SUGAR LAND, Texas, Jan. 23 /PRNewswire-FirstCall/ -- Noble Corporation today reported fourth quarter 2007 earnings of $347.4 million, or $1.29 per diluted share, versus $199.7 million, or $0.74 per diluted share, for the fourth quarter of 2006. Per-share earnings were up 74 percent from the fourth quarter of 2006 and up nine percent from the $1.18 per share reported for the third quarter of 2007. Earnings for the full year 2007 totaled $4.48 per diluted share compared with $2.66 per diluted share in 2006 (split adjusted).
The results for the 2007 fourth quarter include a net after-tax charge of $0.06 per share related to the previously reported fire aboard the drillship Noble Roger Eason and costs associated with the ongoing independent investigation of the Company's Nigerian operations, offset by an insurance recovery on our 2005 Hurricane claims.
"We delivered a strong finish to an outstanding year, with good revenue growth and earnings growth across all four quarters," said Chairman, Chief Executive Officer and President David W. Williams. "At the same time, we are on track with our capital spending program and returned added value to our shareholders through our increased dividend and share repurchases."
Contract drilling services revenues for the 2007 fourth quarter were $761.1 million, up 50 percent from the year-earlier quarter. Contract drilling margin during the fourth quarter 2007 was 68 percent, generating $419.0 million in net cash provided by operating activities. Contract drilling services revenues for the full year were $2.7 billion and earnings were $1.2 billion for 2007, up 44 percent and 65 percent, respectively, from the full year 2006.
The Company invested $344.6 million in capital projects during the quarter, bringing the total for the year to $1.3 billion. Debt as a percentage of total capitalization declined to 15.4 percent at December 31, 2007, from approximately 16.4 percent at the end of the third quarter. In addition, Noble repurchased 1.4 million of the Company's ordinary shares during the fourth quarter 2007, at an average price per share of $52.05, for a total cost of $75.1 million. For the full year 2007, Noble repurchased 4.2 million ordinary shares at an average price per share of $42.31 for a total cost of $178.5 million.
Operations Highlights
At year end 2007, approximately 81 percent of the Company's total rig operating days were committed for 2008 and approximately 40 percent were committed for 2009. During the quarter, Noble entered into contracts for two of the Company's Gulf of Mexico deepwater assets, including a one-year term contract for the Noble Paul Romano at $482,000 per day with Marathon, scheduled to begin January 2009, and a two-year term contract with LLOG on the Noble Lorris Bouzigard, scheduled to begin in May 2008, at $270,000 per day.
In international markets, the Company entered into contract extensions for several of its North Sea jackup units, including the Noble Piet van Ede at $205,000 per day with Gaz de France for the latter half of 2008, a contract with Total for a 100-day well for the Noble Al White at $195,000 per day and a one-year extension for the Noble Julie Robertson with Venture North Sea Gas Ltd. at $198,000 per day expected to commence in the third quarter of 2008.
Shipyard Update
Following delivery and commissioning activities conducted during the fourth quarter 2007, the Noble Roger Lewis is now on location. This new high-specification jackup drilling unit is the first of three such rigs being built for the Company. Noble is the leading supplier of premium jackups in the Middle East, with a fleet that now includes 15 drilling units.
Shipyard work was also completed during the fourth quarter 2007 on the Noble Paul Romano, which received mooring upgrades as part of the Company's NC-5(SM) mooring upgrade initiative. The Romano was returned to service on November 5, 2007. The final unit currently scheduled to receive these upgrades, the Noble Amos Runner, will enter the shipyard this week. It is anticipated that the Runner will return to service in the second quarter 2008.
"Our markets are strong and demand, particularly for deepwater assets, remains high," said Williams. "We have seven deepwater rigs with contracts that roll over later this year or in 2009. Additionally, in the next two years we will bring online five new rigs. These factors, along with our dedication to safety and operational excellence, position us well to take advantage of future opportunities while delivering value to our customers and shareholders."
