- Secured $731 million in
contract awards year to date, including $713
million in Q1
- Total backlog was $1.9
billion as of April 1,
2024
- Ocean GreatWhite repairs progressing well; expected back
on location in the first half of June
- Secured marketing rights for 3 high-specification
7th generation drillships
HOUSTON, May 7, 2024
/PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today
reported the following results for the first quarter of 2024:
|
|
Three Months
Ended
|
|
Thousands of
dollars, except per share data
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
Total
revenues
|
|
$
|
274,610
|
|
|
$
|
297,637
|
|
Operating
income
|
|
|
21,813
|
|
|
|
44,915
|
|
Net income
(loss)
|
|
|
11,612
|
|
|
|
(145,702)
|
|
Income (loss) per
diluted share
|
|
|
0.11
|
|
|
|
(1.42)
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
|
31,813
|
|
|
|
44,915
|
|
Adjusted EBITDA
(1)
|
|
|
64,163
|
|
|
|
72,340
|
|
Adjusted net income
(loss)
|
|
|
25,434
|
|
|
|
(145,702)
|
|
Adjusted income (loss)
per diluted share
|
|
|
0.25
|
|
|
|
(1.42)
|
|
|
(1)
Adjusted to exclude the $10 million insurance deductible associated
with a claim for
the Ocean GreatWhite.
|
Bernie Wolford, Jr., President
and Chief Executive Officer, stated, "The demand landscape remains
compelling for our business. The high-specification deepwater rig
supply-demand balance continues to tighten, which is resulting in
strong contracting conditions that have already begun to benefit
our fleet. The average contract dayrate across our fleet will
notably increase as we transition to our recently awarded
contracts."
New Contract Awards and Marketing Rights
As previously disclosed, the Company secured $713 million in new contract awards in the first
quarter, including two-year contract extensions for the Ocean
BlackLion and Ocean BlackHornet in the U.S. Gulf of Mexico at leading-edge dayrates as
well as additional plug and abandonment ("P&A") work for the
Ocean Patriot, which is currently underway.
In addition, after quarter-end, the Company signed an estimated
30-day, one-well contract for the Ocean BlackRhino,
representing approximately $18
million in total contract value that will be pre-paid prior
to commencement. The work is scheduled to begin immediately
after the rig's Special Periodical Survey and Managed Pressure
Drilling upgrade later this year.
Further, the Company has recently
secured the marketing rights for three
7th generation drillships. The Company entered into
an agreement with the owner of the West
Dorado and West Draco to market the rigs in
Brazil, Latin America, West
Africa, Malaysia, and
Indonesia. In addition, the Company agreed with the owner of
the former West Libra, now known as the Tidal
Action, to market the rig in the U.S. Gulf of Mexico.
Financial Results
Revenue for the first quarter of 2024 totaled $275 million compared to $298 million in the fourth quarter of 2023. The
decrease in revenue quarter-over-quarter was primarily driven by
the reduction in revenue for the Ocean GreatWhite following
its equipment incident in the first quarter and the West
Auriga's return to the rig owner at the end of February upon
expiration of the rig's charter. The decrease in revenue was
partially offset by a full quarter of revenue for the Ocean
BlackHawk and Ocean Courage at higher dayrates after
completion of shipyard upgrades and contract preparation work in
the fourth quarter of 2023.
Contract drilling expense for the first quarter of 2024 was
$184 million, a $5 million decrease from the prior quarter. The
decrease in contract drilling expense was primarily due to lower
charter and other operating expenses attributable to the two
managed rigs and the absence of the well control equipment
efficiency bonus accrued in the fourth quarter of 2023. The
reduction in expense was partially offset by incremental contract
drilling expense for the Ocean Courage and Ocean
BlackHawk, both of which operated for the entire first quarter
of 2024, and the recording of $7.6
million in insurance deductible associated with the Ocean
GreatWhite's equipment incident.
General and administrative expenses were flat at $19 million for both the first quarter of 2024
and the fourth quarter of 2023.
For the first quarter of 2024, the Company recognized a net tax
benefit of $3.2 million compared to
tax expense of $174 million for the
fourth quarter of 2023. The benefit in 2024 is inclusive of a
$12.2 million tax benefit on the
remeasurement of uncertain tax positions due to the movement in
foreign currency exchange rates. The expense in the fourth quarter
of 2023 reflected the reversal of a previously recorded tax benefit
earlier in 2023.
Operational Highlights
The Company's rigs continued to perform well, with six rigs
achieving revenue efficiency of over 96% for the first quarter,
with overall revenue efficiency for the quarter of 94% excluding
the Ocean GreatWhite incident. The Ocean Courage and
Ocean BlackHawk operated for the full quarter under new
contracts, and the Ocean Patriot completed its campaign with
Repsol and began its two-well P&A contract with Serica. The
Ocean GreatWhite safely recovered the LMRP from the seabed
and arrived in the Kishorn port on March
15 for repairs. The repairs are progressing well, and the
rig is currently scheduled to be back on the well location in the
first half of June, in-line with prior estimates.
