Diamond Offshore Reports Fourth Quarter 2023 Results
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$362 Million in Contract Awards Year to Date 2024 -
$245 Million in Total Backlog Added in Q4 -
Rig Performance Bonus Earned in
Senegal -
Ocean BlackHawk and Ocean Courage Commenced New Contracts in Q4
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Three Months Ended |
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Thousands of dollars, except per share data |
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Total revenues |
$ |
297,637 |
|
|
$ |
244,958 |
|
Operating income |
|
44,915 |
|
|
|
863 |
|
Adjusted EBITDA |
|
72,340 |
|
|
|
27,693 |
|
Net loss |
|
(145,702) |
|
|
|
(145,016) |
|
Adjusted net loss |
|
(145,702) |
|
|
|
(138,792) |
|
Loss per diluted share |
$ |
(1.42) |
|
|
$ |
(1.42) |
|
Adjusted loss per diluted share |
$ |
(1.42) |
|
|
$ |
(1.36) |
|
The recent
Revenue for the fourth quarter totaled
Contract drilling expense for the fourth quarter was
General and administrative expenses were
Tax expense for the fourth quarter was
Operational Highlights
Operationally, the Company's rigs continued to perform well, achieving revenue efficiency of approximately 95% across the fleet for the second successive quarter. This is a notable achievement given the unusually high amount of shipyard activity for the Company's fleet and the start-up of contracts during the quarter. Of note, both the
Additional Updates
The Company will discuss its earnings results and provide first quarter and full year 2024 guidance and an update on recovery operations for certain equipment from the Ocean GreatWhite during the earnings conference call.
CONFERENCE CALL
The earnings conference call has been scheduled for
ABOUT
FORWARD-LOOKING STATEMENTS
Statements contained in this press release and made in the referenced conference call 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, tax rates and accounting treatment, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the effect, impact, potential duration and other implications of the COVID-19 pandemic; 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, including
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited) |
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(In thousands, except per share data) |
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Three Months Ended |
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2023 |
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2023 |
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Revenues: |
|
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|
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|
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Contract drilling |
|
$ |
279,681 |
|
|
$ |
224,929 |
|
Revenues related to reimbursable expenses |
|
|
17,956 |
|
|
|
20,029 |
|
Total revenues |
|
|
297,637 |
|
|
|
244,958 |
|
Operating expenses: |
|
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|
|
|
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Contract drilling, excluding depreciation |
|
|
188,803 |
|
|
|
181,954 |
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Reimbursable expenses |
|
|
17,304 |
|
|
|
18,662 |
|
Depreciation |
|
|
27,705 |
|
|
|
27,785 |
|
General and administrative |
|
|
19,190 |
|
|
|
16,649 |
|
Gain on disposition of assets |
|
|
(280) |
|
|
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(955) |
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Total operating expenses |
|
|
252,722 |
|
|
|
244,095 |
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Operating income |
|
|
44,915 |
|
|
|
863 |
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Other income (expense): |
|
|
|
|
|
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Interest income |
|
|
1,464 |
|
|
|
161 |
|
Interest expense |
|
|
(14,847) |
|
|
|
(13,774) |
|
Foreign currency transaction (loss) gain |
|
|
(2,863) |
|
|
|
184 |
|
Loss on extinguishment of long-term debt |
|
|
— |
|
|
|
(6,529) |
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Other, net |
|
|
(54) |
|
|
|
(485) |
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Income (loss) before income tax expense |
|
|
28,615 |
|
|
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(19,580) |
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Income tax expense |
|
|
(174,317) |
|
|
|
(125,436) |
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Net loss |
|
$ |
(145,702) |
|
|
$ |
(145,016) |
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Loss per share: |
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Basic |
|
$ |
(1.42) |
|
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$ |
(1.42) |
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Diluted |
|
$ |
(1.42) |
|
|
$ |
(1.42) |
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Weighted-average shares outstanding, Basic |
|
|
102,322 |
|
|
|
102,215 |
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Weighted-average shares outstanding, Diluted |
|
|
102,322 |
|
|
|
102,215 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Unaudited) |
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(In thousands) |
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2023 |
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2022 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
|
$ |
124,457 |
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$ |
63,041 |
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Restricted cash |
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|
14,231 |
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|
34,293 |
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Accounts receivable, net of allowance for credit losses |
|
|
254,323 |
|
|
|
172,053 |
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Prepaid expenses and other current assets |
|
|
63,412 |
|
|
|
48,695 |
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Asset held for sale |
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|
1,000 |
|
|
|
— |
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Total current assets |
|
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457,423 |
|
|
|
318,082 |
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Drilling and other property and equipment, net of |
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accumulated depreciation |
|
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1,156,368 |
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1,141,908 |
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Other assets |
|
|
98,762 |
|
|
|
67,966 |
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Total assets |
|
$ |
1,712,553 |
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$ |
1,527,956 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Other current liabilities |
|
$ |
296,150 |
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$ |
261,661 |
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Long-term debt |
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533,514 |
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|
360,644 |
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Noncurrent finance lease liabilities |
|
|
113,201 |
|
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|
131,393 |
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Deferred tax liability |
|
|
10,966 |
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|
700 |
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Other liabilities |
|
|
113,871 |
|
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|
93,888 |
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Stockholders' equity |
|
|
644,851 |
|
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|
679,670 |
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Total liabilities and stockholders' equity |
|
$ |
1,712,553 |