Noble Corporation is a leading provider of diversified services for the oil and gas industry. The Company performs contract drilling services with its fleet of 62 mobile offshore drilling units located in key markets worldwide, including the U.S. Gulf of Mexico, Middle East, Mexico, the North Sea, Brazil, West Africa and India. The fleet count includes five rigs under construction. Additional information on Noble Corporation is available via the worldwide web at http://www.noblecorp.com/.
This news release may contain "forward-looking statements" about the business, financial performance and prospects of the Company. Statements about the Company's or management's plans, intentions, expectations, beliefs, estimates, predictions, or similar expressions for the future are forward-looking statements. No assurance can be given that the outcomes of these forward-looking statements will be realized, and actual results could differ materially from those expressed as a result of various factors. A discussion of these factors, including risks and uncertainties, is set forth from time to time in the Company's filings with the U.S. Securities and Exchange Commission.
Conference Call
Noble will hold its fourth quarter and full year earnings conference call on Thursday, January 24, 2008, at 1:00 p.m., Central Time. The call may be accessed live via telephone at 800-732-5617 (212-231-2939 for international callers), using pass code 21363624. The call also will be available over the Internet through the "Investor Relations" section of the Company's Web site, using the "Web cast" link. A replay of the conference call will be available on Thursday, January 24, 2008, beginning at 5:00 p.m., Central Time, through Thursday, January 31, 2008, ending at 5:00 p.m., Central Time. The phone number for the conference call replay is 800-633-8284 (402-977-9140 for international callers), using the access code 21363624. The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the "Investor Relations" section of the Company's Web site under the heading "Regulation G Reconciliations."
NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 OPERATING REVENUES Contract drilling services $761,075 $507,846 $2,714,250 $1,886,987 Reimbursables 30,012 23,842 121,241 92,354 Labor contract drilling services 40,166 27,073 156,508 111,201 Engineering, consulting and other 359 63 3,312 9,697 831,612 558,824 2,995,311 2,100,239 OPERATING COSTS AND EXPENSES Contract drilling services 243,882 183,171 880,049 696,264 Reimbursables 26,123 20,390 105,952 79,520 Labor contract drilling services 32,443 21,782 125,624 91,353 Engineering, consulting and other 150 2,970 17,520 16,779 Depreciation and amortization 82,607 65,859 292,987 253,325 Selling, general and administrative 26,686 13,457 85,831 46,272 Hurricane losses and recoveries, net (5,114) (6,300) (3,514) (10,704) 406,777 301,329 1,504,449 1,172,809 OPERATING INCOME 424,835 257,495 1,490,862 927,430 OTHER INCOME (EXPENSE) Interest expense, net of amount capitalized (1,230) (1,033) (13,111) (16,167) Other, net 2,527 3,752 11,151 10,024 INCOME BEFORE INCOME TAXES 426,132 260,214 1,488,902 921,287 INCOME TAX PROVISION (78,752) (60,512) (282,891) (189,421) NET INCOME $347,380 $199,702 $1,206,011 $ 731,866 NET INCOME PER SHARE: Basic $ 1.30 $ 0.74 $ 4.52 $ 2.69 Diluted $ 1.29 $ 0.74 $ 4.48 $ 2.66 WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 267,074 269,004 266,700 271,834 Diluted 269,508 271,570 269,330 274,756 NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 31, December 31, 2007 2006 ASSETS CURRENT ASSETS Cash and cash equivalents $ 161,058 $ 61,710 Accounts receivable 613,115 408,241 Insurance receivables 39,066 54,191 Inventories 3,814 4,461 Prepaid expenses 20,721 20,491 Other current assets 22,417 20,886 Total current assets 860,191 569,980 PROPERTY AND EQUIPMENT Drilling equipment and facilities 6,354,782 5,215,477 Other 80,169 71,870 6,434,951 5,287,347 Accumulated depreciation (1,639,035) (1,428,954) 4,795,916 3,858,393 OTHER ASSETS 