HOUSTON, Nov. 2, 2015 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $136 million, or $0.99 per share, in the third quarter of 2015, compared to $53 million, or $0.38 per share, in the third quarter of 2014.  Revenues in the third quarter of 2015 were $610 million, compared to revenues of $738 million in the third quarter of 2014.

"I am pleased with our solid third quarter results, which demonstrate Diamond Offshore's ability to execute on managing our costs and controlling downtime," said Marc Edwards, President and Chief Executive Officer.  "During the quarter, our three newbuild drillships delivered operational efficiency of 99.3 percent, which directly benefits our topline and improves project economics for our clients."

Diamond Offshore also confirmed the Ocean Guardian was awarded a contract for a one-year term in the UK North Sea beginning in March of 2016 at a rate of $220,000 per day.

The Company announced that it reached agreement with Petrobras for contracts on the semisubmersible rig Ocean Alliance and the drillship Ocean Clipper to be ended as of October 30, 2015, ahead of their original end dates, in return for an additional 875 days of contract term on the semisubmersible rig Ocean Courage. The additional term will be at a rate of $380,000 per day, representing revenue backlog of $333 million, and will extend the contract into mid-2020.  After export from Brazil, the Ocean Alliance will be cold-stacked and the Ocean Clipper will be retired and scrapped.  The terminated portions of the contracts represent a loss to revenue backlog of approximately $91 million.

Diamond Offshore also announced that it has declared a regular quarterly dividend of $0.125 per share, payable on December 1, 2015 to shareholders of record as of November 13, 2015.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 7:30 a.m. CST 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 60130700.  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 33 offshore drilling rigs, including one rig under construction.  Diamond Offshore's fleet consists of 23 semisubmersibles, one of which is under construction, four dynamically positioned drillships, 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

Contract revenue as stated above assumes 100% rig utilization.  Rig utilization rates vary depending on a variety of circumstances, many of which are beyond the Company's control.  Rig utilization rates generally approach 92-98% during contracted periods; however, utilization rates can be adversely impacted by additional downtime due to various operating factors, including, but not limited to, weather conditions and unscheduled repairs and maintenance.  Additional information on the Company and access to the Company's SEC filings is available at www.diamondoffshore.com.

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


Nine Months Ended



September 30,


September 30,



2015


2014


2015


2014










Revenues:









         Contract drilling

$

599,036

$

727,888

$

1,816,055

$

2,062,750

         Revenues related to reimbursable expenses


10,706


9,794


47,775


76,600

                Total revenues


609,742


737,682


1,863,830


2,139,350










Operating expenses:









         Contract drilling, excluding depreciation


277,944


399,802


971,471


1,164,968

         Reimbursable expenses


10,476


9,437


46,904


75,393

         Depreciation


118,086


108,854


378,714


324,771

         General and administrative


16,888


18,604


50,888


61,909

         Impairment of assets


2,546


109,462


361,074


109,462

         Restructuring and separation costs


1,574


--


8,735


--

         Loss (gain) on disposition of assets


794


1,107


19


(7,612)

                Total operating expenses


428,308


647,266


1,817,805


1,728,891










Operating income


181,434


90,416


46,025


410,459










Other income (expense):









         Interest income


629


86


1,796


644

         Interest expense


(21,350)


(9,378)


(70,800)


(46,056)

Foreign currency transaction gain (loss)


(1,163)


425


954


(3,724)

         Other, net


217


90


702


598










Income (loss) before income tax expense


159,767


81,639


(21,323)


361,921










Income tax expense


(23,345)


(28,994)


(7,578)


(73,753)










Net Income (loss)

$

136,422

$

52,645

$

(28,901)

$

288,168










Income (loss) per share

$

0.99

$

0.38

$

(0.21)

$

2.09










Weighted average shares outstanding:









 Shares of common stock


137,159


137,146


137,156


137,582

 Dilutive potential shares of common stock


44


1


--


3

       Total weighted average shares outstanding


137,203


137,147


137,156


137,585

 

 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited) 

(In thousands)





Three Months Ended



September 30,


June 30,


September 30,



2015


2015


2014








REVENUES







 Floaters:







   Ultra-Deepwater

$

376,195

$

315,670

$

313,124

   Deepwater


136,668


181,104


111,372

   Mid-water


69,500


96,926


258,028

      Total Floaters


582,363


593,700


682,524

  Jack-ups


16,673


23,742


45,364

Total Contract Drilling Revenue

$

599,036

$

617,442

$

727,888








Revenues Related to Reimbursable Expenses

 

$

 

10,706

 

$

 

16,590

 

$

 

9,794








CONTRACT DRILLING EXPENSE







 Floaters:







   Ultra-Deepwater

$

156,107

$

161,485

$

157,655

   Deepwater


67,630


86,464


72,367

   Mid-water


35,784


66,735


132,340

      Total Floaters


259,521


314,684


362,362

  Jack-ups


12,507


20,873


28,056

  Other


5,916


7,312


9,384

Total Contract Drilling Expense

$

277,944

$

342,869

$

399,802








Reimbursable Expenses

$

10,476

$

16,336

$

9,437








OPERATING (LOSS) INCOME







 Floaters:







   Ultra-Deepwater

$

220,088

$

154,185

$

155,469

   Deepwater


69,038


94,640


39,005

   Mid-water


33,716


30,191


125,688

      Total Floaters


322,842


279,016


320,162

  Jack-ups


4,166


2,869


17,308

  Other


(5,916)


(7,312)


(9,384)

  Reimbursable expenses, net


230


254


357

  Depreciation


(118,086)


(123,329)


(108,854)

  General and administrative expense


(16,888)


(16,548)


(18,604)

  Gain (loss) on disposition of assets


(794)


164


(1,107)

  Impairment of assets


(2,546)


--


(109,462)

  Restructuring and separation costs


(1,574)


(993)


--

          Total Operating Income

$

181,434

$

134,121

$

90,416

 


DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)













September 30,

December 31,





2015


2014






ASSETS










Current assets:






Cash and cash equivalents

$

141,131

$

233,623








Marketable securities


13,621


16,033








Accounts receivable, net of allowance for bad debts


515,754


463,862








Prepaid expenses and other current assets


163,871


185,541








Assets held for sale


6,700


--











841,077


899,059






Drilling and other property and equipment, net of





     accumulated depreciation


6,888,248


6,945,953







Other assets


121,171


176,277



Total assets

$

7,850,496

$

8,021,289








LIABILITIES AND STOCKHOLDERS' EQUITY










Current portion of long-term debt

$

--

$

249,962






Short-term borrowings


492,996


--






Other current liabilities


397,421


606,684






Long-term debt


1,994,710


1,994,526






Deferred tax liability


417,621


530,394






Other liabilities


171,595


188,160








Stockholders' equity


4,376,153


4,451,563










Total liabilities and stockholders' equity

$

7,850,496

$

8,021,289


















 

 

 

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)




Third Quarter

2015

Second Quarter

2015

Third 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

$479

71%

96.8%

$483

63%

90.9%

$491

77%

92.2%











Deepwater Floaters

$361

59%

90.3%

$451

63%

99.3%

$356

57%

95.5%











Mid-Water Floaters

$289

31%

97.5%

$278

32%

99.7%

$265

59%

94.1%











Jack-ups

$97

31%

99.8%

$83

53%

98.6%

$99

83%

99.3%











Fleet Total



95.5%



95.9%



94.7%

 

(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 September 30, 2015, our cold-stacked rigs included one ultra-deepwater semisubmersible, one deepwater semisubmersible, four mid-water semisubmersibles and five jack-up rigs.



(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 period 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.

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