- Pacific Khamsin contracted by
Equinor for work in the Gulf of Mexico
- Delivered revenue efficiency of
98.1% for the first quarter
Pacific Drilling S.A. (NYSE: PACD) (“Pacific Drilling” or the
“Company”) today reported results for the first quarter of 2019.
Net loss for the first-quarter 2019 was $84.0 million or $1.12 per
diluted share. EBITDA(a) for the first-quarter 2019 was $1.9
million.
“Our strong operational performance, reflected by 98.1% revenue
efficiency for the quarter, and focus on spend management,
delivered improved results and positive EBITDA for the quarter. We
continue to make changes in our supply chain and maintenance
processes that meaningfully reduce our operating costs while
delivering safe, reliable and efficient operations,” said CEO
Bernie Wolford.
“While the market remains challenging, we are encouraged by the
upturn in utilization within the sector and continued improvement
in demand as indicated by tender activity and direct discussions
with clients. We are ideally positioned to benefit from this
increasing demand for our available 6th and 7th generation
drillships.”
“The contract with Equinor for the Pacific Khamsin is a clear
acknowledgement of our record of delivering exceptional
performance. Having capable and experienced crews maintaining our
smart-stacked rigs supported by a strong technical team committed
to performance will allow us to deliver the 7th generation Pacific
Khamsin drillship in a ready to work condition with economy and
efficiency. Additionally, our integrated service experience will
play a key role in providing Equinor with a package of services in
support of their success.”
First-Quarter 2019 Operational and
Financial Commentary
First-quarter 2019 contract drilling revenue was $65.9 million,
which included $3.4 million in reimbursable revenue and $0.6
million of deferred revenue amortization. This compared to
fourth-quarter 2018 contract drilling revenue of $59.6 million,
which included $1.4 million in reimbursable revenue and $2.9
million of deferred revenue amortization. The increase in revenue
resulted primarily from the Pacific Bora operating for the full
quarter under the contract with Nigerian Agip Exploration Limited,
a subsidiary of Eni, compared to only a portion of the period in
fourth-quarter 2018.
Operating expenses for the first quarter of 2019 were $52.3
million compared to $44.8 million in the fourth quarter of 2018.
The increase in operating expenses was primarily due to costs of
the Pacific Santa Ana ramping up to commence its contract with
Total E&P Senegal in Senegal. Additionally, operating expenses
included reimbursable revenue expenses for first-quarter 2019 of
$2.4 million compared to $1.1 million in fourth-quarter 2018.
General and administrative expenses for the first quarter of
2019 were $11.2 million, as compared to $13.8 million for the
fourth quarter of 2018. The decrease in general and administrative
expenses was primarily due to the impact of a heightened emphasis
on cost control and process optimization.
Adjusted EBITDA(a) for first-quarter 2019 was $4.3 million,
compared to $3.3 million in fourth-quarter 2018.
Capital expenditures for the first quarter of 2019 were $17.6
million compared to $6.2 million in the fourth quarter of 2018. The
increase in capital expenditures was primarily due to payments made
to date to purchase a managed pressure drilling device and
controls.
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 May 13,
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, May 14, 2019 to discuss first-quarter 2019
results. To access the conference call, participants should contact
the Conference Call Operator at +1 888-221-3881 within North
America or +1 720-452-9217 outside of North America approximately
10 minutes prior to the scheduled start time and provide
confirmation code #4796567. 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 #4796567.
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; 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; costs related to stacking of rigs; downtime and
other risks associated with offshore rig operations, including
unscheduled repairs or maintenance, relocations, severe weather or
hurricanes; our small fleet and reliance on a limited number of
clients; 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 2018 Annual Report on Form
20-F filed with the Securities and Exchange Commission on March 12,
2019 and our 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 Period from
Period from Three Months November 20,
October 1, Three Months Ended March 31,
through through Ended March 31, 2019
December 31, 2018 November 19, 2018 2018
Revenues Contract drilling $ 65,916 $ 28,489 $ 31,073 $
82,069
Costs and expenses Operating expenses (52,296 )
(19,744 ) (25,050 ) (64,354 ) General and administrative expenses
(11,246 ) (4,245 ) (9,572 ) (17,204 ) Depreciation and amortization
expense (58,899 ) (27,277 ) (38,187 )
(69,920 ) (122,441 ) (51,266 ) (72,809 )
(151,478 )
Operating loss (56,525 ) (22,777 ) (41,736
) (69,409 )
Other income (expense) Interest expense (24,039
) (10,904 ) (29,046 ) (14,929 ) Reorganization items (1,003 )
