- $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
HOUSTON, Feb. 27, 2024 /PRNewswire/ -- Diamond Offshore
Drilling, Inc. (NYSE: DO) today reported the following results for
the fourth quarter of 2023:
|
Three Months
Ended
|
|
Thousands of
dollars, except per share data
|
December 31,
2023
|
|
|
September 30,
2023
|
|
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)
|
|
Bernie Wolford, Jr., President
and Chief Executive Officer, stated, "2023 was a transformational
year for Diamond Offshore. We marked our one-year anniversary of
re-listing on the New York Stock Exchange, made measurable
improvements in our capital structure, secured $485 million dollars in new contract awards
throughout the year, safely completed Special Periodical Surveys on
five rigs, and completed eight contract start-ups, including four
contract commencements in the fourth quarter, one in each of the
regions in which we operate. In the first quarter of 2024, as
previously announced, we secured a two-year contract extension for
the Ocean BlackLion in the Gulf of
Mexico at a leading edge dayrate and secured additional
P&A work for the Ocean Patriot to fill a portion of the
gap prior to commencement of a long-term P&A campaign in
2025.
The recent $362 million in
contract awards are in addition to our reported backlog of
$1.4 billion as of January 1, which will result in notable average
dayrate improvement as we transition to new contracts."
Revenue for the fourth quarter totaled $298 million compared to $245 million in the third quarter of 2023. The
increase in revenue quarter-over-quarter was primarily driven by
the Ocean BlackHawk's contract commencement in the
Gulf of Mexico in the fourth
quarter after completion of an MPD installation, Special Periodical
Survey and contract preparation work and new contract commencements
for the Ocean Patriot and Ocean Apex, partially
offset by lower revenue for the Ocean Courage due to
contract preparation activities related to its new multi-year
contract in Brazil.
Contract drilling expense for the fourth quarter was
$189 million, or a $7 million increase from the prior quarter,
largely due to higher charter rental costs associated with the
managed rigs and the annual bonus expense related to the
drillships' BOP service agreement. The increase in expense was
partially offset by the deferral of certain costs associated with
contract preparation activities for the Ocean Courage, as
the Company continued to prepare the rig for a new contract that
commenced during the quarter, and the absence of costs associated
with the Ocean Apex shipyard project in the third
quarter.
General and administrative expenses were $19 million in the fourth quarter, or a
$3 million increase compared to the
prior quarter, primarily due to an adjustment in accrued expenses
associated with the Company's incentive compensation plan.
Tax expense for the fourth quarter was $174 million as compared to a $125 million expense in the prior quarter. The
non-cash tax expense in the fourth quarter reflected the expected
continued normalization of the Company's tax expense and the
reversal of the tax benefit recorded earlier in 2023.
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 Ocean BlackHawk and Ocean Courage
completed contract preparation activities in the fourth quarter and
are now operating under new contracts in the Gulf of Mexico and offshore Brazil, respectively. Additionally, in the
fourth quarter, the Company earned an additional bonus for
efficient, injury-free operations in Senegal.
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 8:00 a.m. CDT on Wednesday, February 28,
2024. A live webcast of the call will be available online on
the Company's website 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. 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 Russia's invasion of Ukraine and related sanctions. 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 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 Item 1A "Risk Factors" in the Company's
most recent annual report on Form 10-K and the Company's other
reports filed with the Securities and Exchange Commission, and
readers of this press release 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,
levels 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 risks, litigation and disputes, permits and
approvals for drilling operations, the COVID-19 pandemic and
related disruptions to the global economy, 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 this press
release, 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.
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
2023
|
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
Contract
drilling
|
|
$
|
279,681
|
|
|
$
|
224,929
|
|
Revenues related to
reimbursable expenses
|
|
|
17,956
|
|
|
|
20,029
|
|
Total
revenues
|
|
|
297,637
|
|
|
|
244,958
|
|
Operating
expenses:
|
|
|
|
|
|
|
Contract drilling,
excluding depreciation
|
|
|
188,803
|
|
|
|
181,954
|
|
Reimbursable
expenses
|
|
|
17,304
|
|
|
|
18,662
|
|
Depreciation
|
|
|
27,705
|
|
|
|
27,785
|
|
General and
administrative
|
|
|
19,190
|
|
|
|
16,649
|
|
Gain on disposition of
assets
|
|
|
(280)
|
|
|
|
(955)
|
|
Total operating
expenses
|
|
|
252,722
|
|
|
|
244,095
|
|
Operating
income
|
|
|
44,915
|
|
|
|
863
|
|
