East.

Backlog and Liquidity Position

At September 30, 2018, the Company's contract backlog totaled $2.5 billion, including $1.5 billion attributable to the floating fleet and $1.0 billion to the jackup fleet. Approximately 74 percent of the available rig operating days in the fourth quarter of 2018 were committed to contracts, including 55 percent of the floating fleet and 93 percent of the jackup fleet. For 2019, approximately 45 percent of the available rig days were committed to contracts, including 37 percent and 53 percent of the floating and jackup fleets, respectively.

The Company's cash and equivalents balance at September 30, 2018 totaled $326 million compared to $411 million at June 30, 2018. The decline was due, in part, to cash utilized in conjunction with the purchase of the jackup Noble Johnny Whitstine. Availability under the Company's revolving credit facilities of $1.8 billion was unchanged from the previous quarter, resulting in total liquidity at September 30, 2018 of $2.1 billion.

Capital expenditures for the third quarter totaled $136 million and included $94 million related to the purchase of the Noble Johnny Whitstine, of which $60 million of the purchase price was seller-financed with 95 percent of the principal repayment due in four years. Excluding the impact of the rig purchase, capital expenditures in the third quarter would have been $42 million, with approximately $29 million directed to fleet maintenance programs and $13 million to projects and other expenditures. Capital expenditures through September 30, 2018 totaled $220 million, or $126 million excluding the rig purchase. Accounting for the rig purchase and other expenditures, principally rig reactivations, the Company has updated its expectation for full-year 2018 capital expenditures to $280 million.

Outlook

In closing, Ms. Robertson noted, "It is apparent that a meaningful increase in drilling activity has begun, as customers increasingly recognize the compelling economics inherent in their offshore project portfolios. As more of these projects transition from an evaluation phase to full execution, and additional access is granted to promising offshore basins, we believe higher fleet utilization industry-wide is likely, especially for high-specification rigs. Recent contract awards across the Noble fleet, including those for the drillships Noble Globetrotter II, Noble Tom Madden and Noble Sam Croft, and the recent purchase and concurrent three-year award for the jackup Noble Johnny Whitstine, give evidence of a more fundamentally sound environment while serving to strengthen Noble's competitive position as we enter 2019."

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 25 offshore drilling units, consisting of 12 drillships and semisubmersibles and 13 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 10 Brook Street, London, W1S 1BG 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, rig reactivations, shipyard risks and timing of shipyard deliveries, delays in mobilization of rigs, 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 has scheduled a conference call and webcast related to its third quarter 2018 results on Thursday, November 1, 2018, at 8:00 a.m. U.S. Central Daylight Time. Interested parties are invited to listen to the call by dialing 1-833-245-9653, or internationally 1-647-689-4225, using access code: 7883359, 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 Thursday, November 1, 2018, beginning at 11:00 a.m. U.S. Central Daylight Time, through Saturday, December 1, 2018, ending at 11:00 p.m. U.S. Central Standard Time. The phone number for the conference call replay is 1-800-585-8367 or, for calls from outside of the U.S., 1-416-621-4642, using access code: 7883359.  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 September 30,


Nine Months Ended September 30,



2018


2017


2018


2017

Operating revenues









Contract drilling services


$

267,238



$

259,740



$

744,033



$

885,931


Reimbursables and other


12,170



6,472



28,901



21,399




279,408



266,212



772,934



907,330


Operating costs and expenses









Contract drilling services


162,985



166,044



451,271



489,594


Reimbursables


9,676



3,834



22,323



13,374


Depreciation and amortization


113,868



137,607



372,304



409,919


General and administrative


14,722



15,331



58,522



49,869


Loss on impairment






792,843






301,251



322,816



1,697,263



962,756


Operating loss


(21,843)



(56,604)



(924,329)



(55,426)


Other income (expense)









Interest expense, net of amounts capitalized


(73,725)



(72,887)



(223,870)



(219,543)


Gain (loss) on extinguishment of debt, net


109





(8,659)




Interest income and other, net


2,610



1,405



6,814



6,096


Loss from continuing operations before income taxes


(92,849)



(128,086)



(1,150,044)



(268,873)


Income tax benefit (provision)


14,491



28,605



50,334



(210,589)


Net loss from continuing operations


(78,358)



(99,481)



(1,099,710)



(479,462)


Net loss from discontinued operations, net of tax








(1,486)


Net loss


(78,358)



(99,481)



(1,099,710)



(480,948)


Net (income) loss attributable to noncontrolling interests


(3,233)



2,689



247,722



(10,888)


