- Pacific Bora contract
extended by Nigerian Agip Exploration Limited, a subsidiary of
Eni
- Total E&P Senegal contracted the
Pacific Santa Ana
- Chevron extends the Pacific Sharav
contract in the US Gulf of Mexico
- Revenue efficiency of 99.8% for the
fourth quarter and 97.8% for the full year 2018
- Pacific Drilling Board and
Shareholders approved $15 million share repurchase program
Pacific Drilling S.A. (NYSE: PACD) (“Pacific Drilling” or the
“Company”) today reported results for the fourth quarter of
2018.
Pacific Drilling CEO Bernie Wolford commented, “Although market
conditions continue to be challenging, we delivered exceptional
operational performance with 99.8% revenue efficiency for the
quarter. The Pacific Drilling team continues to be recognized by
world-class clients for our ability to deliver industry-leading
operational performance. Pacific Bora’s work in Nigeria was
extended by Nigerian Agip Exploration Limited, a subsidiary of Eni,
Pacific Sharav’s work in the U.S. Gulf of Mexico was extended by
Chevron and Pacific Santa Ana secured new work with Total E&P
Senegal in Senegal. Although current dayrates remain challenging,
we see an increase in contracting activity compared to 2018. We
remain focused on securing additional backlog for our currently
operating fleet of three rigs and believe we will have several
opportunities to contract one of our smart-stacked rigs before
year-end.”
Mr. Wolford continued, “Following our emergence from Chapter 11
on November 19, our leadership team placed heightened emphasis on
cost control and G&A process optimization while ensuring that
we continue to deliver the level of high-quality drilling services
for which Pacific Drilling has become recognized in our industry.
Cost reductions as a result of the organizational and process
changes made will extend the benefits of our recapitalization and
result in better margins as the market for deepwater drilling
services improves.”
Fourth-Quarter 2018 Operational and
Financial Commentary
Fourth-quarter 2018 contract drilling revenue was $59.6 million,
which included $2.9 million of deferred revenue amortization. This
compared to third-quarter 2018 contract drilling revenue of $56.7
million, which included $5.3 million of deferred revenue
amortization. The increase in revenue resulted primarily from the
Pacific Bora commencing its contract with Nigerian Agip Exploration
Limited, a subsidiary of Eni.
Operating expenses for the fourth-quarter 2018 were $44.8
million compared to $44.2 million in the third-quarter 2018.
General and administrative expenses for the fourth quarter were
$13.8 million, as compared to $10.9 million for the third-quarter
2018. The increase in general and administrative expenses was
partially due to severance costs for two former members of
executive management.
Upon emergence from bankruptcy on November 19, 2018 (“Plan
Effective Date”), we adopted and applied the relevant guidance with
respect to the accounting and financial reporting for entities that
have emerged from bankruptcy proceedings, or “Fresh Start
Accounting.” Under Fresh Start Accounting, our balance sheet on the
Plan Effective Date reflects all of our assets and liabilities at
fair value. We refer to the Company as the “Successor” for periods
subsequent to November 19, 2018 and as the “Predecessor” for
periods on or prior to November 19, 2018.
Net loss for the fourth-quarter 2018 was $1.8 billion, including
$1,744.9 million of reorganization items of the Predecessor, of
which ($2,514.1) million related to Fresh Start Accounting
adjustments and $794.2 million resulted from gains on settlement of
liabilities subject to compromise.
Adjusted EBITDA(a) for the fourth-quarter 2018 was $3.3 million,
compared to $1.6 million in the third-quarter 2018.
Footnotes
(a) EBITDA and Adjusted EBITDA are non-GAAP financial
measures. For a definition of EBITDA and Adjusted EBITDA and a
reconciliation to net income, please refer to the schedule included
in this release. Management uses this operational metric to track
company results and believes that this measure provides additional
information that highlights the impact of our operating efficiency
as well as the operating and support costs incurred in achieving
the revenue performance.
2019 Guidance
A schedule of Pacific Drilling’s 2019 guidance as of March 11,
2019 is available in the “Quarterly and Annual Results” subsection
of the “Investor Relations” section of our website,
www.pacificdrilling.com.
Conference Call
Pacific Drilling will conduct a conference call at 10 a.m.
