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Diamond Offshore Announces First Quarter 2015 Results
- Reports loss of $1.86 per share
- Records impairment charge of $319 million after tax, or $2.33 per share
- Records restructuring charge of $4 million after tax, or $0.03 per share
- Declares Regular Cash Dividend of $0.125 per share
- Announces plans to scrap three mid-water semisubmersibles

HOUSTON, May 4, 2015 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported a net loss of $256 million, or $1.86 per share, in the first quarter of 2015, compared to net income of $146 million, or $1.05 per share, in the first quarter of 2014.  Revenues in the first quarter of 2015 were $620 million, compared to revenues of $709 million in the first quarter of 2014.

Results for the quarter included a non-cash charge of $319 million after tax, or $2.33 per share, associated with the impairment of eight drilling units, three of which are to be retired and scrapped.  The units to be retired are the mid-water semisubmersibles Ocean Saratoga, Ocean Worker and Ocean Yorktown, which are all cold stacked in the U.S. Gulf of Mexico.  Other rigs included in the impairment group are the mid-water semisubmersibles Ocean Ambassador, Ocean General, Ocean Lexington, Ocean Nomad and the drillship Ocean Clipper

The Company also recognized a charge during the quarter of $4 million after tax, or $0.03 per share, related to restructuring and employee separation-related costs.

"We have continued to implement cost savings measures while maintaining our focus on safe operations and delivering performance for our clients," said Marc Edwards, President and Chief Executive Officer.  "Our first-quarter safety statistics were the best that we have recorded."

"During the second quarter, our next two newbuild drillships will begin working in the Gulf of Mexico, and the yard will complete our fourth drillship, which will also be headed to the U.S., where all four of drillships will work on term contracts extending into 2019 or beyond," added Mr. Edwards.

In addition, the Company announced that it has declared a regular quarterly dividend of $0.125 per share, payable on June 1, 2015 to shareholders of record as of May 15, 2015.

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 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 22913137.  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 with a total fleet of 35 offshore drilling rigs, including two rigs under construction.  Diamond Offshore's fleet consists of 24 semisubmersibles, one of which is under construction, five dynamically positioned drillships, one of which is under construction, and six jack-ups. Additional information about the Company 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.  Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness, effective dates and estimated duration; plans regarding retirement and scrapping of drilling rigs; future impairments; future dividends; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions, commodity prices and strategic opportunities; revenue expected to result from backlog; future credit ratings; future dayrates, future status, start and end dates and future contracts and availability; future contract opportunities and termination rights; contract noncompliance by customers and other third parties; utilization, surveys, downtime and other aspects of the Company's drilling rigs; statements concerning customer discussions and outcomes thereof and the impact of these and related events on the Company's operations and revenues; rigs being upgraded or to be upgraded and rigs under construction; and other statements that are not of historical fact.  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, declaration of dividends, 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

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)






Three Months Ended



March 31,




2015


2014








Revenues:






           Contract drilling

$

599,577

$

685,308


           Revenues related to reimbursable expenses


20,479


24,116


                     Total revenues


620,056


709,424








Operating expenses:






           Contract drilling, excluding depreciation


350,658


369,790


           Reimbursable expenses


20,092


23,666


           Depreciation


137,299


107,011


           General and administrative


17,452


22,827


           Impairment of assets


358,528


--


           Restructuring and separation costs


6,168


--


           Gain on disposition of assets


(611)


(147)


                     Total operating expenses


889,586


523,147








Operating (loss) income


(269,530)


186,277








Other income (expense):






           Interest income


583


408


           Interest expense


(23,982)


(18,155)


           Foreign currency transaction gain (loss)


5,590


(1,178)


           Other, net 


221


327








(Loss) income before income tax (benefit) expense


(287,118)


167,679








Income tax benefit (expense)


31,409


(21,869)








Net (loss) income

$

(255,709)

$

145,810








(Loss) income per share

$

(1.86)

$

1.05








Weighted average shares outstanding:






           Shares of common stock


137,151


138,469


           Dilutive potential shares of common stock


--


4


                     Total weighted average shares outstanding


137,151


138,473

    

