LUXEMBOURG--(BUSINESS WIRE)--
Pacific Drilling S.A. (NYSE: PACD):
-
Revenue for the first quarter of 2013 was $175 million on revenue
efficiency(a) of 90.3%
-
Direct rig related operating expenses, net of reimbursable expenses,
in the first quarter 2013 were $178,000 per day
-
EBITDA(b) for the first quarter of 2013 was $79.7 million
-
Cash flow from operations reached $72.1 million
-
Total extended the Scirocco contract, adding $180 million in backlog
-
Company closed on $1 billion Senior Secured Credit Facility
Pacific Drilling S.A. (NYSE: PACD) today announced revenue of $175.0
million and net income of $15.1 million or $0.07 per diluted share for
the three months ended March 31, 2013. In the prior year period,
excluding loss of hire insurance recovery of $23.7 million, net loss was
$5.3 million or $0.02 per diluted share on revenue of $117.4 million. As
reflected on our March 31, 2012, financial statements, reported net
income for the quarter was $18.3 million or $0.08 per diluted share.
CEO Chris Beckett commented, “We delivered another solid quarter driven
by strong operational uptime and our continued focus on drilling
expenses. I’m encouraged to report that, excluding planned BOP
maintenance, our fleet delivered revenue efficiency in excess of the
fourth quarter’s outstanding results.”
Regarding the state of the offshore drilling market, Mr. Beckett
continued, "The market for deepwater drillships remains healthy with a
steady stream of announcements during the month of April. This continued
market strength bodes well for the Pacific Meltem and our eighth
rig, the Pacific Zonda."
First Quarter 2013 Operational and Financial
Commentary
Contract drilling revenue for the first quarter of 2013 was $175.0
million as compared to $191.9 million in the fourth quarter of 2012. The
lower revenue reflected the 8 fewer rig-days in the first quarter than
in the prior quarter, which translated into a $3.4 million sequential
revenue reduction, together with a $9.6 million reduction in deferred
revenue amortization on the Pacific Scirocco and a 4.3% decrease
in revenue efficiency. The first quarter included deferred revenue
amortization of $16.9 million as compared to $26.5 million in the fourth
quarter of 2012. The reduction in deferred revenue amortization, related
to the Pacific Scirocco’s mobilization, resulted from the
completion of the rig’s initial one-year primary contract term, ended on
January 7, 2013.
During the three months ended March 31, 2013, our operating fleet of
four drillships achieved an average revenue efficiency of
90.3% as compared to 94.6% in the fourth quarter of 2012. Unpaid BOP
maintenance time for the Pacific Scirocco and the Pacific Bora
totaled 19 days, which represented a 5.5% impact on fleet revenue
efficiency. This routine BOP maintenance for two of our drillships,
after extended periods of uninterrupted service, was included in our
first quarter revenue efficiency targets as well as in our full year
efficiency.
Contract drilling expenses for the first quarter of 2013 were $84.5
million as compared to $86.9 million for the fourth quarter of 2012.
Direct rig related daily operating expenses, excluding reimbursable
costs that are fully recovered in our revenue, averaged $178,000 in the
first quarter of 2013, as compared to $168,000 for the fourth quarter of
2012. This increase resulted primarily from higher maintenance costs
related to the planned BOP maintenance on the Pacific Scirocco
and the Pacific Bora and from annual salary increases to our
operational personnel. Contract drilling expenses for the first quarter
of 2013 included $9.6 million in amortization of deferred mobilization
costs and $5.6 million in shore-based and other support costs, as
compared to $18.6 million in deferred mobilization costs and $4.6
million in shore-based and other support costs for the fourth quarter of
2012. The $9.0 million decrease in deferred mobilization costs resulted
from the completion of the Pacific Scirocco’s initial one-year
primary contract term. Total direct rig related daily operating
expenses, including reimbursable costs, averaged $192,000 in the first
quarter of 2013, as compared to $173,000 for the fourth quarter of 2012.
