HOUSTON, May 10, 2022
/PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today
reported the following results for the first quarter of 2022:
|
Three Months
Ended
|
Thousands of
dollars, except per share data
|
March 31,
2022
|
|
December 31,
2021
|
Total
revenues
|
$
186,239
|
|
$
227,278
|
Operating
loss
|
(33,916)
|
|
(127,296)
|
Adjusted operating
(loss) income
|
(33,916)
|
|
5,153
|
Adjusted
EBITDA
|
(11,008)
|
|
29,690
|
Net loss
|
(34,354)
|
|
(124,868)
|
Adjusted net (loss)
income
|
(34,354)
|
|
8,216
|
Loss per diluted
share
|
$
(0.34)
|
|
$
(1.25)
|
Adjusted (loss) income
per diluted share
|
$
(0.34)
|
|
$
0.07
|
Bernie Wolford, Jr., President and
Chief Executive Officer of Diamond Offshore, stated, "I am pleased
that during the quarter we were able to relist Diamond Offshore on
the New York Stock Exchange and commence the West Auriga
contract for BP. The Company has a long and successful history in
offshore drilling, and we look forward to the opportunities before
us as the recovery in the industry unfolds. I would like to take
this opportunity to give a special thanks to the hard-working women
and men of Diamond Offshore for their dedication and support in
making the Company a premier offshore driller. It is because of
their continuing efforts that we have been able to successfully
secure backlog and safely exceed the high expectations of our
global client base.
"In addition, I am happy to acknowledge the appointment of
Benjamin Duster to our Board of
Directors. Ben brings a wealth of experience to our Board and will
be a valuable asset as we continue to navigate this dynamic
market."
First Quarter Results
Contract drilling revenue for the first quarter totaled
$150 million compared to $184 million in the fourth quarter of 2021. The
decline in revenue was primarily driven by the Ocean Apex,
which was off contract during the first quarter of 2022 but began
working under a new contract in May
2022. Additionally, during the first quarter, the Ocean
Patriot and Ocean Endeavor were both out of service for
repairs, including a special survey for the Ocean Patriot.
Both rigs are now back on contract and working in the North Sea.
Contract drilling expense for the first quarter totaled
$145 million compared to $139 million in the fourth quarter of 2021. The
increase was primarily driven by the shipyard projects for the
Ocean Patriot and Ocean Endeavor. The Ocean
Endeavor may require another out-of-service period for further
repairs and enhancements later in 2022, subject to ongoing
assessments.
Diamond Offshore added $29 million
of backlog during the first quarter, bringing the Company's total
contracted backlog as of April 1,
2022 to $1.2 billion, which
represents 15.6 rig years of work.
Operational Highlights
During the first quarter, the Company successfully commenced
operations with the West Auriga (one of three rigs managed
by the Company) on a one-year contract. With the commencement of
this contract, Diamond Offshore has three ultra-deepwater
drillships working for BP in the Gulf of
Mexico.
During the quarter, the Company's owned drillship fleet
continued to perform in an exceptional manner, achieving an
operating efficiency of nearly 100% during the quarter. Excluding
the two rigs in shipyard during the first quarter, the Company's
remaining fleet achieved operational efficiency of 97% during the
quarter.
Liquidity and Outlook
As of March 31, 2022, Diamond
Offshore had total liquidity of $388
million, comprised of $54
million of unrestricted cash, and $334 million of available capacity on its
revolving credit facility and delayed draw First Lien Notes.
Discussing the offshore drilling market, Mr. Wolford commented
"We continue to see improvements in the moored, DP and drillship
segments of the market. Rates and utilization for drillships have
improved and are at recent cycle highs, and we expect this trend to
continue in the coming months. The moored segment has also
improved; however, it has been at a more measured pace and more
geographically diverse than that of drillships. We are pleased to
have significant backlog with repricing and new opportunities
available to us in the quarters ahead. Customers continue to favor
working rigs, and we believe Diamond Offshore is well situated for
the repricing cycle currently under way in both the moored and
drillship segments."
ABOUT DIAMOND OFFSHORE
Diamond Offshore is a leader in offshore drilling, providing
innovation, thought leadership and contract drilling services to
solve complex deepwater challenges around the globe. Additional
information and access to the Company's SEC filings are available
at http://www.diamondoffshore.com/.
