ZUG, Switzerland, Jan. 26, 2011 /PRNewswire/ -- Noble Corporation today reported fourth quarter 2010 earnings of $99 million, or $0.39 per diluted share, versus $446 million, or $1.72 per diluted share, for the fourth quarter of 2009. Contract drilling services revenues for the fourth quarter of 2010 were $614 million versus $894 million in the fourth quarter of 2009. Earnings for the full year 2010 totaled $3.02 per diluted share compared with $6.42 per diluted share in 2009.
"2010 will be remembered as one of the most challenging years this industry has ever experienced," said David Williams, Chairman, President and Chief Executive Officer. "However, Noble's core values and strengths enabled us to not only weather the storm, but to do so while maintaining operational excellence, improving safety, expanding our geographic diversity and adding significant contract backlog with key customers."
Contract drilling services revenues for the fourth quarter 2010 were $614 million, down 31 percent from the year-earlier quarter. Contract drilling margins for the fourth quarter 2010 were approximately 46 percent, generating $369 million in net cash provided by operating activities during the quarter and $1.7 billion for full year 2010. The Company invested $537 million in capital projects during the quarter, bringing full-year capital spending for 2010 to $1.4 billion. Debt as a percentage of total capitalization increased slightly to 27.5 percent at December 31, 2010, from approximately 27.4 percent at the end of the third quarter 2010.
Fourth Quarter Highlights
At year end 2010, approximately 53 percent of the Company's available rig operating days was committed for 2011 and approximately 31 percent was committed for 2012. The Company's total backlog at December 31, 2010 was approximately $12.7 billion.
In the U.S. Gulf of Mexico, the Noble Danny Adkins resumed work for Shell on full rate in late December. The completion work being performed by the Adkins is expected to last until early February after which time the rig could return to standby rate if Shell does not have another work scope approved. Subsea systems in the Gulf of Mexico, including BOP stacks, have been certified by third parties on the Noble Amos Runner, Noble Clyde Boudreaux, Noble Danny Adkins, Noble Jim Day, Noble Paul Romano, and most recently, the Noble Jim Thompson.
In Mexico, the Noble John Sandifer and the Noble Sam Noble each received short-term extensions beginning early January at dayrates of $74,000-$76,000. In the North Sea, the Noble Byron Welliver received a contract for approximately six months plus two priced option wells beginning early June at a dayrate of $88,000-$91,000. The Noble Lynda Bossler's work with its current customer has been extended by approximately three months. The Noble Homer Ferrington is expected to begin a two-well assignment at the end of the first quarter.
In West Africa, the Noble Lloyd Noble is expected to begin a six-month contract in early February 2011. In the Middle East, the Noble Roy Rhodes received a two-month contract beginning early April 2011 at a dayrate of $88,000-$90,000, after which it will move to a dayrate of $92,000-$94,000 for a five-month contract as of mid May 2011. Also during the quarter, the Noble Joe Beall began a six-month contract for accommodation work at a dayrate of $53,000-$55,000.
In December, Noble announced the construction of two JU3000N high-specification jackups with total costs of $220 million per rig. The Company has options to construct up to four additional units exercisable before year-end 2011. In January, Noble also announced plans to construct two ultra-deepwater drillships at a cost of $605 million per unit. This contract contains options for up to two additional units which must be exercised by early May 2011. One of the drillships has received a Letter of Intent to work for Shell upon delivery in 2013 at a base dayrate of $410,000. The unit will be eligible for a 15 percent performance bonus.
"These newbuild announcements reinforce our strategy of adding high-specification rigs to our fleet at investment levels we believe will generate solid returns," said Williams. "Since 2005, we have more than doubled Noble's floating fleet, and upon completion of our existing newbuild program, we expect to have twelve ultra-deepwater units deployed in major petroleum basins around the world. Likewise, the JU3000N units will continue the modernization of our jackup fleet and be some of the most capable rigs in the world. These newbuilds, each to be constructed under turnkey contracts with proven shipyards, are expected to deliver value for many years to come."
About Noble
Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 73 offshore drilling units (including eight drilling rigs currently under construction), located worldwide, including in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the Mediterranean, the North Sea, Brazil, West Africa and Asian Pacific. Noble also owns and operates a dynamically positioned floating production, storage, offloading vessel. Noble's shares are traded on the New York Stock Exchange under the symbol "NE". Additional information on Noble Corporation is available via the worldwide web at http://www.noblecorp.com/.