Central time on Tuesday, March 12, 2019 to discuss fourth-quarter
and full-year 2018 results. To participate in the March 12 call,
please dial 1-800-479-1004 or +1 720-543-0206 and refer to
confirmation code 1768290 five to 10 minutes prior to the scheduled
start time. A replay of the call will be available on the company’s
website or by dialing +1-888-203-1112 within North America or
+1-719-457-0820 outside of North America and providing confirmation
code 1768290.
About Pacific Drilling
With its best-in-class drillships and highly experienced team,
Pacific Drilling is committed to becoming the industry’s preferred
high-specification, deepwater drilling contractor. Pacific
Drilling’s fleet of seven drillships represents one of the youngest
and most technologically advanced fleets in the world. Pacific
Drilling has principal offices in Luxembourg and Houston. For more
information about Pacific Drilling, including our current Fleet
Status, please visit our website at www.pacificdrilling.com.
Forward-Looking
Statements
Certain statements and information contained in this press
release constitute “forward-looking statements” within the meaning
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, and are generally identifiable by their use of
words such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “forecast,” “intend,” “our ability to,” “may,” “plan,”
“potential,” “predict,” “project,” “projected,” “should,” “will,”
“would”, or other similar words which are not generally historical
in nature. The forward-looking statements speak only as of the date
hereof, and we undertake no obligation to publicly update or revise
any forward-looking statements after the date they are made,
whether as a result of new information, future events or
otherwise.
Our forward-looking statements express our current expectations
or forecasts of possible future results or events, including future
financial and operational performance and cash balances; revenue
efficiency levels; market outlook; forecasts of trends; future
client contract opportunities; future contract dayrates; our
business strategies and plans or objectives of management;
estimated duration of client contracts; backlog; expected capital
expenditures; projected costs and savings; and the potential impact
of our completed Chapter 11 proceedings on our future operations
and ability to finance our business.
Although we believe that the assumptions and expectations
reflected in our forward-looking statements are reasonable and made
in good faith, these statements are not guarantees, and actual
future results may differ materially due to a variety of factors.
These statements are subject to a number of risks and uncertainties
and are based on a number of judgments and assumptions as of the
date such statements are made about future events, many of which
are beyond our control. Actual events and results may differ
materially from those anticipated, estimated, projected or implied
by us in such statements due to a variety of factors, including if
one or more of these risks or uncertainties materialize, or if our
underlying assumptions prove incorrect.
Important factors that could cause actual results to differ
materially from our expectations include: the global oil and gas
market and its impact on demand for our services; the offshore
drilling market, including reduced capital expenditures by our
clients; changes in worldwide oil and gas supply and demand; rig
availability and supply and demand for high-specification
drillships and other drilling rigs competing with our fleet; costs
related to stacking of rigs; our ability to enter into and
negotiate favorable terms for new drilling contracts or extensions;
our ability to successfully negotiate and consummate definitive
contracts and satisfy other customary conditions with respect to
letters of intent and letters of award that we receive for our
drillships; possible cancellation, renegotiation, termination or
suspension of drilling contracts as a result of mechanical
difficulties, performance, market changes or other reasons; our
ability to execute our business plans; the effects of our completed
Chapter 11 proceedings on our future operations; and the other risk
factors described in our Registration Statement on Form F-1 filed
with the SEC on December 18, 2018 and our Current Reports on Form
6-K. These documents are available through our website at
www.pacificdrilling.com or through the SEC’s website at
www.sec.gov.