208,747 157,541 $5,864,854 $4,585,914 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 10,334 $ 9,629 Accounts payable 198,395 196,111 Accrued payroll and related costs 119,975 93,251 Taxes payable 85,641 52,793 Interest payable 9,951 9,683 Other current liabilities 74,353 64,793 Total current liabilities 498,649 426,260 LONG-TERM DEBT 774,182 684,469 DEFERRED INCOME TAXES 235,923 219,521 OTHER LIABILITIES 62,319 34,019 1,571,073 1,364,269 COMMITMENTS AND CONTINGENCIES MINORITY INTEREST (5,596) (7,348) SHAREHOLDERS' EQUITY Ordinary shares-par value $0.10 per share; 400,000 shares authorized; 268,223 shares issued and outstanding in 2007; 269,184 shares (adjusted for stock split) issued and outstanding in 2006 26,822 26,918 Capital in excess of par value 683,697 775,895 Retained earnings 3,602,870 2,446,056 Accumulated other comprehensive loss (14,012) (19,876) 4,299,377 3,228,993 $5,864,854 $4,585,914 NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Twelve Months Ended December 31, 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES Net income $1,206,011 $731,866 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 292,987 253,325 Impairment loss on assets 10,189 4,849 Deferred income tax provision 16,402 4,137 Share-based compensation expense 34,681 21,560 Pension contribution (42,852) (19,668) Hurricane losses and recoveries, net (5,114) (6,300) Other 40,369 19,742 Other changes in current assets and liabilities: Accounts receivable (204,874) (131,014) Other current assets 23,276 (13,688) Accounts payable (25,671) 53,746 Other current liabilities 68,969 70,160 Net cash provided by operating activities 1,414,373 988,715 CASH FLOWS FROM INVESTING ACTIVITIES New construction (754,967) (670,951) Other capital expenditures (423,657) (382,093) Major maintenance expenditures (108,419) (69,017) Accrued capital expenditures 45,260 31,100 Proceeds from sales of property and equipment 7,910 3,788 Proceeds from sale of business unit 10,000 - Proceeds from Smedvig disposition - 691,261 Proceeds from sales and maturities of marketable securities - 46,002 Net cash used for investing activities (1,223,873) (349,910) CASH FLOWS FROM FINANCING ACTIVITIES Short-term debt borrowing 685,000 - Short-term debt payment (685,000) - Borrowings on bank credit facilities 220,000 - Payments on bank credit facilities (120,000) (135,000) Payments of other long-term debt (9,630) (608,970) Proceeds from issuance of senior notes, net of debt issuance costs - 295,801 Net proceeds from employee stock transactions, including tax benefit 46,472 21,186 Dividends paid (32,197) (21,825) Repurchases of ordinary shares (195,797) (250,132) Net cash used for financing activities (91,152) (698,940) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 99,348 (60,135) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 61,710 121,845 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 161,058 $ 61,710 NOBLE CORPORATION AND SUBSIDIARIES FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT (In thousands, except utilization amounts, operating days and average dayrates) (Unaudited) Three Months Ended December 31, 2007 Contract Drilling Services Other Total OPERATING REVENUES Contract drilling services $761,075 $ - $761,075 Reimbursables 20,233 9,779 30,012 Labor contract drilling services - 40,166 40,166 Engineering, consulting and other 319 40 359 $781,627 $49,985 $831,612 OPERATING COSTS AND EXPENSES Contract drilling services $243,882 $ - $243,882 Reimbursables 16,644 9,479 26,123 Labor contract drilling services - 32,443 32,443 Engineering, consulting and other - 150 150 Depreciation and amortization 79,679 2,928 82,607 Selling, general and administrative 26,181 505 26,686 Hurricane losses and recoveries, net (5,114) - (5,114) $361,272 $45,505 $406,777 OPERATING INCOME $420,355 $ 4,480 $424,835 OPERATING STATISTICS Jackups: Average Rig Utilization 98% Operating Days 3,697 Average Dayrate $138,746 Semisubmersibles - (6,000 feet or greater): Average Rig Utilization 97% Operating