- Equinor exercised a second option well, securing backlog for
Pacific Khamsin into third-quarter 2020
- Pacific Bora awarded a new one-well contract from ENI in
Oman
Pacific Drilling S.A. (NYSE: PACD) (“Pacific Drilling” or the
“Company”) today reported results for the third quarter of 2019.
Net loss for third-quarter 2019 was $90.8 million or $1.21 per
diluted share, compared to net loss of $73.6 million or $0.98 per
diluted share in second-quarter 2019.
Pacific Drilling CEO Bernie Wolford commented, “We continue to
add meaningful backlog, demonstrating the strength of our marketing
team, our reputation for high performance and the quality of our
modern fleet. We are pleased to have the Pacific Khamsin committed
through the end of the third-quarter 2020.”
Third-Quarter 2019 Operational and
Financial Commentary
Third-quarter 2019 contract drilling revenue was $54.3 million,
which included $3.1 million in reimbursable revenue. This compared
to second-quarter 2019 contract drilling revenue of $76.4 million,
which included $3.8 million in reimbursable revenue. The decrease
in revenue resulted primarily from the Pacific Sharav completing
its legacy Chevron five-year contract in late August 2019 and
rolling over to continue working for Chevron at a lower dayrate
reflective of the current market. Additionally, the Pacific Bora
completed operations with ENI in Nigeria in July 2019.
Operating expenses for third-quarter 2019 were $60.3 million
compared to $52.3 million in second-quarter 2019. The increase in
operating expenses was primarily due to ramp-up costs as Pacific
Khamsin prepares to commence its contract with Equinor in the U.S.
Gulf of Mexico. Additionally, operating expenses included
reimbursable revenue expenses for third-quarter 2019 of $2.6
million compared to $3.0 million in the second quarter of 2019.
General and administrative expenses for the third quarter of
2019 were $8.9 million, as compared to $10.0 million for the second
quarter of 2019.
EBITDA(a) for third-quarter 2019 was $(14.3) million, compared
to $14.0 million in second-quarter 2019 as a result of the
decreases to revenue and increases to operating expenses described
above.
Capital expenditures for the third quarter of 2019 were $9.7
million compared to $3.8 million in the second quarter of 2019. The
increase in capital expenditures was primarily due to payments made
to purchase a managed pressure drilling system.
Footnotes
(a)
EBITDA and Adjusted EBITDA are non-GAAP
financial measures. For a definition of EBITDA and Adjusted EBITDA
and a reconciliation to net loss, 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 updated 2019 guidance as of
November 5, 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 Wednesday, November 6, 2019 to discuss
third-quarter 2019 results. To access the conference call,
participants should contact the Conference Call Operator at +1
800-377-9510 within North America or +1 334-777-6978 outside of
North America approximately 10 minutes prior to the scheduled start
time and provide confirmation code #5137602. A replay of the call
also 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 #5137602.
About Pacific Drilling
With its best-in-class drillships and highly experienced team,
Pacific Drilling is committed to exceeding our customers’
expectations by delivering the safest, most efficient and reliable
deepwater drilling services in the industry. 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
Successor
Predecessor
Three Months
Three Months
Three Months
Nine Months
Nine Months
Ended
Ended
Ended
Ended
Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2019
2019
2018
2019
2018
Revenues
Contract drilling
$
54,315
$
76,415
$
56,673
$
196,646
$
205,306
Costs and expenses
Operating expenses
(60,324)
(52,254)
(44,234)
(164,874)
(164,556)
General and administrative expenses
(8,855)
(10,010)
(10,947)
(30,111)
(41,032)
Depreciation and amortization expense
(47,734)
(59,330)
(70,125)
(165,963)
(210,115)
(116,913)
(121,594)
(125,306)
(360,948)
(415,703)
Operating loss
(62,598)
(45,179)
(68,633)
(164,302)
(210,397)
Other income (expense)
Interest expense
(24,459)
(24,406)
(45,446)
(72,904)
(77,586)
Reorganization items
(24)
(878)
(30,599)
(1,905)
(56,108)
Interest income
1,510
1,665
1,019
5,147
2,720
Equity earnings in unconsolidated
subsidiaries
22
(263)
—
(1,293)
—
Expenses to unconsolidated subsidiaries,
net
(510)
(437)
—
(1,219)
—
Other expense
(409)
(220)
(923)
(720)
(2,254)
Loss before income taxes
(86,468)
(69,718)
(144,582)
(237,196)
(343,625)
Income tax expense
(4,315)
(3,868)
(201)
(11,152)
(953)
Net loss
$
(90,783)
$
(73,586)
$
(144,783)
$
(248,348)