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Condensed Consolidated Statements of
Operations
(in thousands, except per share
information) (unaudited)
Successor Predecessor Successor
Predecessor Period from Period from
Three Three Period from Period from
November 20, October 1, Months Months
November 20, January 1, Year Year
through through Ended Ended
through through Ended Ended December
31, November 19, September 30, December
31, December 31, November 19, December 31,
December 31, 2018 2018 2018 2017
2018 2018 2017 2016
Revenues Contract drilling $ 28,489 $ 31,073 $ 56,673 $
65,024 $ 28,489 $ 236,379 $ 319,716 $ 769,472
Costs and
expenses Operating expenses (19,744 ) (25,050 ) (44,234 )
(59,728 ) (19,744 ) (189,606 ) (244,089 ) (290,038 ) General and
administrative expenses (4,245 ) (9,572 ) (10,947 ) (22,448 )
(4,245 ) (50,604 ) (87,134 ) (63,379 ) Depreciation and
amortization expense (27,277 ) (38,187 )
(70,125 ) (69,894 ) (27,277 ) (248,302 )
(278,949 ) (275,901 ) (51,266 ) (72,809
) (125,306 ) (152,070 ) (51,266 )
(488,512 ) (610,172 ) (629,318 )
Operating income
(loss) (22,777 ) (41,736 ) (68,633 ) (87,046 ) (22,777 )
(252,133 ) (290,456 ) 140,154
Other income (expense)
Interest expense (10,904 ) (29,046 ) (45,446 ) (27,438 ) (10,904 )
(106,632 ) (178,983 ) (189,044 ) Write-off of deferred financing
costs — — — — — — (30,846 ) — Gain on debt extinguishment — — — — —
— — 36,233 Reorganization items (1,300 ) (1,743,556 ) (30,599 )
(6,474 ) (1,300 ) (1,799,664 ) (6,474 ) — Interest income 1,008 428
1,019 895 1,008 3,148 2,717 362 Equity earnings in unconsolidated
subsidiaries 392 — — — 392 — — — Expenses to unconsolidated
subsidiaries, net (1,198 ) — — — (1,198 ) — — — Other income
(expense) 526 350 (923 )
(899 ) 526 (1,904 ) (8,261 )
(2,755 )
Loss before income taxes (34,253 ) (1,813,560 )
(144,582 ) (120,962 ) (34,253 ) (2,157,185 ) (512,303 ) (15,050 )
Income tax (expense) benefit 6,769 3,261
(201 ) (8,770 ) 6,769
2,308 (12,863 ) (22,107 )
Net loss $
(27,484 ) $ (1,810,299 ) $ (144,783 ) $ (129,732 ) $ (27,484 ) $
(2,154,877 ) $ (525,166 ) $ (37,157 )
Loss per common
share, basic $ (0.37 ) $ (84.72 ) $ (6.78 ) $ (6.08 ) $ (0.37 )
$ (100.89 ) $ (24.64 ) $ (1.76 )
Weighted average number of
common shares, basic 75,010 21,368
21,368 21,338 75,010
21,359 21,315 21,167
Loss per common share, diluted $ (0.37 ) $ (84.72 ) $ (6.78
) $ (6.08 ) $ (0.37 ) $ (100.89 ) $ (24.64 ) $ (1.76 )
Weighted
average number of common shares, diluted 75,010
21,368 21,368 21,338
75,010 21,359 21,315
21,167
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands) (unaudited)
Successor
Predecessor December 31, September 30,
December 31, 2018 2018 2017
Assets: Cash and cash equivalents $ 367,577 $ 199,459 $
308,948 Restricted cash 21,498 1,032,691 8,500 Accounts receivable,
net 40,549 34,977 40,909 Other receivable 28,000 — — Materials and
supplies 40,429 84,299 87,332 Deferred costs, current 482 11,623
14,892 Prepaid expenses and other current assets 8,667
10,214 14,774 Total current
assets 507,202 1,373,263 475,355
Property and equipment, net 1,915,172 4,456,043 4,652,001
Long-term receivable — 202,575 202,575 Receivable from
unconsolidated subsidiaries 204,790 — — Intangible asset 85,053 — —
Investment in unconsolidated subsidiaries 11,876 — — Other assets
24,120 26,742 33,030
Total assets $ 2,748,213 $ 6,058,623 $ 5,362,961
Liabilities and shareholders’ equity: Accounts
payable $ 14,941 $ 14,937 $ 11,959 Accrued expenses 25,744 56,187
36,174 Accrued interest 16,576 32,534 6,088 Deferred revenue,
current — 19,136 23,966
Total current liabilities 57,261 172,794
78,187 Long-term debt, net of current