Days 626 Average Dayrate $269,146 Semisubmersibles - (less than 6,000 feet): Average Rig Utilization 100% Operating Days 276 Average Dayrate $185,227 Drillships: Average Rig Utilization 74% Operating Days 204 Average Dayrate $118,581 Submersibles: Average Rig Utilization 31% Operating Days 85 Average Dayrate $ 50,695 Total: Average Rig Utilization 93% Operating Days 4,888 Average Dayrate $155,707 (1) Effective January 1, 2007, the Company's 30 percent net profit interest in the Noble Kolskaya is reported in labor contract drilling services. For the quarters ended December 31, 2007, 2006 and September 30, 2007, Noble Kolskaya labor contract drilling margin was $3.2 million, $2.0 million and $4.1 million, respectively. Three Months Ended December 31, 2006 Contract Drilling Services Other Total OPERATING REVENUES Contract drilling services $507,846 $ - $507,846 Reimbursables 16,574 7,268 23,842 Labor contract drilling services - 27,073 27,073 Engineering, consulting and other (1,174) 1,237 63 $523,246 $35,578 $558,824 OPERATING COSTS AND EXPENSES Contract drilling services $183,171 $ - $183,171 Reimbursables 13,930 6,460 20,390 Labor contract drilling services - 21,782 21,782 Engineering, consulting and other - 2,970 2,970 Depreciation and amortization 64,600 1,259 65,859 Selling, general and administrative 12,610 847 13,457 Hurricane losses and recoveries, net (6,300) - (6,300) $268,011 $33,318 $301,329 OPERATING INCOME $255,235 $ 2,260 $257,495 OPERATING STATISTICS Jackups: Average Rig Utilization 93% Operating Days 3,431 Average Dayrate $ 89,769 Semisubmersibles - (6,000 feet or greater): Average Rig Utilization 100% Operating Days 552 Average Dayrate $242,468 Semisubmersibles - (less than 6,000 feet): Average Rig Utilization 60% Operating Days 166 Average Dayrate $138,141 Drillships: Average Rig Utilization 100% Operating Days 276 Average Dayrate $101,491 Submersibles: Average Rig Utilization 74% Operating Days 205 Average Dayrate $ 73,607 Total: Average Rig Utilization 92% Operating Days 4,630 Average Dayrate $109,666 (1) Effective January 1, 2007, the Company's 30 percent net profit interest in the Noble Kolskaya is reported in labor contract drilling services. For the quarters ended December 31, 2007, 2006 and September 30, 2007, Noble Kolskaya labor contract drilling margin was $3.2 million, $2.0 million and $4.1 million, respectively. Three Months Ended September 30, 2007 Contract Drilling Services Other Total OPERATING REVENUES Contract drilling services $718,756 $ - $718,756 Reimbursables 24,234 7,244 31,478 Labor contract drilling services - 40,622 40,622 Engineering, consulting and other 401 19 420 $743,391 $47,885 $791,276 OPERATING COSTS AND EXPENSES Contract drilling services $227,276 $ - $227,276 Reimbursables 20,820 6,855 27,675 Labor contract drilling services - 32,324 32,324 Engineering, consulting and other - 6,073 6,073 Depreciation and amortization 75,627 2,365 77,992 Selling, general and administrative 24,112 505 24,617 Hurricane losses and recoveries, net 1,600 - 1,600 $349,435 $48,122 $397,557 OPERATING INCOME $393,956 $ (237) $393,719 OPERATING STATISTICS Jackups: Average Rig Utilization 95% Operating Days 3,532 Average Dayrate $126,342 Semisubmersibles - (6,000 feet or greater): Average Rig Utilization 99% Operating Days 636 Average Dayrate $282,807 Semisubmersibles - (less than 6,000 feet): Average Rig Utilization 100% Operating Days 276 Average Dayrate $178,403 Drillships: Average Rig Utilization 87% Operating Days 241 Average Dayrate $130,019 Submersibles: Average Rig Utilization 68% Operating Days 188 Average Dayrate $ 63,812 Total: Average Rig Utilization 94% Operating Days 4,873 Average Dayrate $147,501 (1) Effective January 1, 2007, the Company's 30 percent net profit interest in the Noble Kolskaya is reported in labor contract drilling services. For the quarters ended December 31, 2007, 2006 and September 30, 2007, Noble Kolskaya labor contract drilling margin was $3.2 million, $2.0 million and $4.1 million, respectively.