Reimbursable costs accounted for approximately $14,000 per day in the
first quarter of this year as compared to approximately $5,000 per day
in the fourth quarter of 2012. In addition to the normal recurring level
of reimbursable expenses, the first quarter of 2013 included
approximately $2.7 million of specific project and modification costs
fully reimbursed by our clients.
Interest expense for the first quarter of 2013 was $22.8 million as
compared to $32.7 million for the fourth quarter of 2012. The decrease
in interest expense resulted mainly from a fourth quarter 2012 one-time,
non-cash $2.8 million charge related to the accounting for our interest
rate cash flow hedges and decreases in interest incurred on our Project
Facilities Agreement due to both lower outstanding debt balances and
interest rates.
EBITDA for the first quarter of 2013 was $79.7 million, as compared to
EBITDA of $92.7 million during the fourth quarter of 2012.
Liquidity and Capital Expenditures
Our cash balances on March 31, 2013 were $640 million, including $172
million of restricted cash related primarily to our Project Facilities
Agreement and collateral for our temporary importation bonds and lines
of credit. Our total outstanding debt was $2.2 billion as of March 31,
2013.
During the first quarter of 2013, we invested $98 million in the
construction of our fleet. We estimate the remaining capital
expenditures to complete our four newbuild drillships under construction
to be approximately $2.0 billion, including approximately $608 million
for our eighth drillship, the Pacific Zonda.
We anticipate funding the remaining costs of the four newbuild
drillships with a combination of cash on hand, cash flows from
operations, our $1 billion senior secured credit facility agreement
signed in February 2013 and additional debt to be placed prior to the
delivery of our eighth drillship, the Pacific Zonda. We believe
that current financial markets should provide us the opportunity to
refinance our Project Facilities Agreement, further strengthening our
long-term liquidity position. However, the choice, timing and
ultimately, closing of the specific elements of any such financing plans
will be determined by future capital market conditions.
Updates to 2013 Guidance
In the first quarter of 2013, we have added additional disclosure on our
direct rig operating expenses, specifically on the level of costs
reimbursed by our clients. These reimbursable costs include one-time as
well as recurring items that are beyond the initial scope of our
contract and the corresponding initial contractual dayrate. We incur
these costs on behalf of our clients and they are subsequently
reimbursed fully by them. These reimbursable costs can be large and
often fluctuate significantly between periods based on the needs of our
clients, making them difficult to forecast. For this reason, we will
continue to provide additional information on actual and forecast direct
rig related daily operating expenses showing the estimated range
inclusive and exclusive of estimated reimbursable expense charges.
Including reimbursable expenses, we reiterate our annual guidance
provided with our fourth quarter 2012 results of total direct rig
related operating expenses ranging between $182,000 and $187,000 per
operating rig per day. Excluding reimbursable expenses, we estimate the
range for full year direct rig related operating expenses to be between
$175,000 and $180,000 per operating rig per day.
Our 2013 guidance on general and administrative costs represented an
increase over 2012 and also represented an increase to the annualized
general and administrative expenses incurred during the first quarter of
2013. We reiterate our expectation for increases in estimated general
and administrative expenses to occur in future quarters as a result of
annual compensation increases to employees made effective April 1, 2013,
increases in share-based compensation expenses due to new 2013 grants
and increases in the number of employees during 2013 to strengthen our
organization to support an eight rig fleet. Therefore, we expect general
and administrative expenses for the second quarter of 2013 to range
between $13.0 and $14.0 million. We reiterate other annual guidance
provided with our fourth quarter and full year 2012 results.
Updated schedules of expected amortization of deferred revenue,
amortization of deferred mobilization expense, depreciation and interest
expense for our existing financing as well as capital expenditures are
included in the “Investor Toolkit” subsection of the “Investor
Relations” section of our website, www.pacificdrilling.com.