maturities 1,039,335 961,091 — Payable to unconsolidated
subsidiaries 4,400 — — Deferred revenue — — 12,973 Other long-term
liabilities 28,259 30,494 32,323
Total liabilities not subject to compromise 1,129,255
1,164,379 123,483 Liabilities
subject to compromise — 3,084,836 3,087,677 Shareholders’ equity:
Common shares 750 214 213 Additional paid-in capital 1,645,692
2,368,070 2,366,464 Accumulated other comprehensive loss — (13,915
) (14,493 ) Accumulated deficit (27,484 ) (544,961 )
(200,383 ) Total shareholders’ equity 1,618,958
1,809,408 2,151,801 Total
liabilities and shareholders’ equity $ 2,748,213 $ 6,058,623
$ 5,362,961
PACIFIC DRILLING S. A. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(in thousands) (unaudited)
Successor Predecessor Successor
Predecessor Period from Period from
November Period from Three Three
November Period from 20, October 1,
Months Months 20, January 1,
Year Year through through Ended
Ended through through Ended
Ended December November September
December December November December
December 31, 19, 30, 31,
31, 19, 31, 31, 2018
2018 2018
2017 2018 2018
2017 2016
Cash flow from operating activities: Net loss $ (27,484 ) $
(1,810,299 ) $ (144,783 ) $ (129,732 ) $ (27,484 ) $ (2,154,877 ) $
(525,166 ) $ (37,157 ) Adjustments to reconcile net loss to net
cash provided by (used in) operating activities: Depreciation and
amortization expense 27,277 38,187 70,125 69,894 27,277 248,302
278,949 275,901 Amortization of deferred revenue — (2,890 ) (5,319
) (5,145 ) — (20,212 ) (46,829 ) (67,053 ) Amortization of deferred
costs 128 1,645 2,976 3,080 128 13,882 11,689 13,945 Amortization
of deferred financing costs — 1,639 — — — 1,639 24,889 18,786
Amortization of debt premium, net (38 ) — — — (38 ) — 940 1,279
Interest paid-in-kind 3,732 4,477 456 — 3,732 4,933 — — Write-off
of deferred financing costs — — — — — — 30,846 — Deferred income
taxes (6,507 ) 7,172 (661 ) 7,497 (6,507 ) 4,103 7,409 15,494
Share-based compensation expense 599 932 440 781 599 2,543 6,819
7,094 Gain on debt extinguishment — — — — — — — (36,233 )
Other-than-temporary impairment of available-for-sale securities —
— — 682 — — 6,829 — Reorganization items — 1,724,494 15,393 5,315 —
1,746,764 5,315 — Changes in operating assets and liabilities:
Accounts receivable (11,670 ) 6,096 2,616 (4,548 ) (11,670 ) 12,028
53,713 73,428 Materials and supplies (122 ) 499 1,078 1,999 (122 )
3,532 6,187 2,564 Prepaid expenses and other assets (11,177 )
(39,254 ) 2,421 (10,327 ) (11,177 ) (32,962 ) (20,457 ) (29,276 )
Accounts payable and accrued expenses (16,490 ) (20,808 ) 29,751
20,472 (16,490 ) (10,096 ) 38,214 (24,843 ) Deferred revenue
— — — 3,056
— (481 ) 5,780 35,175 Net
cash provided by (used in) operating activities (41,752 )
(88,110 ) (25,507 ) (36,976 ) (41,752 )
(180,902 ) (114,873 ) 249,104
Cash
flow from investing activities: Capital expenditures (2,697 )
(3,544 ) (4,292 ) (3,883 ) (2,697 ) (18,624 ) (36,645 ) (52,625 )
Deconsolidation of Zonda Debtors — (4,910 ) — — — (4,910 ) — —
Purchase of available-for-sale securities — —
— — — —
(6,000 ) — Net cash used in investing
activities (2,697 ) (8,454 ) (4,292 )
(3,883 ) (2,697 ) (23,534 ) (42,645 )
(52,625 )
Cash flow from financing activities: Payments for
shares issued under share-based compensation plan (126 ) — — — (126
) (4 ) (199 ) (89 ) Proceeds from debtor-in-possession financing —
— 50,000 — — 50,000 — — Payments for debtor-in-possession financing
— (50,000 ) — — — (50,000 ) — — Proceeds from long-term debt — —
1,000,000 — — 1,000,000 — 450,000 Payments on long-term debt —
(1,136,478 ) — — — (1,136,478 ) (146,473 ) (110,832 ) Proceeds from
equity offerings — 500,000 — — — 500,000 — — Payments for financing