Net loss attributable to Noble Corporation plc


$

(81,591)



$

(96,792)



$

(851,988)



$

(491,836)


Net loss attributable to Noble Corporation plc









Loss from continuing operations


$

(81,591)



$

(96,792)



$

(851,988)



$

(490,350)


Net loss from discontinued operations, net of tax








(1,486)


Net loss attributable to Noble Corporation plc


$

(81,591)



$

(96,792)



$

(851,988)



$

(491,836)


Per share data









Basic:









Loss from continuing operations


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.00)


Loss from discontinued operations








(0.01)


Net loss attributable to Noble Corporation plc


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.01)


Diluted:









Loss from continuing operations


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.00)


Loss from discontinued operations








(0.01)


Net loss attributable to Noble Corporation plc


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.01)


 

NOBLE CORPORATION PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)




September 30,
 2018


December 31,
 2017

ASSETS

Current assets





Cash and cash equivalents


$

326,320



$

662,829


Accounts receivable, net


200,215



204,696


Prepaid expenses and other current assets


134,240



171,450


Total current assets


660,775



1,038,975


Property and equipment, at cost


11,059,775



12,034,331


Accumulated depreciation


(2,516,353)



(2,545,091)


Property and equipment, net


8,543,422



9,489,240


Other assets


196,894



266,444


Total assets


$

9,401,091



$

10,794,659


LIABILITIES AND EQUITY

Current liabilities





Current maturities of long-term debt


$



$

249,843


Accounts payable


103,285



84,032


Accrued payroll and related costs


43,313



54,904


Other current liabilities


169,221



204,245


Total current liabilities


315,819



593,024


Long-term debt


3,902,976



3,795,867


Other liabilities


490,629



455,140


Total liabilities


4,709,424



4,844,031







Commitments and contingencies










Equity





Total shareholders' equity


4,287,966



5,276,161


Noncontrolling interests


403,701



674,467


Total equity


4,691,667



5,950,628


Total liabilities and equity


$

9,401,091



$

10,794,659


 

NOBLE CORPORATION PLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)




Nine Months Ended September 30,



2018


2017

Cash flows from operating activities





Net loss


$

(1,099,710)



$

(480,948)


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





Depreciation and amortization


372,304



409,919


Loss on impairment


792,843




Loss on extinguishment of debt, net


8,659




Deferred income taxes


(10,965)



343,962


Other long-term asset write-off




28,689


Changes in components of working capital:





Net changes in other operating assets and liabilities


(19,815)



(2,542)


Net cash provided by operating activities


43,316



299,080


Cash flows from investing activities





Capital expenditures


(149,329)



(86,700)


Proceeds from disposal of assets, net


4,135



1,306


Net cash used in investing activities


(145,194)



(85,394)


Cash flows from financing activities





Issuance of senior notes


750,000




Repayments of debt


(952,477)



(300,000)


Debt issuance costs


(15,327)



(42)


Dividends paid to noncontrolling interests


(12,694)



(26,293)


Taxes withheld on employee stock transactions


(3,458)



(4,310)


Net cash used in financing activities


(233,956)



(330,645)


Net decrease in cash, cash equivalents and restricted cash


(335,834)



(116,959)


Cash, cash equivalents and restricted cash, beginning of period


662,829



725,722


Cash, cash equivalents and restricted cash, end of period


$

326,995



$

608,763


 

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,



2018


2017


2018



Contract
Drilling
Services


Other


Total


Contract
Drilling
Services


Other


Total


Contract
Drilling
Services


Other


Total

Operating revenues



















Contract drilling services


$

267,238



$



$

267,238



$

259,740



$



$

259,740



$

247,689



$



$

247,689


Reimbursables and other


12,170





12,170



6,472





6,472



10,680





10,680




$

279,408



$



$

279,408



$

266,212



$



$

266,212



$

258,369



$



$

258,369


Operating costs and expenses



















Contract drilling services


$

162,985



$



$

162,985



$

166,044



$



$

166,044



$

151,437



$



$

151,437


Reimbursables


9,676





9,676



3,834





3,834



8,297





8,297


Depreciation and amortization


109,492



4,376



113,868



131,819



5,788



137,607



124,223



5,458



129,681


General and administrative


14,722





14,722



15,331





15,331



21,717





21,717


Loss on impairment














792,843





792,843




$

296,875



$

4,376



$

301,251



$

317,028



$

5,788



$

322,816



$

1,098,517



$

5,458



$

1,103,975





















Operating loss


$

(17,467)



$

(4,376)



$

(21,843)



$

(50,816)