Please note the guidance provided above is based on management’s current
expectations about the future and both stated and unstated assumptions,
and does not constitute any form of guarantee, assurance or promise that
the matters indicated will actually be achieved. Actual conditions and
assumptions are subject to change. The guidance set forth above is
subject to all cautionary statements and limitations described under the
“Forward-Looking Statements” section of this press release.
|
Footnotes
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(a) Revenue efficiency is defined as actual
contractual dayrate revenue (excludes mobilization fees, upgrade
reimbursements and other revenue sources) divided by the maximum
amount of contractual dayrate revenue that could have been earned
during such period.
|
|
(b) EBITDA is a non-GAAP measure. Please refer to the
reconciliation of net income to EBITDA included later in this
press release.
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Conference Call
Pacific Drilling will conduct a conference call at 9:00 a.m. U.S.
Central Time on Tuesday, May 7, 2013, to discuss first quarter 2013
results. To participate, dial +1 785-830-7990 or 1-800-768-6544 and
refer to confirmation code 8755753 approximately five to ten minutes
prior to the scheduled start time of the call. The call will also be
broadcast live over the Internet in a listen-only mode and can be
accessed by a link posted in the “Events & Presentations” subsection of
the “Investor Relations” section of the company’s website, www.pacificdrilling.com.
An audio replay of the conference call will be available after 12:00
p.m. U.S. Central Time on Tuesday, May 7, 2013, by dialing +1
719-457-0820 or 1-888-203-1112 and using access code 8755753. A replay
of the call will also be available on the company’s website.
About Pacific Drilling
With its best-in-class drillships and highly experienced team, Pacific
Drilling is a fast growing company that is committed to becoming the
industry’s preferred ultra-deepwater drilling contractor. Pacific
Drilling’s fleet of eight ultra-deepwater drillships will represent one
of the youngest and most technologically advanced fleets in the world.
The company currently operates four drillships under client contract,
and has four drillships under construction at Samsung Heavy Industries,
two of which are under client contract. 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 in this press release concerning
results for the fiscal period ended March 31, 2013, and the latest
Investor Toolkit may constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include words or phrases such as “believe,” “expect,”
“anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or
other similar words, which are generally not historical in nature, and
specifically include statements involving future operational
performance; revenue efficiency levels; estimated duration of client
contracts; contract dayrate amounts; future contract opportunities;
future contract commencement dates and locations; backlog; timing and
delivery of newbuilds; capital expenditures; growth opportunities;
market outlook; cost adjustments; estimated rig availability; clients;
new rig commitments; the expected period of time and number of rigs that
will be in a shipyard for repairs, maintenance, enhancement or
construction; direct rig operating costs; compensation levels; shore
based support costs; selling, general and administrative expenses;
income tax expense; potential refinancing of our Project Facilities
Agreement; expected amortization of deferred revenue; expected
amortization of deferred mobilization expenses; and expected
depreciation and interest expense for the existing credit facilities and
senior bonds. These forward-looking statements are based on our current
expectations and beliefs concerning future developments and their
potential effect on us. While management believes that these
forward-looking statements are reasonable as and when made, there can be
no assurance that future developments affecting us will be those that we
anticipate. All comments concerning our expectations for future revenue
and operating results are based on our forecasts for our existing
operations and do not include the potential impact of any future
acquisitions. Our forward-looking statements involve significant risks
and uncertainties (some of which are beyond our control) and assumptions
that could cause actual results to differ materially from our historical
experience and our present expectations or projections. Important
factors that could cause actual results to differ materially from those
in the forward-looking statements include, but are not limited to
downtime and other risks associated with offshore rig operations,
including unscheduled repairs or maintenance; relocations, severe
weather or hurricanes; possible cancellation or suspension of drilling
contracts as a result of mechanical difficulties, performance or other
reasons; changes in worldwide rig supply and demand, competition and
technology; future levels of offshore drilling activity; impact of
potential licensing or patent litigation; actual contract commencement
dates; risks inherent to shipyard rig construction, repair, maintenance
or enhancement; environmental or other liabilities, risks or losses;
governmental regulatory, legislative and permitting requirements
affecting drilling operations; our ability to attract and retain skilled
personnel on commercially reasonable terms; governmental action, civil
unrest and political and economic uncertainties; terrorism, piracy and
military action; and the outcome of litigation, legal proceedings,
investigations or other claims or contract disputes.