costs (13,525 ) (1,933 ) (27,422 ) — (13,525 ) (29,355 ) (4,530 )
(25,423 ) Net cash provided by (used in) financing activities
(13,651 ) (688,411 ) 1,022,578 —
(13,651 ) 334,163 (151,202 )
313,656 Increase (decrease) in cash and cash
equivalents (58,100 ) (784,975 ) 992,779 (40,859 ) (58,100 )
129,727 (308,720 ) 510,135 Cash, cash equivalents and restricted
cash, beginning of period 447,175 1,232,150
239,371 358,307 447,175
317,448 626,168 116,033
Cash, cash equivalents and restricted cash, end of period $
389,075 $ 447,175 $ 1,232,150 $ 317,448
$ 389,075 $ 447,175 $ 317,448 $ 626,168
EBITDA and Adjusted EBITDA
Reconciliation
EBITDA is defined as earnings before interest expense, taxes,
depreciation and amortization. Adjusted EBITDA is defined as
earnings before interest expense, taxes, depreciation,
amortization, other-than-temporary impairment of available-for-sale
securities, write-off of deferred financing costs, gain on debt
extinguishment, equity earnings in unconsolidated subsidiaries,
expenses to unconsolidated subsidiaries, net and reorganization
items. EBITDA and Adjusted EBITDA do not represent and should not
be considered an alternative to net income, operating income, cash
flow from operations or any other measure of financial performance
presented in accordance with U.S. generally accepted accounting
principles (“GAAP”) and our calculation of EBITDA and Adjusted
EBITDA may not be comparable to that reported by other companies.
EBITDA and Adjusted EBITDA are included herein because they are
used by management to measure the Company’s operations. Management
believes that EBITDA and Adjusted EBITDA present useful information
to investors regarding the Company’s operating performance.
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Supplementary Data—Reconciliation of Net
Loss to Non-GAAP EBITDA and Adjusted EBITDA
(in thousands) (unaudited)
Successor Predecessor Successor
Predecessor Period from Period from
Three Three Period from Period from
November 20, October 1, Months Months
November 20, January 1, Year Year
through through Ended Ended
through through Ended Ended December
31, November 19, September 30, December
31, December 31, November 19, December 31,
December 31, 2018 2018 2018 2017
2018 2018 2017 2016 Net
loss $ (27,484 ) $ (1,810,299 ) $ (144,783 ) $ (129,732 ) $
(27,484 ) $ (2,154,877 ) $ (525,166 ) $ (37,157 )
Add:
Interest expense 10,904 29,046 45,446 27,438 10,904 106,632 178,983
189,044 Depreciation and amortization expense 27,277 38,187 70,125
69,894 27,277 248,302 278,949 275,901 Income tax expense (benefit)
(6,769 ) (3,261 ) 201 8,770
(6,769 ) (2,308 ) 12,863
22,107
EBITDA $ 3,928 $ (1,746,327 ) $ (29,011
) $ (23,630 ) $ 3,928 $ (1,802,251 ) $ (54,371 ) $ 449,895
Add (subtract): Other-than-temporary impairment of
available-for-sale securities — — — 682 — — 6,829 — Write-off of
deferred financing costs — — — — — 30,846 — Gain on debt
extinguishment — — — — — — — (36,233 ) Equity earnings in
unconsolidated subsidiaries (392 ) — — — (392 ) — — — Expenses to
unconsolidated subsidiaries, net 1,198 — — — 1,198 — — —
Reorganization items 1,300 1,743,556
30,599 6,474 1,300
1,799,664 6,474 —
Adjusted
EBITDA $ 6,034 $ (2,771 ) $ 1,588 $ (16,474 ) $
6,034 $ (2,587 ) $ (10,222 ) $ 413,662
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version on businesswire.com: https://www.businesswire.com/news/home/20190311005795/en/
Investor Contact:Johannes (John) P. BootsPacific Drilling
S.A.+713 334 6662Investor@pacificdrilling.comMedia Contact:Amy L.
RoddyPacific Drilling S.A.+713 334
6662Media@pacificdrilling.com
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