FORWARD-LOOKING STATEMENTS
Statements contained in this press release that are not
historical facts are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include, but are not limited to, any
statement that may project, indicate or imply future results,
events, performance or achievements, including statements relating
to future financial results; future recovery in the offshore
contract drilling industry; expectations regarding the Company's
plans, strategies and opportunities; expectations regarding the
Company's business or financial outlook; future borrowing capacity
and liquidity; expected utilization, dayrates, revenues, operating
expenses, rig commitments and availability, cash flows, contract
status, terms and duration, contract backlog, capital expenditures,
insurance, financing and funding; the effect, impact, potential
duration and other implications of the ongoing COVID-19 pandemic;
the impact of our emergence from bankruptcy; the offshore drilling
market, including supply and demand, customer drilling programs,
repricings, stacking of rigs, effects of new rigs on the market and
effect of the volatility of commodity prices; expected work
commitments, awards and contracts; future operations; increasing
regulatory complexity; general market, business and industry
conditions, trends and outlook; and general political conditions,
including political tensions, conflicts and war. Forward-looking
statements are inherently uncertain and subject to a variety of
assumptions, risks and uncertainties that could cause actual
results to differ materially from those anticipated or expected by
management of the Company. A discussion of certain of the risk
factors and other considerations that could materially impact these
matters as well as the Company's overall business and financial
performance can be found in Item 1A "Risk Factors" in the Company's
most recent annual report on Form 10-K and the Company's other
reports filed with the Securities and Exchange Commission, and
readers of this press release are urged to review those reports
carefully when considering these forward-looking
statements. Copies of these reports are available through the
Company's website at www.diamondoffshore.com. These risk
factors include, among others, risks associated with worldwide
demand for drilling services, levels of activity in the oil and gas
industry, renewing or replacing expired or terminated contracts,
contract cancellations and terminations, maintenance and
realization of backlog, competition and industry fleet capacity,
impairments and retirements, operating risks, litigation and
disputes, permits and approvals for drilling operations, the
COVID-19 pandemic and related disruptions to the global economy,
supply chain and normal business operations across sectors and
countries, changes in tax laws and rates, regulatory initiatives
and compliance with governmental regulations, casualty losses, and
various other factors, many of which are beyond the Company's
control. Given these risk factors and other considerations,
investors and analysts should not place undue reliance on
forward-looking statements. Each forward-looking statement speaks
only as of the date of this press release, and the Company
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statement
to reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on
which any forward-looking statement is based.
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
|
Contract
drilling
|
|
$ 150,252
|
|
$
184,139
|
Revenues related to
reimbursable expenses
|
|
35,987
|
|
43,139
|
Total
revenues
|
|
186,239
|
|
227,278
|
Operating
expenses:
|
|
|
|
|
Contract drilling,
excluding depreciation
|
|
144,902
|
|
138,647
|
Reimbursable
expenses
|
|
35,613
|
|
42,640
|
Depreciation
|
|
26,952
|
|
24,618
|
General and
administrative
|
|
16,732
|
|
16,301
|
Impairment of
assets
|
|
—
|
|
132,449
|
Gain on disposition of
assets
|
|
(4,044)
|
|
(81)
|
Total operating
expenses
|
|
220,155
|
|
354,574
|
Operating
loss
|
|
(33,916)
|
|
(127,296)
|
Other income
(expense):
|
|
|
|
|
Interest
income
|
|
1
|
|
1
|
Interest
expense
|
|
(8,325)
|
|
(9,306)
|
Foreign currency
transaction loss
|
|
(2,129)
|
|
(1,256)
|
Reorganization items,
net
|
|
—
|
|
(635)
|
Other, net
|
|
1,362
|
|
60
|