(1,300 ) (1,743,556 ) (12,032 ) Interest income 1,972 1,008 428 788
Equity earnings in unconsolidated subsidiaries (1,052 ) 392 — —
Expenses to unconsolidated subsidiaries, net (272 ) (1,198 ) — —
Other income (expense) (91 ) 526 350
(195 )
Loss before income taxes (81,010 )
(34,253 ) (1,813,560 ) (95,777 ) Income tax (expense) benefit
(2,969 ) 6,769 3,261 (274
)
Net loss $ (83,979 ) $ (27,484 ) $ (1,810,299 ) $ (96,051
)
Loss per common share, basic $ (1.12 ) $ (0.37 ) $ (84.72
) $ (4.50 )
Weighted average number of common shares, basic
75,031 75,010 21,368
21,339
Loss per common share, diluted $ (1.12
) $ (0.37 ) $ (84.72 ) $ (4.50 )
Weighted average number of
common shares, diluted 75,031 75,010
21,368 21,339
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands) (unaudited)
March 31,
December 31, 2019 2018 Assets: Cash and
cash equivalents $ 337,173 $ 367,577 Restricted cash 16,965 21,498
Accounts receivable, net 46,895 40,549 Other receivable 28,000
28,000 Materials and supplies 40,598 40,429 Prepaid expenses and
other current assets 16,390 9,149 Total
current assets 486,021 507,202 Property
and equipment, net 1,901,540 1,915,172 Receivable from
unconsolidated subsidiaries 204,790 204,790 Intangible asset 53,025
85,053 Investment in unconsolidated subsidiaries 11,264 11,876
Other assets 29,630 24,120 Total assets
$ 2,686,270 $ 2,748,213
Liabilities and
shareholders’ equity: Accounts payable $ 13,072 $ 14,941
Accrued expenses 17,716 25,744 Accrued interest 32,279 16,576
Deferred revenue, current 1,443 — Total
current liabilities 64,510 57,261
Long-term debt 1,047,431 1,039,335 Payable to unconsolidated
subsidiaries 4,381 4,400 Other long-term liabilities 34,228
28,259 Total liabilities 1,150,550
1,129,255 Shareholders’ equity: Common shares
750 750 Additional paid-in capital 1,646,557 1,645,692 Treasury
shares, at cost (124 ) — Accumulated deficit (111,463 )
(27,484 ) Total shareholders’ equity 1,535,720
1,618,958 Total liabilities and shareholders’ equity
$ 2,686,270 $ 2,748,213
PACIFIC DRILLING S. A. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(in thousands) (unaudited)
Successor Predecessor Period From
Period From Three Months November 20,
October 1, Three Months Ended March 31,
through through Ended March 31, 2019
December 31, 2018 November 19, 2018 2018
Cash flow from operating activities: Net loss $
(83,979 ) $ (27,484 ) $ (1,810,299 ) $ (96,051 ) Adjustments to
reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense 58,899 27,277 38,187 69,920
Amortization of deferred revenue (570 ) — (2,890 ) (6,150 )
Amortization of deferred costs 433 128 1,645 5,007 Amortization of
deferred financing costs — — 1,639 — Amortization of debt premium,
net (112 ) (38 ) — — Interest paid-in-kind 8,208 3,732 4,477 —
Deferred income taxes 2,765 (6,507 ) 7,172 (1,762 ) Share-based
compensation expense 865 599 932 723 Reorganization items — —
1,724,494 4,707 Changes in operating assets and liabilities:
Accounts receivable (6,346 ) (11,670 ) 6,096 (8,284 ) Materials and
supplies (169 ) (122 ) 499 1,109 Prepaid expenses and other assets
(14,222 ) (11,177 ) (39,254 ) 4,451 Accounts payable and accrued
expenses 16,130 (16,490 ) (20,808 ) (12,745 ) Deferred revenue
2,013 — — (1,535 )
Net cash used in operating activities (16,085 )
(41,752 ) (88,110 ) (40,610 )
Cash flow from
investing activities: Capital expenditures (17,613 ) (2,697 )
(3,544 ) (3,888 ) Deconsolidation of Zonda Debtors —
— (4,910 ) — Net cash used in
investing activities (17,613 ) (2,697 ) (8,454
) (3,888 )
Cash flow from financing activities:
Payments for shares issued under share-based compensation plan —
(126 ) — — Payments from debtor-in-possession financing — — (50,000
) — Payments on long-term debt — — (1,136,478 ) — Proceeds from
equity offerings — — 500,000 — Payments for financing costs (1,115
) (13,525 ) (1,933 ) — Purchases of treasury shares (124 )
— — — Net cash used in
financing activities (1,239 ) (13,651 )
(688,411 ) — Net decrease in cash and cash
equivalents (34,937 ) (58,100 ) (784,975 ) (44,498 ) Cash, cash
equivalents and restricted cash, beginning of period 389,075
447,175 1,232,150 317,448
Cash, cash equivalents and restricted cash, end of period $
354,138 $ 389,075 $ 447,175 $ 272,950
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, 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 Period From
Period From Three Months November 20,
October 1, Three Months Ended through
through Ended March 31, December 31,
November 19, March 31, 2019 2018
2018 2018 Net loss $ (83,979 ) $
(27,484 ) $ (1,810,299 ) $ (96,051 )
Add: Interest expense
24,039 10,904 29,046 14,929 Depreciation and amortization expense
58,899 27,277 38,187 69,920 Income tax expense (benefit)
2,969 (6,769 ) (3,261 ) 274
EBITDA $ 1,928 $ 3,928 $ (1,746,327 ) $ (10,928 )
Add: Equity earnings in unconsolidated subsidiaries 1,052
(392 ) — — Expenses to unconsolidated subsidiaries, net 272 1,198 —
— Reorganization items 1,003 1,300
1,743,556 12,032
Adjusted EBITDA
$ 4,255 $ 6,034 $ (2,771 ) $ 1,104
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190513005841/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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