Other income
(expense):
|
|
|
|
|
|
|
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)
|
|
Other, net
|
|
|
(54)
|
|
|
|
(485)
|
|
Income (loss) before
income tax expense
|
|
|
28,615
|
|
|
|
(19,580)
|
|
Income tax
expense
|
|
|
(174,317)
|
|
|
|
(125,436)
|
|
Net
loss
|
|
$
|
(145,702)
|
|
|
$
|
(145,016)
|
|
Loss per
share:
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.42)
|
|
|
$
|
(1.42)
|
|
Diluted
|
|
$
|
(1.42)
|
|
|
$
|
(1.42)
|
|
Weighted-average
shares outstanding, Basic
|
|
|
102,322
|
|
|
|
102,215
|
|
Weighted-average
shares outstanding, Diluted
|
|
|
102,322
|
|
|
|
102,215
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
124,457
|
|
|
$
|
63,041
|
|
Restricted
cash
|
|
|
14,231
|
|
|
|
34,293
|
|
Accounts receivable,
net of allowance for credit losses
|
|
|
254,323
|
|
|
|
172,053
|
|
Prepaid expenses and
other current assets
|
|
|
63,412
|
|
|
|
48,695
|
|
Asset held for
sale
|
|
|
1,000
|
|
|
|
—
|
|
Total current
assets
|
|
|
457,423
|
|
|
|
318,082
|
|
Drilling and other
property and equipment, net of
|
|
|
|
|
|
|
accumulated
depreciation
|
|
|
1,156,368
|
|
|
|
1,141,908
|
|
Other assets
|
|
|
98,762
|
|
|
|
67,966
|
|
Total
assets
|
|
$
|
1,712,553
|
|
|
$
|
1,527,956
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Other current
liabilities
|
|
$
|
296,150
|
|
|
$
|
261,661
|
|
Long-term
debt
|
|
|
533,514
|
|
|
|
360,644
|
|
Noncurrent finance
lease liabilities
|
|
|
113,201
|
|
|
|
131,393
|
|
Deferred tax
liability
|
|
|
10,966
|
|
|
|
700
|
|
Other
liabilities
|
|
|
113,871
|
|
|
|
93,888
|
|
Stockholders'
equity
|
|
|
644,851
|
|
|
|
679,670
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,712,553
|
|
|
$
|
1,527,956
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
|
|
2023
|
|
Operating
activities:
|
|
|
|
Net loss
|
|
$
|
(44,706)
|
|
Adjustments to
reconcile net loss to net cash used in
operating activities:
|
|
|
|
Depreciation
|
|
|
111,301
|
|
Gain on disposition of
assets
|
|
|
(4,382)
|
|
Loss on extinguishment
of long-term debt
|
|
|
6,529
|
|
Deferred tax
provision
|
|
|
(4,617)
|
|
Stock-based
compensation expense
|
|
|
14,103
|
|
Contract liabilities,
net
|
|
|
4,580
|
|
Contract assets,
net
|
|
|
(2,434)
|
|
Deferred contract
costs, net
|
|
|
(12,099)
|
|
Collateral
deposits
|
|
|
(11,857)
|
|
Other assets,
noncurrent
|
|
|
1,254
|
|
Other liabilities,
noncurrent
|
|
|
(709)
|
|
Other
|
|
|
2,900
|
|
Net changes in
operating working capital
|
|
|
(48,083)
|
|
Net cash provided by
operating activities
|
|
|
11,780
|
|
|
|
|
|
Investing
activities:
|
|
|
|
Capital
expenditures
|
|
|
(131,449)
|
|
Proceeds from
disposition of assets, net of disposal costs
|
|
|
11,105
|
|
Deposits on asset
sales
|
|
|
307
|
|
Net cash used in
investing activities
|
|
|
(120,037)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
Proceeds from issuance
of second lien notes
|
|
|
550,000
|
|
Borrowings under credit
facility
|
|
|
40,000
|
|
Extinguishment of
long-term debt
|
|
|
(192,182)
|
|
Repayments on exit
facilities
|
|
|
(214,000)
|
|
Debt issuance costs and
arrangement fees
|
|
|
(17,242)
|
|
Principal payments of
finance lease liabilities
|
|
|
(16,965)
|
|
Net cash provided by
financing activities
|
|
|
149,611
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
|
|
41,354
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
97,334
|
|
Cash, cash equivalents
and restricted cash, end of period
|
|
$
|
138,688
|
|
DIAMOND OFFSHORE
DRILLING, INC. AND SUBSIDIARIES
|
AVERAGE DAYRATE,
UTILIZATION AND OPERATIONAL EFFICIENCY
|
(Dayrate in
thousands)
|
|
|
|
|
|
|
|
|
TOTAL
FLEET
|
Fourth
Quarter
|
Third
Quarter
|
2023
|
2023
|
Average Dayrate
(1)
|
|
Utilization
(2)
|
Revenue
Efficiency
(3)
|
Average Dayrate
(1)
|
|
Utilization
(2)
|
Revenue
Efficiency
(3)
|
|
|
|
|
|
|
|
|
$
|
316
|
|
69 %
|
94.9 %
|
$
|
307
|
|
57 %
|
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 loss on extinguishment of debt
(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 (Loss) Before Income Tax Expense to Adjusted
EBITDA:
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
|
2023
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
Other, net
|
|
|
54
|
|
|
|
485
|
|
Adjusted
EBITDA
|
|
$
|
72,340
|
|
|
$
|
27,693
|
|
Reconciliation of As
Reported Net Loss to Adjusted Net Loss:
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
|
2023
|
|
|
2023
|
|
As reported net
loss
|
|
$
|
(145,702)
|
|
|
$
|
(145,016)
|
|
Loss on extinguishment
of long-term debt
|
|
|
—
|
|
|
|
6,529
|
|
Tax effect:
|
|
|
|
|
|
|
|
Loss on extinguishment
of long-term debt
|
|
|
—
|
|
|
|
(305)
|
|
|
|
|
|
|
|
|
|
Adjusted net
loss
|
|
$
|
(145,702)
|
|
|
$
|
(138,792)
|
|
Reconciliation of As
Reported Loss per Diluted Share to Adjusted Loss per Diluted
Share:
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
December
31,
|
|
|
September
30,
|
|
|
|
2023
|
|
|
2022
|
|
As reported loss per
diluted share
|
$
|
(1.42)
|
|
|
$
|
(1.42)
|
|
Loss on extinguishment
of long-term debt
|
|
|
—
|
|
|
|
0.06
|
|
Tax effect:
|
|
|
|
|
|
|
Loss on extinguishment
of long-term debt
|
|
|
—
|
|
|
|
—
|
|
Adjusted loss per
diluted share
|
$
|
(1.42)
|
|
|
$
|
(1.36)
|
|
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-fourth-quarter-2023-results-302073557.html
SOURCE Diamond Offshore Drilling, Inc.