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Northern Offshore's 1Q Results Boosted by Cost Savings
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Northern Offshore has reported its first quarter 2015 results.
Highlights:
(All $ in USD)
- Northern Offshore, Ltd. (Oslo Børs: NOF.OL) today reported net income for the three months ended March 31, 2015, of $5.9 million, or $0.04 per diluted share, on revenues of $44.6 million.
- The Company generated adjusted EBITDA of $14.1 million in the first quarter 2015.
- The semisubmersible Energy Driller concluded its three year contract with ONGC on April 18, 2015 and was moved to a stacking location in Bahrain where it will remain while the Company actively pursues marketing opportunities in the Asia Pacific Region.
- The jackup Energy Endeavour concluded its drilling program with Wintershall on May 13, 2015 and has been relocated to Rotterdam, the Netherlands. The Company continues to market the unit for immediate employment.
Gary W. Casswell, Northern Offshore's President and CEO, commented: "Our first quarter results exceeded our expectations due to the acceleration of the cost savings initiatives implemented by the Company. Both the semisubmersible Energy Driller and jackup Energy Endeavour successfully concluded their drilling programs and are located at their stacking locations.
"Following release from its previous contract in Nigeria, the Company made a strategic relocation of the drillship Energy Searcher to the Middle East/Asia Pacific Region to pursue marketing opportunities in those areas while taking advantage of a lower cost layup location.
"As we look forward, we will rely heavily on our experienced and dedicated management team to remain focused on cost control and capital discipline while continuing to market our services in a highly competitive environment. "
First Quarter Analysis
Net income for the three months ended March 31, 2015 of $5.9 million, or $0.04 per diluted share, with revenues of $44.6 million compares to net income of $10.0 million, or $0.06 per diluted share, with revenues of $49.4 million for the first quarter of 2014.
Revenues for the three months ended March 31, 2015 were $4.9 million lower than the same period in 2014, primarily related to the floating production facility Northern Producer as the tariff revenue was negatively impacted by a combination of lower production volume and decrease in the tariff rate due to the decline in the price of North Sea Brent. Drilling and production expenses for the three months ended March 31, 2015 were $1.8 million higher as compared to the same period in 2014, primarily due to an increase in operating expenses for the drillship Energy Searcher relating to the completion of its contract offshore Nigeria. Partially offsetting this increase was an overall decrease in operating expenses for the remainder of the fleet primarily due to lower labor, repair and maintenance costs.
First quarter 2015 depreciation, general and administrative expenses, interest expense, and other financial items were comparable to those of the same period in 2014.
Tariff revenues from the floating production facility Northern Producer averaged approximately $39,000 per day in the first quarter of 2015. The company expects pricing levels to remain stable and production to decrease slightly in line with the forecast decline rates.
As of today, the company has an outstanding credit facility balance of $29 million and an unrestricted cash balance of approximately $37 million.