Wolford concluded, "Looking ahead, we are focused on the
Ocean GreatWhite returning to work safely, securing
additional backlog for our rigs, and delivering operational
excellence across the fleet to maximize our cash flow
generation."
CONFERENCE CALL
A conference call to discuss Diamond Offshore's earnings results
and an update on operations has been scheduled for 8:00 a.m. CDT on Wednesday, May 8, 2024. A
live webcast of the call will be available online on the Company's
website at 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 www.diamondoffshore.com.
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. Such statements
may include, but are not limited to, statements concerning future
contract effectiveness and estimated duration; expectations
regarding rig downtime, reactivation, upgrades and capital
expenditures, equipment recovery and repair cost and efforts,
insurance claims and recoveries, surveys, retirements,
availability, utilization, scrapping, impairments, backlog and
revenue expected to result from backlog, future revenue, operating
costs and performance; future liquidity and financial condition,
market conditions, commodity prices and strategic opportunities;
contract noncompliance by customers and other third parties;
outcomes of customer discussions; future impact of regulations; and
other statements that are not of historical fact. 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 currently 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 the Company's reports filed
with the Securities and Exchange Commission, and investors and
analysts 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, level
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
and equipment recovery risks, litigation and disputes, permits and
approvals for drilling operations, 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 such
statement, 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. In addition, information contained in this press release
is as of the date of this release. There can be no assurance as to
future developments, as future events could differ materially from
those anticipated. Forward-looking statements are not guarantees of
future performance or developments and involve known and unknown
risks, uncertainties and other important factors beyond the
Company's control that could cause the Company's actual results,
performance or achievements to differ materially from any future
results, performance or achievements expressed or implied by such
statements.
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2024
|
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
Contract
drilling
|
|
$
|
258,770
|
|
|
$
|
279,681
|
|
Revenues related to
reimbursable expenses
|
|
|
15,840
|
|
|
|
17,956
|
|
Total
revenues
|
|
|
274,610
|
|
|
|
297,637
|
|
Operating
expenses:
|
|
|
|
|
|
|
Contract drilling,
excluding depreciation
|
|
|
184,205
|
|
|
|
188,803
|
|
Reimbursable
expenses
|
|
|
15,266
|
|
|
|
17,304
|
|
Depreciation
|
|
|
31,354
|
|
|
|
27,705
|
|
General and
administrative
|
|
|
18,576
|
|
|
|
19,190
|
|
Loss (gain) on
disposition of assets
|
|
|
3,396
|
|
|
|
(280)
|
|
Total operating
expenses
|
|
|
252,797
|
|
|
|
252,722
|
|
Operating
income
|
|
|
21,813
|
|
|
|
44,915
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest
income
|
|
|
1,774
|
|
|
|
1,464
|
|
Interest
expense
|
|
|
(15,346)
|
|
|
|
(14,847)
|
|
Foreign currency
transaction gain (loss)
|
|
|
231
|
|
|
|
(2,863)
|
|
Other, net
|
|
|
(71)
|
|
|
|
(54)
|
|
Income before income
tax expense
|
|
|
8,401
|
|
|
|
28,615
|
|
Income tax benefit
(expense)
|
|
|
3,211
|
|
|
|
(174,317)
|
|
Net Income
(loss)
|
|
$
|
11,612
|
|
|
$
|
(145,702)
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
Basic and
Diluted
|
|
$
|
0.11
|
|
|
$
|
(1.42)
|
|
Weighted-average
shares outstanding, Basic
|
|
|
102,440
|
|
|
|
102,322
|
|
Weighted-average
shares outstanding, Diluted
|
|
|
104,740
|
|
|
|
102,322
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December
31,
|
|
|
|
2024
|
|
|
2023
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
162,409
|
|
|
$
|
124,457
|
|
Restricted
cash
|
|
|
6,832
|
|
|
|
14,231
|
|
Accounts receivable,
net of allowance for credit losses
|
|
|
219,923
|
|
|
|
254,323
|
|
Prepaid expenses and
other current assets
|
|
|
57,402
|
|
|
|
63,412
|
|
Asset held for
sale
|
|
|
1,000
|
|
|
|
1,000
|
|
Total current
assets
|
|
|
447,566
|
|
|
|
457,423
|
|
Drilling and other
property and equipment, net of
|
|
|
|
|
|
|
accumulated
depreciation
|
|
|
1,153,040
|
|
|
|
1,156,368
|
|
Other assets
|
|
|
89,488
|
|
|
|
98,762
|
|
Total
assets
|
|
$
|
1,690,094
|
|
|
$
|
1,712,553
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Other current
liabilities
|
|
$
|
275,344
|
|
|
$
|
296,150
|