$

(5,788)



$

(56,604)



$

(840,148)



$

(5,458)



$

(845,606)









Operating statistics







Jackups:







Average Rig Utilization


93

%


81

%


70

%

Operating Days


1,028



1,043



872


Average Dayrate


$

122,350



$

127,163



$

130,332


Semisubmersibles:







Average Rig Utilization


11

%


17

%


8

%

Operating Days


42



92



44


Average Dayrate


$

99,470



$

104,028



$

126,278


Drillships:







Average Rig Utilization


63

%


56

%


63

%

Operating Days


460



410



455


Average Dayrate


$

298,443



$

286,819



$

282,412


Total:







Average Rig Utilization


69

%


60

%


54

%

Operating Days


1,530



1,545



1,371


Average Dayrate


$

174,665



$

168,127



$

180,689



 

NOBLE CORPORATION PLC AND SUBSIDIARIES

CALCULATION OF BASIC AND DILUTED NET INCOME/(LOSS) PER SHARE

(In thousands, except per share amounts)

(Unaudited)


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




Three Months Ended September 30,


Nine Months Ended September 30,



2018


2017


2018


2017

Numerator:









Basic









Net loss from continuing operations


$

(81,591)



$

(96,792)



$

(851,988)



$

(490,350)


Net loss from discontinued operations, net of tax








(1,486)


Net loss attributable to Noble Corporation plc


$

(81,591)



$

(96,792)



$

(851,988)



$

(491,836)


Diluted









Net loss from continuing operations


$

(81,591)



$

(96,792)



$

(851,988)



$

(490,350)


Net loss from discontinued operations, net of tax








(1,486)


Net loss attributable to Noble Corporation plc


$

(81,591)



$

(96,792)



$

(851,988)



$

(491,836)


Denominator:









Weighted average shares outstanding - basic


246,780



244,940



246,553



244,666


Weighted average shares outstanding - diluted


246,780



244,940



246,553



244,666


Loss per share









Basic:









Loss from continuing operations


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.00)


Loss from discontinued operations








(0.01)


Net loss attributable to Noble Corporation plc


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.01)


Diluted:









Loss from continuing operations


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.00)


Loss from discontinued operations








(0.01)


Net loss attributable to Noble Corporation plc


$

(0.33)



$

(0.40)



$

(3.46)



$

(2.01)



For the three and nine months ended September 30, 2018 and 2017, we experienced net losses from continuing operations, as such, unvested share-based payment awards were excluded from the loss per share calculation, as the awards were anti-dilutive.


NOBLE CORPORATION PLC AND SUBSIDIARIES
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 October 31, 2018, and discussed in the related conference call on November 1, 2018, are appropriate measures of the continuing and normal operations of the Company:

(i)

In the third quarter of 2018, a discrete tax benefit; and

(ii)

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 RECONCILIATION

(In thousands, except per share amounts)

(Unaudited)


Reconciliation of Income Tax Provisions


Three Months Ended September 30,




2018


2017


Income tax benefit


$

14,491



$

28,605









Adjustments






Discrete tax benefit


(24,924)





Noble Danny Adkins and Noble Jim Day rig damages




(4,845)



Total Adjustments


(24,924)



(4,845)



Adjusted income tax benefit (provision)


$

(10,433)



$

23,760









Reconciliation of net loss attributable to Noble Corporation plc


Three Months Ended September 30,




2018


2017


Net loss attributable to Noble Corporation plc


$

(81,591)



$

(96,792)









Adjustments






Discrete tax benefit


(24,924)





Noble Danny Adkins and Noble Jim Day rig damages




9,425



Total Adjustments


(24,924)



9,425



Adjusted net loss attributable to Noble Corporation plc


$

(106,515)



$

(87,367)









Reconciliation of diluted EPS attributable to Noble Corporation plc


Three Months Ended September 30,




2018


2017


Unadjusted diluted EPS attributable to Noble Corporation plc


$

(0.33)



$

(0.40)









Adjustments






Discrete tax benefit


(0.10)





Noble Danny Adkins and Noble Jim Day rig damages




0.04



Total Adjustments


(0.10)



0.04



Adjusted diluted EPS


$

(0.43)



$

(0.36)



 

 

Cision View original content:http://www.prnewswire.com/news-releases/noble-corporation-plc-reports-third-quarter-2018-results-300741529.html

SOURCE Noble Corporation

Jeffrey L. Chastain, Vice President - Investor Relations and Corporate Communications, Noble Drilling Services Inc., 281-276-6383, or at jlchastain@noblecorp.com