Loss before income
tax benefit
|
|
(43,007)
|
|
(138,432)
|
Income tax
benefit
|
|
8,653
|
|
13,564
|
Net
loss
|
|
$ (34,354)
|
|
$
(124,868)
|
Loss per share,
Basic and Diluted
|
|
$
(0.34)
|
|
$
(1.25)
|
Weighted-average
shares outstanding, Basic
and Diluted
|
|
100,075
|
|
100,075
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
53,771
|
|
$
38,388
|
Restricted
cash
|
|
19,202
|
|
24,341
|
Accounts receivable,
net of allowance for credit losses
|
|
119,426
|
|
146,335
|
Prepaid expenses and
other current assets
|
|
62,275
|
|
61,440
|
Asset held for
sale
|
|
—
|
|
1,000
|
Total current
assets
|
|
254,674
|
|
271,504
|
Drilling and other
property and equipment, net of
|
|
|
|
|
accumulated
depreciation
|
|
1,175,357
|
|
1,175,895
|
Other assets
|
|
82,705
|
|
84,041
|
Total assets
|
|
$
1,512,736
|
|
$
1,531,440
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Other current
liabilities
|
|
$
233,950
|
|
$
232,762
|
Long-term
debt
|
|
286,338
|
|
266,241
|
Noncurrent finance
lease liabilities
|
|
144,280
|
|
148,358
|
Deferred tax
liability
|
|
2,462
|
|
1,626
|
Other
liabilities
|
|
107,883
|
|
114,748
|
Stockholders'
equity
|
|
737,823
|
|
767,705
|
Total liabilities and
stockholders' equity
|
|
$
1,512,736
|
|
$
1,531,440
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2022
|
Operating
activities:
|
|
|
Net loss
|
|
$
(34,354)
|
Adjustments to
reconcile net loss to net cash used in
operating activities:
|
|
|
Depreciation
|
|
26,952
|
Loss on impairment of
assets
|
|
—
|
Gain on disposition of
assets
|
|
(4,044)
|
Deferred tax
provision
|
|
(5,217)
|
Stock-based
compensation expense
|
|
4,531
|
Contract liabilities,
net
|
|
(13,411)
|
Contract assets,
net
|
|
(334)
|
Deferred contract
costs, net
|
|
1,850
|
Collateral
deposits
|
|
(1,482)
|
Other assets,
noncurrent
|
|
(302)
|
Other liabilities,
noncurrent
|
|
2,992
|
Other
|
|
418
|
Net changes in
operating working capital
|
|
31,459
|
Net cash provided by
operating activities
|
|
9,058
|
Investing
activities:
|
|
|
Capital
expenditures
|
|
(20,046)
|
Proceeds from
disposition of assets, net of disposal costs
|
|
5,045
|
Net cash used in
investing activities
|
|
(15,001)
|
Financing
activities:
|
|
|
Borrowings under credit
facility
|
|
20,000
|
Principal payments of
finance lease liabilities
|
|
(3,813)
|
Net cash provided by
financing activities
|
|
16,187
|
Net change in cash,
cash equivalents and restricted cash
|
|
10,244
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
62,729
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
72,973
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES AVERAGE DAYRATE, UTILIZATION AND OPERATIONAL
EFFICIENCY (Dayrate in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
FLEET
|
First Quarter
2022
|
Fourth Quarter
2021
|
Average
Dayrate
(1)
|
Utilization
(2)
|
Operational
Efficiency
(3)
|
Average
Dayrate
(1)
|
Utilization
(2)
|
Operational
Efficiency
(3)
|
|
|
|
|
|
|
$225
|
53%
|
84.2%
|
$210
|
68%
|
95.4%
|
|
|
(1)
|
Average dayrate is
defined as total contract drilling revenue for all of the rigs in
our fleet (including managed rigs) per revenue-earning day. A
revenue-earning day is defined as a 24-hour period during which a
rig earns a dayrate after commencement of operations and excludes
mobilization, demobilization and contract preparation
days.
|
(2)
|
Utilization is
calculated as the ratio of total revenue-earning days divided by
the total calendar days in the period for all rigs in our fleet
(including managed and cold-stacked rigs).
|
(3)
|
Operational efficiency
is calculated as the ratio of total revenue-earning days divided by
the sum of total revenue-earning days plus the number of days (or
portions thereof) associated with unanticipated, non-revenue
earning equipment downtime.
|
Non-GAAP Financial Measures (Unaudited)
To supplement the Company's unaudited condensed consolidated
financial statements presented on a basis in conformity with
generally accepted accounting principles in the United States (GAAP), this press release
provides investors with adjusted operating loss, adjusted earnings
before interest, taxes and depreciation and amortization (or
Adjusted EBITDA), adjusted net (loss) income and adjusted (loss)
income per diluted share, which are non-GAAP financial measures.
