- Pacific Santa Ana extended by Total for one well in
Mauritania
- Delivered revenue efficiency of 97.4% during the second
quarter
Pacific Drilling S.A. (NYSE: PACD) (“Pacific Drilling” or the
“Company”) today reported results for the second quarter of 2019.
Net loss for second-quarter 2019 was $73.6 million or $0.98 per
diluted share, compared to net loss of $84.0 million or $1.12 per
diluted share in first-quarter 2019. EBITDA(a) for second-quarter
2019 was $14.0 million, compared to $1.9 million in first-quarter
2019.
“During the second quarter, we maintained our focus on putting
rigs to work while delivering improved revenue and EBITDA compared
to the first quarter. We added backlog for our fleet as an option
was exercised for Pacific Santa Ana. The ramp-up of Pacific
Khamsin, in preparation for its contract with Equinor, remains on
schedule for start of operations in November,” said CEO Bernie
Wolford.
“The market for deepwater drilling continues to show signs of
gradual strengthening as both the pace and number of new fixtures
improved during the second quarter. We also saw customers moving
beyond the spot market to consider more substantial drilling
campaigns, including tenders for programs with one or more year
terms. In particular, the Gulf of Mexico is showing signs of
improving demand, especially in Mexico, as operators are
approaching their lease commitment-well deadlines.”
Second-Quarter 2019 Operational and
Financial Commentary
Second-quarter 2019 contract drilling revenue was $76.4 million,
which included $3.8 million in reimbursable revenue. This compared
to first-quarter 2019 contract drilling revenue of $65.9 million,
which included $3.4 million in reimbursable revenue. The increase
in revenue resulted primarily from the Pacific Santa Ana commencing
operations with Total in Senegal.
Operating expenses were $52.3 million for both second-quarter
2019 and first-quarter 2019.
General and administrative expenses for the second-quarter of
2019 were $10.0 million, as compared to $11.2 million for the
first-quarter of 2019. The decrease in general and administrative
expenses was primarily due to the impact of cost control and
process optimization initiatives implemented during the first
quarter of 2019.
Adjusted EBITDA(a) for second-quarter 2019 was $15.6 million,
compared to $4.3 million in first-quarter 2019.
Capital expenditures for the second-quarter of 2019 were $3.8
million compared to $17.6 million in the first-quarter of 2019.
Footnotes
(a)
EBITDA and Adjusted EBITDA are non-GAAP
financial measures. For a definition of EBITDA and Adjusted EBITDA
and a reconciliation to net loss, please refer to the schedule
included in this release. Management uses this operational metric
to track company results and believes that this measure provides
additional information that highlights the impact of our operating
efficiency as well as the operating and support costs incurred in
achieving the revenue performance.
2019 Guidance
A schedule of Pacific Drilling’s updated 2019 guidance as of
August 12, 2019 is available in the “Quarterly and Annual Results”
subsection of the “Investor Relations” section of our website,
www.pacificdrilling.com.
Conference Call
Pacific Drilling will conduct a conference call at 10 a.m.
Central time on Tuesday, August 13, 2019 to discuss second-quarter
2019 results. To access the conference call, participants should
contact the Conference Call Operator at +1 800-353-6461 within
North America or +1 334-323-0501 outside of North America
approximately 10 minutes prior to the scheduled start time and
provide confirmation code #8853719. On the following day a replay
of the call will be available on the company’s website or by
dialing +1 888-203-1112 within North America or +1 719-457-0820
outside of North America and providing confirmation code
#8853719.
About Pacific Drilling
With its best-in-class drillships and highly experienced team,
Pacific Drilling is committed to becoming the industry’s preferred
high-specification, deepwater drilling contractor. Pacific
Drilling’s fleet of seven drillships represents one of the youngest
and most technologically advanced fleets in the world. Pacific
Drilling has principal offices in Luxembourg and Houston. For more
information about Pacific Drilling, including our current Fleet
Status, please visit our website at www.pacificdrilling.com.
Forward-Looking
Statements
Certain statements and information contained in this press
release constitute “forward-looking statements” within the meaning
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, and are generally identifiable by their use of
words such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “forecast,” “intend,” “our ability to,” “may,” “plan,”
“potential,” “predict,” “project,” “projected,” “should,” “will,”
“would”, or other similar words which are not generally historical
in nature. The forward-looking statements speak only as of the date
hereof, and we undertake no obligation to publicly update or revise
any forward-looking statements after the date they are made,
whether as a result of new information, future events or
otherwise.
Our forward-looking statements express our current expectations
or forecasts of possible future results or events, including future
financial and operational performance and cash balances; revenue
efficiency levels; market outlook; forecasts of trends; future
client contract opportunities; future contract dayrates; our
business strategies and plans or objectives of management;
estimated duration of client contracts; backlog; expected capital
expenditures; projected costs and savings; and the potential impact
of our completed Chapter 11 proceedings on our future operations
and ability to finance our business.