For additional information regarding known material factors that could
cause our actual results to differ from our projected results, please
see our filings with the SEC, including our Annual Report on Form 20-F
and Current Reports on Form 6-K.
Readers are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date hereof. 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.
|
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PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets
|
|
(in thousands, except par value and share amounts)
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Assets:
|
|
|
(unaudited)
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
467,691
|
|
|
$
|
605,921
|
|
|
Restricted cash
|
|
|
47,451
|
|
|
|
47,444
|
|
|
Accounts receivable
|
|
|
117,608
|
|
|
|
152,299
|
|
|
Materials and supplies
|
|
|
51,034
|
|
|
|
49,626
|
|
|
Deferred financing costs
|
|
|
22,370
|
|
|
|
17,707
|
|
|
Current portion of deferred mobilization costs
|
|
|
37,519
|
|
|
|
37,519
|
|
|
Prepaid expenses and other current assets
|
|
|
16,598
|
|
|
|
13,930
|
|
|
Total current assets
|
|
|
760,271
|
|
|
|
924,446
|
|
|
Property and equipment, net
|
|
|
3,864,764
|
|
|
|
3,760,421
|
|
|
Restricted cash
|
|
|
124,740
|
|
|
|
124,740
|
|
|
Deferred financing costs
|
|
|
44,791
|
|
|
|
32,157
|
|
|
Other assets
|
|
|
43,242
|
|
|
|
52,164
|
|
|
Total assets
|
|
$
|
4,837,808
|
|
|
$
|
4,893,928
|
|
|
Liabilities and shareholders' equity:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
23,988
|
|
|
$
|
30,230
|
|
|
Accrued expenses
|
|
|
30,686
|
|
|
|
39,345
|
|
|
Current portion of long-term debt
|
|
|
218,750
|
|
|
|
218,750
|
|
|
Accrued interest payable
|
|
|
31,569
|
|
|
|
29,594
|
|
|
Derivative liabilities, current
|
|
|
17,013
|
|
|
|
17,995
|
|
|
Current portion of deferred revenue
|
|
|
68,658
|
|
|
|
66,142
|
|
|
Total current liabilities
|
|
|
390,664
|
|
|
|
402,056
|
|
|
Long-term debt, net of current maturities
|
|
|
1,981,400
|
|
|
|
2,034,958
|
|
|
Deferred revenue
|
|
|
87,835
|
|
|
|
97,014
|
|
|
Other long-term liabilities
|
|
|
40,174
|
|
|
|
44,652
|
|
|
Total long-term liabilities
|
|
|
2,109,409
|
|
|
|
2,176,624
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
Common shares, $0.01 par value, 5,000,000,000 shares authorized,
224,100,000 shares issued and 216,902,000 shares outstanding as of
March 31, 2013 and December 31, 2012
|
|
|
2,169
|
|
|
|
2,169
|
|
|
Additional paid-in capital
|
|
|
2,351,597
|
|
|
|
2,349,544
|
|
|
Accumulated other comprehensive loss
|
|
|
(53,044
|
)
|
|
|
(58,416
|
)
|
|
Retained earnings
|
|
|
37,013
|
|
|
|
21,951
|
|
|
Total shareholders' equity
|
|
|
2,337,735
|
|
|
|
2,315,248
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
4,837,808
|
|
|
$
|
4,893,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
|
(in thousands, except share and per share information) (unaudited)
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Revenues
|
|
|
|
|
|
|
|
Contract drilling
|
|
$
|
175,016
|
|
|
$
|
117,394
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
Contract drilling
|
|
|
(84,452
|
)
|
|
|
(64,911
|
)
|
|
General and administrative expenses
|
|
|
(11,028
|
)
|
|
|
(12,440
|
)
|
|
Depreciation expense
|
|
|
(36,503
|
)
|
|
|
(22,642
|
)
|
|
|
|
|
(131,983
|
)
|
|
|
(99,993
|
)
|
|
Loss of hire insurance recovery
|
|
|
—
|
|
|
|
23,671
|
|
|
Operating income
|
|
|
43,033
|
|
|
|
41,072
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(22,760
|
)
|
|
|
(19,280
|
)
|
|
Other income
|
|
|
192
|
|
|
|
3,010
|
|
|