|
Long-term
debt
|
|
|
534,009
|
|
|
|
533,514
|
|
Noncurrent finance
lease liabilities
|
|
|
108,537
|
|
|
|
113,201
|
|
Deferred tax
liability
|
|
|
15,472
|
|
|
|
10,966
|
|
Other
liabilities
|
|
|
97,421
|
|
|
|
113,871
|
|
Stockholders'
equity
|
|
|
659,311
|
|
|
|
644,851
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,690,094
|
|
|
$
|
1,712,553
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2024
|
|
Operating
activities:
|
|
|
|
Net income
|
|
$
|
11,612
|
|
Adjustments to
reconcile net income to net cash used in
operating activities:
|
|
|
|
Depreciation
|
|
|
31,354
|
|
Loss on disposition of
assets
|
|
|
3,396
|
|
Deferred tax provision
and other non-cash income taxes
|
|
|
(7,525)
|
|
Stock-based
compensation expense
|
|
|
3,590
|
|
Contract liabilities,
net
|
|
|
4,865
|
|
Contract assets,
net
|
|
|
10
|
|
Deferred contract
costs, net
|
|
|
5,867
|
|
Other assets,
noncurrent
|
|
|
860
|
|
Other liabilities,
noncurrent
|
|
|
(874)
|
|
Other
|
|
|
963
|
|
Net changes in
operating working capital
|
|
|
4,900
|
|
Net cash provided by
operating activities
|
|
|
59,018
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
|
|
(27,935)
|
|
Proceeds from
disposition of assets, net of disposal costs
|
|
|
3,805
|
|
Net cash used in
investing activities
|
|
|
(24,130)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
Principal payments of
finance lease liabilities
|
|
|
(4,335)
|
|
Net cash used in
financing activities
|
|
|
(4,335)
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
|
|
30,553
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
138,688
|
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
169,241
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
AVERAGE DAYRATE,
UTILIZATION AND REVENUE EFFICIENCY
|
(Dayrate in
thousands)
|
|
TOTAL
FLEET
|
First
Quarter
|
Fourth
Quarter
|
2024
|
2023
|
Average Dayrate
(1)
|
Utilization
(2)
|
Revenue
Efficiency
(3)
|
Average Dayrate
(1)
|
Utilization
(2)
|
Revenue
Efficiency
(3)
|
|
|
|
|
|
|
$
|
305
|
68 %
|
88.7 %
|
$
|
316
|
69 %
|
94.9 %
|
(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,
depreciation and amortization and uninsured costs for repairs to
the Ocean GreatWhite, which we consider to be outside the
normal course of our operations (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.
Reconciliation of
Income Before Income Tax Expense to Adjusted EBITDA:
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
As reported income
before income tax expense
|
|
$
|
8,401
|
|
|
$
|
28,615
|
|
|
Interest
expense
|
|
|
15,346
|
|
|
|
14,847
|
|
|
Interest
income
|
|
|
(1,774)
|
|
|
|
(1,464)
|
|
|
Foreign currency
transaction (gain) loss
|
|
|
(231)
|
|
|
|
2,863
|
|
|
Depreciation
|
|
|
31,354
|
|
|
|
27,705
|
|
|
Loss (gain) on
disposition of assets
|
|
|
3,396
|
|
|
|
(280)
|
|
|
Other, net
|
|
|
71
|
|
|
|
54
|
|
|
Insurance deductible
included in contract drilling expense
|
|
|
7,600
|
|
|
|
—
|
|
Adjusted EBITDA
(1)
|
|
$
|
64,163
|
|
|
$
|
72,340
|
|
(1)
|
Adjusted to exclude the
$10.0 million insurance deductible associated with a claim for the
Ocean
GreatWhite, of
which $2.4 million and $7.6 million were recorded as loss on
disposition of assets
and contract drilling
expense, respectively, in the first three months of
2024.
|
Reconciliation of As
Reported Operating Income to Adjusted Operating
Income:
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2024
|
|
|
2023
|
|
As reported
operating income
|
|
$
|
21,813
|
|
|
$
|
44,915
|
|
|
|
|
|
|
|
|
Insurance
deductible
|
|
|
10,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted operating
income
|
|
$
|
31,813
|
|
|
$
|
44,915
|
|
Reconciliation of As
Reported Net Income (Loss) to Adjusted Net Income
(Loss):
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2024
|
|
|
2023
|
|
As reported net
income (loss)
|
|
$
|
11,612
|
|
|
$
|
(145,702)
|
|
Insurance
deductible
|
|
|
10,000
|
|
|
|
—
|
|
Tax effect:
|
|
|
|
|
|
|
Insurance
deductible
|
|
|
3,822
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)
|
|
$
|
25,434
|
|
|
$
|
(145,702)
|
|
Reconciliation of As
Reported Income (Loss) per Diluted Share to Adjusted
Income
(Loss) per Diluted
Share:
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2024
|
|
|
2023
|
|
As reported income
(loss) per diluted share
|
$
|
0.11
|
|
|
$
|
(1.42)
|
|
Insurance
deductible
|
|
|
0.10
|
|
|
|
—
|
|
Tax effect:
|
|
|
|
|
|
|
Insurance
deductible
|
|
|
0.04
|
|
|
|
—
|
|
Adjusted income
(loss) per diluted share
|
$
|
0.25
|
|
|
$
|
(1.42)
|
|
Contact:
Kevin Bordosky
Senior Director, Investor Relations
(281) 647-4035
View original content to download
multimedia:https://www.prnewswire.com/news-releases/diamond-offshore-reports-first-quarter-2024-results-302138795.html
SOURCE Diamond Offshore Drilling, Inc.