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$ |
1,527,956 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(Unaudited) |
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(In thousands) |
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Year Ended |
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2023 |
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Operating activities: |
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Net loss |
|
$ |
(44,706) |
|
Adjustments to reconcile net loss to net cash used in |
|
|
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Depreciation |
|
|
111,301 |
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Gain on disposition of assets |
|
|
(4,382) |
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Loss on extinguishment of long-term debt |
|
|
6,529 |
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Deferred tax provision |
|
|
(4,617) |
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Stock-based compensation expense |
|
|
14,103 |
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Contract liabilities, net |
|
|
4,580 |
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Contract assets, net |
|
|
(2,434) |
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Deferred contract costs, net |
|
|
(12,099) |
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Collateral deposits |
|
|
(11,857) |
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Other assets, noncurrent |
|
|
1,254 |
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Other liabilities, noncurrent |
|
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(709) |
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Other |
|
|
2,900 |
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Net changes in operating working capital |
|
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(48,083) |
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Net cash provided by operating activities |
|
|
11,780 |
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Investing activities: |
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Capital expenditures |
|
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(131,449) |
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Proceeds from disposition of assets, net of disposal costs |
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|
11,105 |
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Deposits on asset sales |
|
|
307 |
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Net cash used in investing activities |
|
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(120,037) |
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Financing activities: |
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Proceeds from issuance of second lien notes |
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550,000 |
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Borrowings under credit facility |
|
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40,000 |
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Extinguishment of long-term debt |
|
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(192,182) |
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Repayments on exit facilities |
|
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(214,000) |
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Debt issuance costs and arrangement fees |
|
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(17,242) |
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Principal payments of finance lease liabilities |
|
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(16,965) |
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Net cash provided by financing activities |
|
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149,611 |
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Net change in cash, cash equivalents and restricted cash |
|
|
41,354 |
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Cash, cash equivalents and restricted cash, beginning of period |
|
|
97,334 |
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Cash, cash equivalents and restricted cash, end of period |
|
$ |
138,688 |
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AVERAGE DAYRATE, UTILIZATION AND OPERATIONAL EFFICIENCY |
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(Dayrate in thousands) |
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TOTAL FLEET |
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Fourth Quarter |
Third Quarter |
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2023 |
2023 |
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Average Dayrate |
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Utilization |
Revenue Efficiency |
Average Dayrate |
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Utilization |
Revenue Efficiency |
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$ |
316 |
|
69 % |
94.9 % |
$ |
307 |
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57 % |
94.9 % |
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(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
Reconciliation of Income (Loss) Before Income Tax Expense to Adjusted EBITDA: |
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(In thousands) |
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Three Months Ended |
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2023 |
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2023 |
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As reported income (loss) before income tax expense |
|
$ |
28,615 |
|
|
$ |
(19,580) |
|
|
|
Interest expense |
|
|
14,847 |
|
|
|
13,774 |
|
|
Interest income |
|
|
(1,464) |
|
|
|
(161) |
|
|
Foreign currency transaction loss (gain) |
|
|
2,863 |
|
|
|
(184) |
|
|
Loss on extinguishment of long-term debt |
|
|
— |
|
|
|
6,529 |
|
|
Depreciation |
|
|
27,705 |
|
|
|
27,785 |
|
|
Gain on disposition of assets |
|
|
(280) |
|
|
|
(955) |
|
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Other, net |
|
|
54 |
|
|
|
485 |
|
Adjusted EBITDA |
|
$ |
72,340 |
|
|
$ |
27,693 |
|
Reconciliation of As Reported Net Loss to Adjusted Net Loss: |
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(In thousands) |
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Three Months Ended |
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2023 |
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|
2023 |
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As reported net loss |
|
$ |
(145,702) |
|
|
$ |
(145,016) |
|
|
Loss on extinguishment of long-term debt |
|
|
— |
|
|
|
6,529 |
|
|
Tax effect: |
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|
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Loss on extinguishment of long-term debt |
|
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— |
|
|
|
(305) |
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|
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Adjusted net loss |
|
$ |
(145,702) |
|
|
$ |
(138,792) |
|
Reconciliation of As Reported Loss per Diluted Share to Adjusted Loss per Diluted Share: |
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(In thousands) |
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Three Months Ended |
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|
2023 |
|
|
2022 |
|
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As reported loss per diluted share |
$ |
(1.42) |
|
|
$ |
(1.42) |
|
|
Loss on extinguishment of long-term debt |
|
|
— |
|
|
|
0.06 |
|
Tax effect: |
|
|
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|
|
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Loss on extinguishment of long-term debt |
|
|
— |
|
|
|
— |
|
Adjusted loss per diluted share |
$ |
(1.42) |
|
|
$ |
(1.36) |
|
Contact:
Senior Director, Investor Relations
(281) 647-4035
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