Statements regarding contract backlog, earnings, costs, revenue, rig demand, fleet condition or performance, shareholder value, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, costs and difficulties relating to the integration of acquired businesses, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company's most recent Form 10-K, Form 10-Q's and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
Conference Call
Noble also has scheduled a conference call and webcast related to its fourth-quarter and full-year 2010 results on Thursday, January 27, 2011, at 8:00 a.m. U.S. Central Standard Time. Interested parties are invited to listen to the call by dialing 1-866-461-7129, or internationally 1-706-679-3084, using access code: 27248251 or by asking for the Noble Corporation conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Web site.
A replay of the conference call will be available on Thursday, January 27, 2011, beginning at 11:00 a.m. U.S. Central Standard Time, through Thursday, February 10, 2011, ending at 5:00 p.m. U.S. Central Standard Time. The phone number for the conference call replay is 1-800-642-1687 or, for calls from outside of the U.S., 1-706-645-9291, using access code: 27248251. The replay will also be available on the Company's Web site following the end of the live call.
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."
CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended December 31, ------------ 2010 2009 ---- ---- Operating revenues Contract drilling services $614,418 $894,184 Reimbursables 19,668 37,234 Labor contract drilling services 8,816 8,455 Other 883 253 --- --- 643,785 940,126 ------- ------- Operating costs and expenses Contract drilling services 331,930 264,012 Reimbursables 14,955 32,954 Labor contract drilling services 5,486 4,928 Depreciation and amortization 154,463 112,667 Selling, general and administrative 20,736 19,361 Loss on asset disposal/involuntary conversion, net - (214) 527,570 433,708 ------- ------- Operating income 116,215 506,418 Other income (expense) Interest expense, net of amount capitalized (4,338) (424) Interest income and other, net 2,693 1,848 ----- ----- Income before income taxes 114,570 507,842 Income tax provision (16,276) (61,427) ------- ------- Net income 98,294 446,415 ------ ------- Net income attributable to noncontrolling interests 464 - --- --- Net income attributable to Noble Corporation $98,758 $446,415 ======= ======== Net income per share Basic $0.39 $1.72 Diluted $0.39 $1.72 Twelve Months Ended December 31, ------------ 2010 2009 ---- ---- Operating revenues Contract drilling services $2,695,493 $3,509,755 Reimbursables 76,831 99,201 Labor contract drilling services 32,520 30,298 Other 2,332 1,530 ----- ----- 2,807,176 3,640,784 --------- --------- Operating costs and expenses Contract drilling services 1,177,800 1,006,764 Reimbursables 59,414 85,035 Labor contract drilling services 22,056 18,827 Depreciation and amortization 539,829 408,313 Selling, general and administrative 91,997 80,262 Loss on asset disposal/involuntary conversion, net - 30,839 1,891,096 1,630,040 --------- --------- Operating income 916,080 2,010,744 Other income (expense) Interest expense, net of amount capitalized (9,457) (1,685) Interest income and other, net 9,886 6,843 ----- ----- Income before income taxes 916,509 2,015,902 Income tax provision (143,077) (337,260) -------- -------- Net income 773,432 1,678,642 ------- --------- Net income attributable to noncontrolling interests (3) - --- --- Net income attributable to Noble Corporation $773,429 $1,678,642 ======== ========== Net income per share Basic $3.03 $6.44 Diluted $3.02 $6.42 NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 31, December 31, 2010 2009 --- --- ASSETS Current assets Cash and cash equivalents $337,871 $735,493 Accounts receivable 387,414 647,454 Prepaid expenses and other current assets 105,443 100,243 ------- ------- Total current assets 830,728 1,483,190 ------- --------- Property and equipment Drilling equipment and facilities 12,471,283 8,666,750 Other 172,583 143,477 ------- ------- Total property and equipment 12,643,866 8,810,227 Accumulated depreciation (2,595,779) (2,175,775) ---------- ---------- Net property and equipment 10,048,087 6,634,452 ---------- --------- Other assets 342,506 279,254 ------- ------- Total assets $11,221,321 $8,396,896 =========== ========== LIABILITIES AND EQUITY Current liabilities