    

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

(In thousands)




Three Months Ended




Mar 31,


Dec 31,


Mar 31,




2015


2014


2014










REVENUES








   Floaters:








    Ultra-Deepwater   

$

251,396

$

285,991

$

205,794


    Deepwater   


138,770


115,777


146,559


    Mid-water 


176,357


231,933


285,979


       Total Floaters   


566,523


633,701


638,332


   Jack-ups 


33,054


40,675


46,976


Total Contract Drilling Revenue   

$

599,577

$

674,376

$

685,308










Revenues Related to Reimbursable
Expenses
  

 

$

 

20,479

 

$

 

945

 

$

 

24,116










CONTRACT DRILLING EXPENSE








   Floaters:








    Ultra-Deepwater  

$

154,539

$

133,103

$

123,530


     Deepwater  


63,675


66,093


71,949


    Mid-water 


99,320


119,763


134,046


       Total Floaters  


317,534


318,959


329,525


  Jack-ups 


21,570


25,268


28,029


  Other 


11,554


14,428


12,236


Total Contract Drilling Expense  

$

350,658

$

358,655

$

369,790










Reimbursable Expenses   

$

20,092

$

698

$

23,666










OPERATING INCOME








   Floaters:








    Ultra-Deepwater  

$

96,857

$

152,888

$

82,264


    Deepwater  


75,095


49,684


74,610


    Mid-water 


77,037


112,170


151,933


      Total Floaters  


248,989


314,742


308,807


  Jack-ups 


11,484


15,407


18,947


  Other 


(11,554)


(14,428)


(12,236)


  Reimbursable expenses, net  


387


247


450


  Depreciation  


(137,299)


(131,712)


(107,011)


  General and administrative expense  


(17,452)


(19,923)


(22,827)


  Bad debt recovery  


--


--


--


  Gain (loss) on disposition of assets


611


(2,230)


147


  Impairment of assets


(358,528)


--


--


  Restructuring and separation costs 


(6,168)


--


--


          Total Operating (Loss) Income   

$

(269,530)

$

162,103

$

186,277


   

  

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)












March 31,

December 31,





2015


2014






ASSETS










Current assets:






Cash and cash equivalents

$

184,775

$

233,623








Marketable securities


14,016


16,033








Accounts receivable, net of allowance for bad debts


445,685


463,862








Prepaid expenses and other current assets


199,321


185,541





843,797


899,059






Drilling and other property and equipment, net of





     accumulated depreciation


6,574,142


6,945,953







Other assets


117,890


176,277



Total assets

$

7,535,829

$

8,021,289








LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

249,979

$

249,962






Other current liabilities


521,079


606,684






Long-term debt


1,994,587


1,994,526






Deferred tax liability


413,009


530,394






Other liabilities


177,329


188,160








Stockholders' equity


4,179,846


4,451,563



Total liabilities and stockholders' equity

$

7,535,829

$

8,021,289






    

     

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)



First Quarter

2015

Fourth Quarter

2014

First Quarter

2014


Average

Dayrate
(1)

Utilization
(2)

Operational
Efficiency

(3)

Average

Dayrate
(1)

Utilization
(2)

Operational
Efficiency

(3)

Revised
Average

Dayrate
(4)

Utilization
(2)

Operational
Efficiency

(3)































Ultra-Deepwater
Floaters

$497

51%

81.5%

$493

66%

90.2%

$401

66%

95.3%











Deepwater
Floaters

$486

45%

95.1%

$431

48%

97.3%

$427

64%

96.0%











Mid-Water floaters

$266

49%

94.1%

$270

55%

96.8%

$278

64%

94.4%











Jack-ups

$92

66%

99.4%

$96

77%

99.5%

$94

79%

99.9%











Fleet Total



91.2%



95.5%



95.9%




(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.  As of May 4, 2015, one deepwater and four mid-water semisubmersible rigs and three jack-up rigs were 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.


(4)   Average dayrate reported in prior periods has been revised to conform to current presentation.


Contact:
Darren Daugherty
Director, Investor Relations
(281) 492-5370

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SOURCE Diamond Offshore Drilling, Inc.