- Ocean GreatWhite Awarded Contract
- Three other Rigs Secure Additional Backlog
- 18% Increase in Contract Drilling Revenue and
$26m Increase in EBITDA
HOUSTON, Aug. 9, 2022
/PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO)
today reported the following results for the second quarter of
2022:
|
Three Months
Ended
|
|
Thousands of
dollars, except per share data
|
June 30,
2022
|
|
|
March 31,
2022
|
|
Total
revenues
|
$
|
205,702
|
|
|
$
|
186,239
|
|
Operating
loss
|
|
(9,763)
|
|
|
|
(33,916)
|
|
Adjusted
EBITDA
|
|
15,245
|
|
|
|
(11,008)
|
|
Net loss
|
|
(21,929)
|
|
|
|
(34,354)
|
|
Loss per diluted
share
|
$
|
(0.22)
|
|
|
$
|
(0.34)
|
|
Diamond Offshore also announced contract awards for the
harsh environment semisubmersible Ocean GreatWhite in the
U.K. North Sea, the semisubmersible Ocean Apex in
Australia, and two 7th
generation drillships - the Ocean BlackHornet and a
Diamond-managed rig - in the U.S. Gulf of Mexico. These new
contracts added approximately $610
million of backlog for the Company. The new contracts are in
addition to the $995 million of
backlog reported as of July 1,
2022.
Bernie Wolford, Jr., President
and Chief Executive Officer, commented, "We are pleased to announce
these significant backlog additions. The contract for the Ocean
GreatWhite is a testament to the capabilities of this
high-specification harsh environment asset and comes at a time when
energy security and longer-term demand in the sector are
increasingly visible. With the rig now contracted, we will have
three assets working in the UK sector of the North Sea, allowing us
to better serve our customer base while growing our presence in an
established market."
The Ocean GreatWhite was awarded five wells, with an
estimated duration of 300 days. Contract commencement is
expected in the first quarter of 2023. Total contract value of the
committed scope is approximately $80
million. The contract also includes priced options for up to
eight additional wells.
The Ocean Apex has been awarded three new contracts for
work on the Northwest Shelf of Australia. The first new award
commences in the second quarter of 2023, with an estimated duration
of 75 days. The second award is also for an estimated
duration of 75 days, commencing in direct continuation of the
previous award. The third award has an estimated duration of
150 days with a commencement in 2024. The combined awards add
approximately $90 million of backlog
to the Ocean Apex. Wolford added, "A potential fourth new
contract currently under negotiation would fill out the remaining
availability in 2023, and combined, keep the rig fully contracted
until late 2024."
The Ocean BlackHornet has secured a two-year extension
with its current client in the U.S. Gulf
of Mexico in direct continuation of the rig's current term.
The two-year extension will keep the rig working until early 2025.
Total contract value for the extension is approximately
$290 million.
A Diamond-managed rig has been extended by its current client
for work in the U.S. Gulf of
Mexico for an additional one-year term in direct
continuation of the rig's current term. The contract value
for this extension is approximately $150
million.
Wolford noted, "With improved dayrates and approximately 75% of
2023 marketed capacity contracted, we have an opportunity to earn
considerably higher margins in 2023. I would like to thank everyone
involved in securing this backlog, as these awards are a testament
to the class-leading Diamond Offshore brand, our unwavering
commitment to HSE, and the hard-working people who contribute to
the Diamond Difference."
Second Quarter Results
Contract drilling revenue for the second quarter totaled
$177 million compared to $150 million in the first quarter of 2022. The
increase in revenue was primarily driven by the Ocean Apex
returning to active service under a new contract that commenced in
May 2022, completion of shipyard
stays for the Ocean Endeavor and Ocean Patriot, and a
full quarter of drilling operations for the Auriga. Contract
drilling expense for the second quarter was relatively flat at
$142 million compared to $145 million in the first quarter of 2022. During
the quarter, the Company continued to perform in an exceptional
manner, achieving revenue efficiency of 96.3%.
Operational Highlights
After eight years of continuous and exceptional performance, the
Ocean BlackHawk completed its inaugural contract in the U.S.
Gulf of Mexico. The rig has now
mobilized to Senegal to join the
Ocean BlackRhino. The Ocean Apex returned to work in
May and the Ocean Monarch completed its contract and was
cold stacked.