Current maturities of long term debt $80,213 $- Accounts payable 374,814 197,800 Accrued payroll and related costs 125,663 100,167 Taxes payable 15,382 68,760 Other current liabilities 124,309 67,220 ------- ------ Total current liabilities 720,381 433,947 ------- ------- Long-term debt 2,686,484 750,946 Deferred income taxes 258,822 300,231 Other liabilities 268,001 123,340 ------- ------- Total liabilities 3,933,688 1,608,464 --------- --------- Commitments and contingencies Shareholders' equity Shares 917,684 1,130,607 Additional paid-in capital 39,006 - Retained earnings 6,630,500 5,855,737 Treasury shares (373,967) (143,031) Accumulated other comprehensive loss (50,220) (54,881) ------- ------- Total shareholders' equity 7,163,003 6,788,432 --------- --------- Noncontrolling interests 124,630 - Total equity 7,287,633 6,788,432 --------- --------- Total liabilities and equity $11,221,321 $8,396,896 =========== ========== NOBLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Twelve Months Ended December 31, ------------ 2010 2009 ---- ---- Cash flows from operating activities Net income $773,432 $1,678,642 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 539,829 408,313 Loss on asset disposal/ involuntary conversion, net - 30,839 Deferred income tax provision (41,409) 36,866 Share-based compensation expense 34,930 37,995 Pension contributions (16,464) (17,639) Net change in other assets and liabilities 364,058 (38,300) Net cash from operating activities 1,654,376 2,136,716 --------- --------- Cash flows from investing activities New construction (653,269) (717,148) Other capital expenditures (666,673) (594,957) Major maintenance expenditures (103,542) (119,393) Accrued capital expenditures 139,185 (63,561) Acquisition of FDR Holdings Limited, net of cash acquired (1,629,644) - Net cash from investing activities (2,913,943) (1,495,059) ---------- ---------- Cash flows from financing activities Borrowings on bank credit facilities 40,000 - Payments of long-term debt - (172,700) Proceeds from issuance of joint venture partner notes 35,000 - Proceeds from issuance of long- term debt, net 1,238,074 - Proceeds from employee stock transactions 11,828 12,168 Settlements of interest rate swap agreements (6,186) - Dividends/par value reduction payments (227,326) (47,939) Repurchases of employee shares for taxes (10,115) (7,106) Repurchases of shares (219,330) (203,898) -------- -------- Net cash from financing activities 861,945 (419,475) ------- -------- Net change in cash and cash equivalents (397,622) 222,182 Cash and cash equivalents, beginning of period 735,493 513,311 ------- ------- Cash and cash equivalents, end of period $337,871 $735,493 ======== ======== 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, ------------------------------- 2010 ---- Contract Drilling Services Other Total -------- ----- ----- Operating revenues Contract drilling services $614,418 $- $614,418 Reimbursables 19,179 489 19,668 Labor contract drilling services - 8,816 8,816 Other 883 - 883 --- --- --- $634,480 $9,305 $643,785 ======== ====== ======== Operating costs and expenses Contract drilling services $331,930 $- $331,930 Reimbursables 14,483 472 14,955 Labor contract drilling services - 5,486 5,486 Depreciation and amortization 151,256 3,207 154,463 Selling, general and administrative 20,571 165 20,736 Loss on asset disposal/ involuntary conversion, net - - - $518,240 $9,330 $527,570 ======== ====== ======== Operating income $116,240 $(25) $116,215 ======== ==== ======== Operating statistics Jackups: Average Rig Utilization 76% Operating Days 3,019 Average Dayrate $83,023 Semisubmersibles Average Rig Utilization 69% Operating Days 826 Average Dayrate $241,483 Drillships: Average Rig Utilization 90% Operating Days 495 Average Dayrate $302,753 FPSO/Submersibles: Average Rig Utilization 11% Operating Days 31 Average Dayrate $465,616 Total: Average Rig Utilization 73% Operating Days 4,371 Average Dayrate $140,554 Three Months Ended December 31, ------------------------------- 2009 ---- Contract Drilling Services Other Total -------- ----- ----- Operating revenues Contract drilling services $894,184 $- $894,184 Reimbursables 36,199 1,035 37,234 Labor contract drilling services - 8,455 8,455 Other 253 - 253 --- --- --- $930,636 $9,490 $940,126 ======== ====== ======== Operating costs and expenses Contract drilling services $264,012 $- $264,012 Reimbursables 31,967 987 32,954 Labor