Although we believe that the assumptions and expectations
reflected in our forward-looking statements are reasonable and made
in good faith, these statements are not guarantees, and actual
future results may differ materially due to a variety of factors.
These statements are subject to a number of risks and uncertainties
and are based on a number of judgments and assumptions as of the
date such statements are made about future events, many of which
are beyond our control. Actual events and results may differ
materially from those anticipated, estimated, projected or implied
by us in such statements due to a variety of factors, including if
one or more of these risks or uncertainties materialize, or if our
underlying assumptions prove incorrect.
Important factors that could cause actual results to differ
materially from our expectations include: the global oil and gas
market and its impact on demand for our services; the offshore
drilling market, including reduced capital expenditures by our
clients; changes in worldwide oil and gas supply and demand; rig
availability and supply and demand for high-specification
drillships and other drilling rigs competing with our fleet; our
ability to enter into and negotiate favorable terms for new
drilling contracts or extensions; our ability to successfully
negotiate and consummate definitive contracts and satisfy other
customary conditions with respect to letters of intent and letters
of award that we receive for our drillships; possible cancellation,
renegotiation, termination or suspension of drilling contracts as a
result of mechanical difficulties, performance, market changes or
other reasons; costs related to stacking of rigs; downtime and
other risks associated with offshore rig operations, including
unscheduled repairs or maintenance, relocations, severe weather or
hurricanes; our small fleet and reliance on a limited number of
clients; our ability to execute our business plans; the effects of
our completed Chapter 11 proceedings on our future operations; and
the other risk factors described in our 2018 Annual Report on Form
20-F filed with the Securities and Exchange Commission on March 12,
2019 and our Reports on Form 6-K. These documents are available
through our website at www.pacificdrilling.com or through the SEC’s
website at www.sec.gov.
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Condensed Consolidated Statements
of Operations
(in thousands, except per share
information) (unaudited)
Successor
Predecessor
Successor
Predecessor
Three Months
Three Months
Three Months
Six Months
Six Months
Ended June 30,
Ended March 31,
Ended June 30,
Ended June 30,
Ended June 30,
2019
2019
2018
2019
2018
Revenues
Contract drilling
$
76,415
$
65,916
$
66,564
$
142,331
$
148,633
Costs and expenses
Operating expenses
(52,254)
(52,296)
(55,968)
(104,550)
(120,322)
General and administrative expenses
(10,010)
(11,246)
(12,881)
(21,256)
(30,085)
Depreciation and amortization expense
(59,330)
(58,899)
(70,070)
(118,229)
(139,990)
(121,594)
(122,441)
(138,919)
(244,035)
(290,397)
Operating loss
(45,179)
(56,525)
(72,355)
(101,704)
(141,764)
Other income (expense)
Interest expense
(24,406)
(24,039)
(17,211)
(48,445)
(32,140)
Reorganization items
(878)
(1,003)
(13,477)
(1,881)
(25,509)
Interest income
1,665
1,972
912
3,637
1,700
Equity earnings in unconsolidated
subsidiaries
(263)
(1,052)
—
(1,315)
—
Expenses to unconsolidated subsidiaries,
net
(437)
(272)
—
(709)
—
Other expense
(220)
(91)
(1,135)
(311)
(1,330)
Loss before income taxes
(69,718)
(81,010)
(103,266)
(150,728)
(199,043)
Income tax expense
(3,868)
(2,969)
(478)
(6,837)
(752)
Net loss
$
(73,586)
$
(83,979)
$
(103,744)
$
(157,565)
$
(199,795)
Loss per common share, basic
$
(0.98)
$
(1.12)
$
(4.86)
$
(2.10)
$
(9.36)
Weighted average shares outstanding,
basic
75,001
75,031
21,366
75,016
21,352
Loss per common share, diluted
$
(0.98)
$
(1.12)
$
(4.86)
$
(2.10)
$
(9.36)
Weighted average shares outstanding,
diluted
75,001
75,031
21,366
75,016
21,352
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(in thousands) (unaudited)
June 30,
March 31,
December 31,
2019
2019
2018
Assets:
Cash and cash equivalents
$
305,488
$
337,173
$
367,577
Restricted cash
8,500
16,965
21,498
Accounts receivable, net
65,403
46,895
40,549
Other receivable
28,000
28,000
28,000
Materials and supplies
42,441
40,598
40,429
Prepaid expenses and other current
assets
14,916
16,390
9,149
Total current assets
464,748
486,021
507,202
Property and equipment, net
1,878,848
1,901,540
1,915,172
Receivable from unconsolidated
subsidiaries
204,790
204,790
204,790
Intangible asset
20,640
53,025
85,053