Notably, three of the Company's rigs reached significant safety
milestones this quarter, each achieving three years without a
recordable incident.
Liquidity and Outlook
As of June 30, 2022, Diamond
Offshore had total liquidity of $339
million, comprised of $43
million of unrestricted cash and $296
million of available capacity on its revolving credit
facility and delayed draw First Lien Notes.
Commenting on the outlook for the offshore drilling market,
Wolford concluded, "The market continues to improve, as reflected
by our recent fixtures for both semisubmersibles and drillships
across multiple regions. Visible demand, energy security concerns,
and tight supply could lead to sustainable demand for our drilling
services for years to come."
CONFERENCE CALL
A conference call to discuss Diamond Offshore's earnings results
has been scheduled for 8:00 a.m. CDT on
Wednesday, August 10, 2022. A live webcast of the call
will be available online on the Company's website,
www.diamondoffshore.com. Participants who want to join the
call via telephone or want to participate in the question and
answer session may register here to receive the dial-in
numbers and unique PIN to access the call. An online replay will
also be available on www.diamondoffshore.com following the
call.
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
|
|
|
|
June
30,
|
|
|
March
31,
|
|
|
|
2022
|
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
Contract
drilling
|
|
$
|
176,879
|
|
|
$
|
150,252
|
|
Revenues related to
reimbursable expenses
|
|
|
28,823
|
|
|
|
35,987
|
|
Total
revenues
|
|
|
205,702
|
|
|
|
186,239
|
|
Operating
expenses:
|
|
|
|
|
|
|
Contract drilling,
excluding depreciation
|
|
|
142,150
|
|
|
|
144,902
|
|
Reimbursable
expenses
|
|
|
28,554
|
|
|
|
35,613
|
|
Depreciation
|
|
|
25,693
|
|
|
|
26,952
|
|
General and
administrative
|
|
|
19,753
|
|
|
|
16,732
|
|
Gain on disposition of
assets
|
|
|
(685)
|
|
|
|
(4,044)
|
|
Total operating
expenses
|
|
|
215,465
|
|
|
|
220,155
|
|
Operating
loss
|
|
|
(9,763)
|
|
|
|
(33,916)
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest
income
|
|
|
—
|
|
|
|
1
|
|
Interest
expense
|
|
|
(10,103)
|
|
|
|
(8,325)
|
|
Foreign currency
transaction gain (loss)
|
|
|
1,607
|
|
|
|
(2,129)
|
|
Other, net
|
|
|
(47)
|
|
|
|
1,362
|
|
Loss before income
tax (expense) benefit
|
|
|
(18,306)
|
|
|
|
(43,007)
|
|
Income tax (expense)
benefit
|
|
|
(3,623)
|
|
|
|
8,653
|
|
Net
loss
|
|
$
|
(21,929)
|
|
|
$
|
(34,354)
|
|
Loss per share,
Basic and Diluted
|
|
$
|
(0.22)
|
|
|
$
|
(0.34)
|
|
Weighted-average
shares outstanding, Basic and Diluted
|
|
|
100,108
|
|
|
|
100,075
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
42,897
|
|
|
$
|
38,388
|
|
Restricted
cash
|
|
|
14,727
|
|
|
|
24,341
|
|
Accounts receivable,
net of allowance for credit losses
|
|
|
151,374
|
|
|
|
146,335
|
|
Prepaid expenses and
other current assets
|
|
|
65,871
|
|
|
|
61,440
|
|
Asset held for
sale
|
|
|
—
|
|
|
|
1,000
|
|
Total current
assets
|
|
|
274,869
|
|
|
|
271,504
|
|
Drilling and other
property and equipment, net of
|
|
|
|
|
|
|
accumulated
depreciation
|
|
|
1,159,535
|
|
|
|
1,175,895
|
|
Other assets
|
|
|
80,319
|
|
|
|
84,041
|
|
Total
assets
|
|
$
|
1,514,723
|
|
|
$
|
1,531,440
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Other current
liabilities
|
|
$
|
237,847
|
|
|
$
|
232,762
|
|
Long-term
debt
|
|
|
306,438
|
|
|
|
266,241
|
|
Noncurrent finance
lease liabilities
|
|
|
140,087
|
|
|
|
148,358
|
|
Deferred tax