contract drilling services - 4,928 4,928 Depreciation and amortization 110,054 2,613 112,667 Selling, general and administrative 19,297 64 19,361 Loss on asset disposal/ involuntary conversion, net - (214) (214) $425,330 $8,378 $433,708 ======== ====== ======== Operating income $505,306 $1,112 $506,418 ======== ====== ======== Operating statistics Jackups: Average Rig Utilization 81% Operating Days 3,218 Average Dayrate $131,975 Semisubmersibles Average Rig Utilization 100% Operating Days 997 Average Dayrate $396,302 Drillships: Average Rig Utilization 100% Operating Days 276 Average Dayrate $269,615 FPSO/Submersibles: Average Rig Utilization 0% Operating Days - Average Dayrate $- Total: Average Rig Utilization 83% Operating Days 4,491 Average Dayrate $199,122 Three Months Ended September 30, ------------------ 2010 ---- Contract Drilling Services Other Total -------- ----- ----- Operating revenues Contract drilling services $584,919 $- $584,919 Reimbursables 18,488 689 19,177 Labor contract drilling services - 7,887 7,887 Other 635 - 635 --- --- --- $604,042 $8,576 $612,618 ======== ====== ======== Operating costs and expenses Contract drilling services $315,844 $- $315,844 Reimbursables 13,696 655 14,351 Labor contract drilling services - 5,302 5,302 Depreciation and amortization 140,199 3,083 143,282 Selling, general and administrative 25,220 262 25,482 Loss on asset disposal/ involuntary conversion, net - - - $494,959 $9,302 $504,261 ======== ====== ======== Operating income $109,083 $(726) $108,357 ======== ===== ======== Operating statistics Jackups: Average Rig Utilization 77% Operating Days 3,032 Average Dayrate $90,791 Semisubmersibles Average Rig Utilization 90% Operating Days 1,057 Average Dayrate $172,727 Drillships: Average Rig Utilization 100% Operating Days 468 Average Dayrate $229,963 FPSO/Submersibles: Average Rig Utilization 26% Operating Days 64 Average Dayrate $304,000 Total: Average Rig Utilization 79% Operating Days 4,621 Average Dayrate $126,581 NOBLE CORPORATION AND SUBSIDIARIES CALCULATION OF BASIC AND DILUTED NET INCOME (In thousands, except per share amounts) (Unaudited) The following table sets forth the computation of basic and diluted net income per share: Three Months Ended December 31, ------------ 2010 2009 --- --- Allocation of net income Basic Net income attributable to Noble Corporation $98,758 $446,415 Earnings allocated to unvested share-based payment awards (952) (4,647) ---- ------ Net income to common shareholders - basic $97,806 $441,768 ======= ======== Diluted Net income attributable to Noble Corporation $98,758 $446,415 Earnings allocated to unvested share-based payment awards (950) (4,628) ---- ------ Net income to common shareholders - diluted $97,808 $441,787 ======= ======== Weighted average number of shares outstanding -basic 250,687 256,507 Incremental shares issuable from assumed exercise of stock options 687 1,090 Weighted average number of shares outstanding -diluted 251,374 257,597 ======= ======= Weighted average unvested share- based payment awards 2,439 2,699 ===== ===== Earnings per share Basic $0.39 $1.72 Diluted $0.39 $1.72 The following table sets forth the computation of basic and diluted net income per share: Twelve Months Ended December 31, ------------ 2010 2009 --- --- Allocation of net income Basic Net income attributable to Noble Corporation $773,429 $1,678,642 Earnings allocated to unvested share- based payment awards (7,497) (16,811) ------ ------- Net income to common shareholders - basic $765,932 $1,661,831 ======== ========== Diluted Net income attributable to Noble Corporation $773,429 $1,678,642 Earnings allocated to unvested share- based payment awards (7,481) (16,758) ------ ------- Net income to common shareholders - diluted $765,948 $1,661,884 ======== ========== Weighted average number of shares outstanding -basic 253,123 258,035 Incremental shares issuable from assumed exercise of stock options 813 856 Weighted average number of shares outstanding -diluted 253,936 258,891 ======= ======= Weighted average unvested share- based payment awards 2,438 2,611 ===== ===== Earnings per share Basic $3.03 $6.44 Diluted $3.02 $6.42
Noble Corporation
CONTACT: Investors, Lee M. Ahlstrom, Vice President - Investor Relations
and Planning,, +1-281-276-6440, or Media, John S. Breed, Director of Corporate
Communications, +1-281-276-6729, both of Noble Drilling Services Inc.
Web Site: http://www.noblecorp.com/