Investment in unconsolidated
subsidiaries
11,234
11,264
11,876
Other assets
30,014
29,630
24,120
Total assets
$
2,610,274
$
2,686,270
$
2,748,213
Liabilities and shareholders’
equity:
Accounts payable
$
17,835
$
13,072
$
14,941
Accrued expenses
18,327
17,716
25,744
Accrued interest
15,703
32,279
16,576
Deferred revenue, current
1,298
1,443
—
Total current liabilities
53,163
64,510
57,261
Long-term debt
1,056,037
1,047,431
1,039,335
Payable to unconsolidated subsidiaries
3,741
4,381
4,400
Other long-term liabilities
33,528
34,228
28,259
Total liabilities
1,146,469
1,150,550
1,129,255
Shareholders’ equity:
Common shares
750
750
750
Additional paid-in capital
1,648,756
1,646,557
1,645,692
Treasury shares, at cost
(652)
(124)
—
Accumulated deficit
(185,049)
(111,463)
(27,484)
Total shareholders’ equity
1,463,805
1,535,720
1,618,958
Total liabilities and shareholders’
equity
$
2,610,274
$
2,686,270
$
2,748,213
PACIFIC DRILLING S. A. AND
SUBSIDIARIES
Condensed Consolidated Statements
of Cash Flows
(in thousands) (unaudited)
Successor
Predecessor
Six Months
Six Months
Ended June 30,
Ended June 30,
2019
2018
Cash flow from operating
activities:
Net loss
$
(157,565)
$
(199,795)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization expense
118,229
139,990
Amortization of deferred revenue
(1,146)
(12,003)
Amortization of deferred costs
586
9,261
Amortization of debt premium, net
(221)
—
Interest paid-in-kind
16,923
—
Deferred income taxes
4,760
(2,408)
Share-based compensation expense
3,064
1,171
Reorganization items
—
6,877
Changes in operating assets and
liabilities:
Accounts receivable
(24,854)
3,316
Materials and supplies
(2,012)
1,955
Prepaid expenses and other assets
(15,229)
3,871
Accounts payable and accrued expenses
3,155
(19,039)
Deferred revenue
2,444
(481)
Net cash used in operating activities
(51,866)
(67,285)
Cash flow from investing
activities:
Capital expenditures
(21,454)
(10,788)
Net cash used in investing activities
(21,454)
(10,788)
Cash flow from financing
activities:
Payments for shares issued under
share-based compensation plan
—
(4)
Payments for financing costs
(1,115)
—
Purchases of treasury shares
(652)
—
Net cash used in financing activities
(1,767)
(4)
Net decrease in cash and cash
equivalents
(75,087)
(78,077)
Cash, cash equivalents and restricted
cash, beginning of period
389,075
317,448
Cash, cash equivalents and restricted
cash, end of period
$
313,988
$
239,371
EBITDA and Adjusted EBITDA
Reconciliation
EBITDA is defined as earnings before interest expense, taxes,
depreciation and amortization. Adjusted EBITDA is defined as
earnings before interest expense, taxes, depreciation,
amortization, equity earnings in unconsolidated subsidiaries,
expenses to unconsolidated subsidiaries, net and reorganization
items. EBITDA and Adjusted EBITDA do not represent and should not
be considered an alternative to net income, operating income, cash
flow from operations or any other measure of financial performance
presented in accordance with U.S. generally accepted accounting
principles (“GAAP”) and our calculation of EBITDA and Adjusted
EBITDA may not be comparable to that reported by other companies.
EBITDA and Adjusted EBITDA are included herein because they are
used by management to measure the Company’s operations. Management
believes that EBITDA and Adjusted EBITDA present useful information
to investors regarding the Company’s operating performance.
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Supplementary Data—Reconciliation
of Net Loss to Non-GAAP EBITDA and Adjusted EBITDA
(in thousands) (unaudited)
Successor
Predecessor
Successor
Predecessor
Three Months
Three Months
Three Months
Six Months
Six Months
Ended
Ended
Ended
Ended
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2019
2019
2018
2019
2018
Net loss
$
(73,586)
$
(83,979)
$
(103,744)
$
(157,565)
$
(199,795)
Add:
Interest expense
24,406
24,039
17,211
48,445
32,140
Depreciation and amortization expense
59,330
58,899
70,070
118,229
139,990
Income tax expense
3,868
2,969
478
6,837
752
EBITDA
$
14,018
$
1,928
$
(15,985)
$
15,946
$
(26,913)
Add:
Equity earnings in unconsolidated
subsidiaries
263
1,052
—
1,315
—
Expenses to unconsolidated subsidiaries,
net
437
272
—
709
—
Reorganization items
878
1,003
13,477
1,881
25,509
Adjusted EBITDA
$
15,596
$
4,255
$
(2,508)
$
19,851
$
(1,404)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190812005623/en/
Investor Contact: James Harris Pacific Drilling S.A. +713 334
6662 Investor@pacificdrilling.com
Media Contact: Amy Roddy Pacific Drilling S.A. +713 334 6662
Media@pacificdrilling.com
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