Management believes that these measures provide meaningful
information about the Company's performance by excluding certain
items that may not be indicative of the Company's ongoing operating
results. This allows investors and others to better compare the
Company's financial results across previous and subsequent
accounting periods and to those of peer companies and to better
understand the long-term performance of the Company. Non-GAAP
financial measures should be considered to be a supplement to, and
not as a substitute for, or superior to, financial measures
prepared in accordance with GAAP.
In order to fully assess the financial operating results of the
Company, management believes that the results of operations
adjusted to exclude various items and their related tax effects are
appropriate measures of the continuing and normal operations of the
Company. The amounts excluded from our adjusted results include (i)
impairment losses recognized in the fourth and first quarters of
2021 and (ii) reorganization items related to our filing for
Chapter 11 bankruptcy protection in 2020. However, these measures
should be considered in addition to, and not as a substitute for,
or superior to, contract drilling revenue, contract drilling
expense, operating income or loss, cash flows from operations or
other measures of financial performance prepared in accordance with
GAAP.
Contact:
Samir Ali
Vice President, Investor
Relations & Corporate
Development
(281) 647-4035
Reconciliation of As
Reported Operating Loss to Adjusted
Operating (Loss) Income:
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2022
|
|
2021
|
|
As reported
operating loss
|
$
(33,916)
|
|
$
(127,296)
|
|
|
Impairment Loss
(1)
|
—
|
|
132,449
|
|
|
|
|
|
|
|
Adjusted operating
(loss) income
|
$
(33,916)
|
|
$
5,153
|
|
|
|
|
|
|
|
(1)
|
Represents the
impairment loss recognized during the fourth quarter of 2021
related to the write down of
two of our semi-submersible rigs to their estimated fair
value.
|
Reconciliation of
Loss Before Income Tax Benefit to Adjusted EBITDA:
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
As reported loss
before income tax benefit
|
$
(43,007)
|
|
$
(138,432)
|
|
Interest
expense
|
8,325
|
|
9,306
|
|
Interest
income
|
(1)
|
|
(1)
|
|
Foreign currency
transaction loss
|
2,129
|
|
1,256
|
|
Reorganization items,
net
|
—
|
|
635
|
|
Depreciation
|
26,952
|
|
24,618
|
|
Impairment of
assets
|
—
|
|
132,449
|
|
Gain on disposition of
assets
|
(4,044)
|
|
(81)
|
|
Other, net
|
(1,362)
|
|
(60)
|
Adjusted
EBITDA
|
$
(11,008)
|
|
$
29,690
|
Reconciliation of As
Reported Net Loss to Adjusted Net (Loss) Income:
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2022
|
|
2021
|
|
As reported net
loss
|
$
(34,354)
|
|
$
(124,868)
|
|
|
Impairment Loss (net of
tax) (1)
|
—
|
|
132,449
|
|
|
Reorganization items
(net of tax) (2)
|
—
|
|
635
|
|
|
|
|
|
|
|
Adjusted net (loss)
income
|
$
(34,354)
|
|
$
8,216
|
|
|
|
|
|
|
|
(1)
|
Represents the
impairment loss recognized during the fourth quarter of 2021
related to the write down of
two of our semi-submersible rigs to their estimated fair
value.
|
|
|
|
|
|
|
(2)
|
Represents legal and
other professional advisory fees pertaining to our filing for
Chapter 11 bankruptcy
protection in 2020.
|
Reconciliation of As
Reported Loss per Diluted Share to Adjusted
(Loss) Income per Diluted Share:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2022
|
|
2021
|
|
As reported loss per
diluted share
|
$
(0.34)
|
|
$
(1.25)
|
|
|
|
|
|
|
|
|
Impairment Loss (net of
tax) (1)
|
—
|
|
1.32
|
|
|
Reorganization items
(net of tax)
|
—
|
|
—
|
|
|
|
|
|
|
|
Adjusted (loss) income
per diluted share
|
$
(0.34)
|
|
$
0.07
|
|
|
|
|
|
|
|
(1)
|
Represents the
impairment loss recognized during the fourth quarter of 2021
related to the write down of
two of our semi-submersible rigs to their estimated fair
value.
|
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SOURCE Diamond Offshore Drilling, Inc.