Diamond Offshore Drilling, Inc. Enters into Commitment Increase and Extension Agreement
Oct 24 14
On October 22, 2014, Diamond Offshore Drilling, Inc. entered into a commitment increase and extension agreement and amendment No. 3 to credit agreement among the company, as borrower, Wells Fargo Bank, National Association as administrative agent and swingline lender, the issuing banks named therein and the lenders named therein, that amended the 5-year revolving credit agreement among the company, as borrower, Wells Fargo, as administrative agent and swingline lender, the issuing banks party thereto and the lenders party thereto. The third amendment, among other things increased the lenders’ aggregate commitment under the Credit Agreement from $1.0 billion to $1.5 billion, provided for an approximately seven-month extension of the maturity date for most of the lenders, provided the company the option, subject to the conditions specified in the credit agreement, to increase the revolving commitments under the credit agreement by up to an additional $500 million from time to time, upon receipt of additional commitments from new or existing lenders; and provided that the company may request up to two additional one-year extensions of the maturity date. As amended by the third amendment, the credit agreement matures on October 22, 2019, except for $40 million of commitments that mature on March 17, 2019.
Diamond Offshore Drilling, Inc. Declares Special and Regular Quarterly Cash Dividend, Payable on December 1, 2014
Oct 23 14
Diamond Offshore Drilling, Inc. announced that the company has declared a special quarterly cash dividend of $0.75 per share of common stock and a regular quarterly cash dividend of $0.125 per share of common stock. Both dividends are payable on December 1, 2014 to shareholders of record on November 5, 2014.
Diamond Offshore Drilling, Inc. Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended September 30, 2014; Reports Impairment of Assets for the Third Quarter of 2014; Provides Financial Guidance for the Fourth Quarter of 2014 and Full Year of 2015
Oct 23 14
Diamond Offshore Drilling, Inc. reported unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2014. For the quarter, the company reported total revenues of $737,682,000 compared to $706,165,000 a year ago. Operating income was $90,416,000 compared to $137,352,000 a year ago. Income before income tax expense was $81,639,000 compared to $131,565,000 a year ago. Net income was $52,645,000 or $0.38 per share compared to $94,748,000 or $0.68 per share a year ago. The impairment write-down associated with retiring 6 mid-water rigs was the main cause for the decline in EPS despite the rising revenues, but I'll address that in a moment. Looking at the revenue increase quarter-over-quarter. The current quarter saw 2 rigs that were previously idled return to work: Ocean Monarch for Total in Southeast Asia and the Ocean Endeavor, which began its 18-month contract with Exxon in the Black Sea. Also adding to the revenues was, first, its newbuild drillship, the Ocean BlackHawk, which worked for a full quarter in the third quarter; and second, the decrease in survey downtime compared to second quarter. These revenue increases were offset by several of its mid-water semis, which contracts ended in Third Quarter and which have not been able to find follow-on work.
For the nine months period, the company reported total revenues of $2,139,350,000 compared to $2,193,924,000 a year ago. Operating income was $410,459,000 compared to $613,937,000 a year ago. Income before income tax expense was $361,921,000 compared to $594,045,000 a year ago. Net income was $288,168,000 or $2.09 per share compared to $456,071,000 or $3.28 per share a year ago.
The company reported impairment of assets of $109,462,000 for the third quarter of 2014 compared to nil a year ago.
The company is forecasting depreciation for the fourth quarter of 2014 to increase to $120 million. This increase is driven by the expected delivery and associated depreciation for the Ocean BlackHornet, Ocean BlackLion and Ocean Apex, along with increased depreciation on the Ocean Winner. Because the Ocean Winner is still under contract with Petrobras until early 2015, it was written down as part of the company's impairment charge this quarter to the discounted future cash flows of the rig, which is now being depreciated over the remaining life of its contract. Interest expense should be in the $15 million to $18 million range in the fourth quarter of 2014. The tax rate for the final quarter of this year is expected to be between 29% and 32%. The company's capital expenditure guidance, again, remains virtually unchanged from last quarter. For the year 2014, the company expects to incur $260 million of maintenance capex and $1.8 billion of newbuild capex for a total of $2.1 billion.
For 2015, the company is still anticipating the capital expenditures to be approximately $80 million, primarily made up of the shipyard completion payment on the BlackLion plus maintenance capex. The company expects that tax rate to fall back into the mid-20s in 2015.