liability
|
|
|
2,306
|
|
|
|
1,626
|
|
Other
liabilities
|
|
|
104,193
|
|
|
|
114,748
|
|
Stockholders'
equity
|
|
|
723,852
|
|
|
|
767,705
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,514,723
|
|
|
$
|
1,531,440
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
June 30,
|
|
|
|
2022
|
|
Operating
activities:
|
|
|
|
Net loss
|
|
$
|
(56,283)
|
|
Adjustments to
reconcile net loss to net cash used in
operating activities:
|
|
|
|
Depreciation
|
|
|
52,645
|
|
Loss on impairment of
assets
|
|
|
—
|
|
Gain on disposition of
assets
|
|
|
(4,729)
|
|
Deferred tax
provision
|
|
|
(1,975)
|
|
Stock-based
compensation expense
|
|
|
12,658
|
|
Contract liabilities,
net
|
|
|
(20,870)
|
|
Contract assets,
net
|
|
|
(3,348)
|
|
Deferred contract
costs, net
|
|
|
(3,859)
|
|
Collateral
deposits
|
|
|
17,464
|
|
Other assets,
noncurrent
|
|
|
(443)
|
|
Other liabilities,
noncurrent
|
|
|
428
|
|
Other
|
|
|
842
|
|
Net changes in
operating working capital
|
|
|
(3,335)
|
|
Net cash provided by
(used in) operating activities
|
|
|
(10,805)
|
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
|
|
(32,353)
|
|
Proceeds from
disposition of assets, net of disposal costs
|
|
|
5,788
|
|
Net cash used in
investing activities
|
|
|
(26,565)
|
|
Financing
activities:
|
|
|
|
Borrowings under credit
facility
|
|
|
40,000
|
|
Principal payments of
finance lease liabilities
|
|
|
(7,735)
|
|
Net cash provided by
financing activities
|
|
|
32,265
|
|
Net change in cash,
cash equivalents and restricted cash
|
|
|
(5,105)
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
62,729
|
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
57,624
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
AVERAGE DAYRATE,
UTILIZATION AND REVENUE EFFICIENCY
|
(Dayrate in
thousands)
|
|
|
TOTAL
FLEET
|
Second
Quarter
|
First
Quarter
|
2022
|
2022
|
Average Dayrate
(1)
|
|
Utilization
(2)
|
Revenue
Efficiency
(3)
|
Average Dayrate
(1)
|
|
Utilization
(2)
|
Revenue
Efficiency
(3)
|
|
|
|
|
|
|
|
|
$
|
228
|
|
57 %
|
96.3 %
|
$
|
225
|
|
53 %
|
89.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
Revenue efficiency is
calculated as actual contract drilling revenue earned divided by
potential revenue, assuming a full dayrate is earned.
|
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 earnings before interest, taxes
and depreciation and amortization (or Adjusted EBITDA), which is a
non-GAAP financial measure. Management believes that this measure
provides 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 a supplement 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:
Kevin Bordosky
Senior Director, Investor Relations
(281) 647- 4035
Reconciliation of
Loss Before Income Tax Benefit to Adjusted EBITDA:
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
June
30,
|
|
|
March
31,
|
|
|
|
2022
|
|
|
2022
|
|
|
|
|
|
|
|
|
As reported loss
before income tax (expense) benefit
|
$
|
(18,306)
|
|
|
$
|
(43,007)
|
|
|
Interest
expense
|
|
10,103
|
|
|
|
8,325
|
|
|
Interest
income
|
|
—
|
|
|
|
(1)
|
|
|
Foreign currency
transaction (gain) loss
|
|
(1,607)
|
|
|
|
2,129
|
|
|
Depreciation
|
|
25,693
|
|
|
|
26,952
|
|
|
Gain on disposition of
assets
|
|
(685)
|
|
|
|
(4,044)
|
|
|
Other, net
|
|
47
|
|
|
|
(1,362)
|
|
Adjusted
EBITDA
|
$
|
15,245
|
|
|
$
|
(11,008)
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/diamond-offshore-reports-second-quarter-2022-results-and-announces-610-million-in-new-contract-awards-301603028.html
SOURCE Diamond Offshore Drilling, Inc.