Income before income taxes
|
|
|
20,465
|
|
|
|
24,802
|
|
|
Income tax expense
|
|
|
(5,403
|
)
|
|
|
(6,457
|
)
|
|
Net income
|
|
$
|
15,062
|
|
|
$
|
18,345
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share, basic
|
|
$
|
0.07
|
|
|
$
|
0.08
|
|
|
Weighted average number of common shares, basic
|
|
|
216,902,000
|
|
|
|
216,900,000
|
|
|
Earnings per common share, diluted
|
|
$
|
0.07
|
|
|
$
|
0.08
|
|
|
Weighted average number of common shares, diluted
|
|
|
216,966,284
|
|
|
|
216,902,496
|
|
|
|
|
|
|
|
|
|
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|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands) (unaudited)
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
|
|
2012
|
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
15,062
|
|
|
$
|
18,345
|
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
|
|
|
|
|
|
|
|
Depreciation expense
|
|
|
36,503
|
|
|
|
22,642
|
|
|
Amortization of deferred revenue
|
|
|
(16,851
|
)
|
|
|
(19,296
|
)
|
|
Amortization of deferred mobilization costs
|
|
|
9,599
|
|
|
|
14,673
|
|
|
Amortization of deferred financing costs
|
|
|
3,687
|
|
|
|
2,861
|
|
|
Deferred income taxes
|
|
|
(677
|
)
|
|
|
418
|
|
|
Share-based compensation expense
|
|
|
2,053
|
|
|
|
923
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
34,691
|
|
|
|
(179,397
|
)
|
|
Materials and supplies
|
|
|
(1,408
|
)
|
|
|
(1,557
|
)
|
|
Prepaid expenses and other assets
|
|
|
(3,404
|
)
|
|
|
(57,364
|
)
|
|
Accounts payable and accrued expenses
|
|
|
(17,296
|
)
|
|
|
17,639
|
|
|
Deferred revenue
|
|
|
10,188
|
|
|
|
131,141
|
|
|
Net cash provided by (used in) operating activities
|
|
|
72,147
|
|
|
|
(48,972
|
)
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(134,959
|
)
|
|
|
(102,115
|
)
|
|
Decrease (increase) in restricted cash
|
|
|
(7
|
)
|
|
|
19,486
|
|
|
Net cash used in investing activities
|
|
|
(134,966
|
)
|
|
|
(82,629
|
)
|
|
Cash flow from financing activities:
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
1,000
|
|
|
|
300,000
|
|
|
Payments on long-term debt
|
|
|
(54,687
|
)
|
|
|
—
|
|
|
Deferred financing costs
|
|
|
(21,724
|
)
|
|
|
(6,333
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
(75,411
|
)
|
|
|
293,667
|
|
|
Increase in cash and cash equivalents
|
|
|
(138,230
|
)
|
|
|
162,066
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
605,921
|
|
|
|
107,278
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
467,691
|
|
|
$
|
269,344
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Reconciliation
EBITDA is defined as earnings before interest, taxes, depreciation and
amortization. EBITDA does 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 generally accepted accounting principles in the United States of
America (“GAAP”) and our calculation of EBITDA may not be comparable to
that reported by other companies. EBITDA is included herein because it
is used by the Company to measure its operations. We believe that EBITDA
presents useful information to investors regarding the Company's
operating performance.
|
|
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
Supplementary Data - Reconciliation of Net Income to EBITDA
|
|
(in thousands) (unaudited)
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
15,062
|
|
$
|
18,345
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
Interest expense
|
|
|
22,760
|
|
|
19,280
|
|
Depreciation expense
|
|
|
36,503
|
|
|
22,642
|
|
Income taxes
|
|
|
5,403
|
|
|
6,457
|
|
EBITDA
|
|
|
79,728
|
|
|
66,724
|
|
|
|
|
|
|
|
|
Source: Pacific Drilling S.A.