$
(344,578)
Loss per common share, basic
$
(1.21)
$
(0.98)
$
(6.78)
$
(3.31)
$
(16.13)
Weighted average shares outstanding,
basic
75,005
75,001
21,368
75,012
21,357
Loss per common share, diluted
$
(1.21)
$
(0.98)
$
(6.78)
$
(3.31)
$
(16.13)
Weighted average shares outstanding,
diluted
75,005
75,001
21,368
75,012
21,357
PACIFIC DRILLING S.A. AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(in thousands) (unaudited)
September 30,
June 30,
December 31,
2019
2019
2018
Assets:
Cash and cash equivalents
$
355,906
$
305,488
$
367,577
Restricted cash
6,076
8,500
21,498
Accounts receivable, net
29,751
65,403
40,549
Other receivable
—
28,000
28,000
Materials and supplies
43,986
42,441
40,429
Prepaid expenses and other current
assets
11,685
14,916
9,149
Total current assets
447,404
464,748
507,202
Property and equipment, net
1,860,724
1,878,848
1,915,172
Receivable from unconsolidated
subsidiaries
204,790
204,790
204,790
Intangible asset
—
20,640
85,053
Investment in unconsolidated
subsidiaries
11,400
11,234
11,876
Other assets
22,252
30,014
24,120
Total assets
$
2,546,570
$
2,610,274
$
2,748,213
Liabilities and shareholders’
equity:
Accounts payable
$
12,009
$
17,835
$
14,941
Accrued expenses
20,292
18,327
25,744
Accrued interest
31,406
15,703
16,576
Deferred revenue, current
5,931
1,298
—
Total current liabilities
69,638
53,163
57,261
Long-term debt
1,064,643
1,056,037
1,039,335
Payable to unconsolidated subsidiaries
4,194
3,741
4,400
Other long-term liabilities
33,143
33,528
28,259
Total liabilities
1,171,618
1,146,469
1,129,255
Shareholders’ equity:
Common shares
751
750
750
Additional paid-in capital
1,650,685
1,648,756
1,645,692
Treasury shares, at cost
(652)
(652)
—
Accumulated deficit
(275,832)
(185,049)
(27,484)
Total shareholders’ equity
1,374,952
1,463,805
1,618,958
Total liabilities and shareholders’
equity
$
2,546,570
$
2,610,274
$
2,748,213
PACIFIC DRILLING S. A. AND
SUBSIDIARIES
Condensed Consolidated Statements
of Cash Flows
(in thousands) (unaudited)
Successor
Predecessor
Nine Months
Nine Months
Ended September 30,
Ended September 30,
2019
2018
Cash flow from operating
activities:
Net loss
$
(248,348)
$
(344,578)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization expense
165,963
210,115
Amortization of deferred revenue
(1,513)
(17,322)
Amortization of deferred costs
879
12,237
Amortization of debt premium, net
(330)
—
Interest paid-in-kind
25,638
456
Deferred income taxes
7,157
(3,069)
Share-based compensation expense
5,076
1,611
Reorganization items
—
22,270
Changes in operating assets and
liabilities:
Accounts receivable
38,798
5,932
Materials and supplies
(3,557)
3,033
Prepaid expenses and other assets
(7,972)
6,292
Accounts payable and accrued expenses
16,729
10,712
Deferred revenue
7,444
(481)
Net cash provided by (used in) operating
activities
5,964
(92,792)
Cash flow from investing
activities:
Capital expenditures
(31,108)
(15,080)
Net cash used in investing activities
(31,108)
(15,080)
Cash flow from financing
activities:
Payments for shares issued under
share-based compensation plan
(82)
(4)
Proceeds from debtor-in-possession
financing
—
50,000
Proceeds from long-term debt
—
1,000,000
Payments for financing costs
(1,215)
(27,422)
Purchases of treasury shares
(652)
—
Net cash provided by (used in) financing
activities
(1,949)
1,022,574
Net increase (decrease) in cash and cash
equivalents
(27,093)
914,702
Cash, cash equivalents and restricted
cash, beginning of period
389,075
317,448
Cash, cash equivalents and restricted
cash, end of period
$
361,982
$
1,232,150
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
Successor
Predecessor
Three Months
Three Months
Three Months
Nine Months
Nine Months
Ended
Ended
Ended
Ended
Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2019
2019
2018
2019
2018
Net loss
$
(90,783)
$
(73,586)
$
(144,783)
$
(248,348)
$
(344,578)
Add:
Interest expense
24,459
24,406
45,446
72,904
77,586
Depreciation and amortization expense
47,734
59,330
70,125
165,963
210,115
Income tax expense
4,315
3,868
201
11,152
953
EBITDA
$
(14,275)
$
14,018
$
(29,011)
$
1,671
$
(55,924)
Add:
Equity earnings in unconsolidated
subsidiaries
(22)
263
—
1,293
—
Expenses to unconsolidated subsidiaries,
net
510
437
—
1,219
—
Reorganization items
24
878
30,599
1,905
56,108
Adjusted EBITDA
$
(13,763)
$
15,596
$
1,588
$
6,088
$
184
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191105006308/en/
Investor Contact: James Harris Pacific Drilling S.A. +713 334
6662 Investor@pacificdrilling.com Media Contact: Amy Roddy Pacific
Drilling S.A. +713 334 6662 Media@pacificdrilling.com
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