Ensco plc Announces Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2015; Provides Earnings Guidance for the Third Quarter and Remainder of the Year 2015 and Years 2015, 2016 and 2017
Jul 29 15
Ensco plc announced unaudited consolidated earnings results for the second quarter and six months ended June 30, 2015. For the quarter, the company reported operating revenues of $1,059.0 million against $1,136.6 million a year ago, primarily due to a year-over-year decline in reported utilization to 76% from 84% a year ago. Operating income was $386.2 million against operating loss of $277.8 million a year ago. Income from continuing operations before income taxes was $330.8 million against loss from continuing operations before income taxes of $308.6 million a year ago. Income from continuing operations was $272.8 million or $1.15 basic and diluted per share against loss from continuing operations of $351.2 million or $1.53 basic and diluted per share a year ago. Net income attributable to the company was $260.3 million or $1.11 basic and diluted per share against net loss attributable to the company of $1,172.7 million or $5.07 basic and diluted per share a year ago.
For the six months, the company reported operating revenues of $2,222.9 million against $2,203.3 million a year ago. Operating income was $864.6 million against $99.5 million a year ago. Income from continuing operations before income taxes was $736.6 million against $39.6 million a year ago. Income from continuing operations was $600.9 million or $2.53 basic and diluted per share against loss from continuing operations of $52.5 million or $0.27 basic and diluted per share a year ago. Net income attributable to the company was $585.0 million or $2.49 basic and diluted per share against net loss attributable to the company of $880.2 million or $3.82 basic and diluted per share a year ago. Net cash provided by operating activities of continuing operations was $891.0 million against $962.9 million a year ago. Additions to property and equipment were $913.9 million against $629.7 million a year ago.
The company provided earnings guidance for the third quarter and remainder of the year 2015 and years 2015, 2016 and 2017. For the year 2015, its capital expenditures will peak in 2015 at approximately $1.7 billion. Beyond 2015, the company anticipates total CapEx will be significantly reduced from this level to less than $750 million a year in 2016 and 2017 as it completes its newbuilds on the construction. Beyond 2015, newbuild CapEx is estimated to be approximately $800 million, with $450 million expected to occur in 2016 and the remaining $350 million in 2017 as the final milestone payment is made for ENSCO DS-10. The provisions of the DS-9 contract, which require payments in monthly installments beginning the month after termination notice, mean that cash flows for this rig will begin during the third quarter. Therefore, there will be no negative impact on earnings for 2015, 2016 and the first half of 2017.
The company expects third quarter depreciation expense is expected to increase approximately $3 million from second quarter levels to $144 million, as ENSCO 110 operates for a full fourth quarter. The third quarter tax rate is expected to be approximately 12%.
For the remainder of the year, the company anticipates CapEx to be approximately $800 million.
ConocoPhillips Provides Update on ENSCO DS-9 Drillship Contract with Ensco plc
Jul 16 15
Effective from July 16, 2015, ConocoPhillips for its convenience provided a notice of termination for the three-year ENSCO DS-9 drillship contract. Under the terms of the contract, ConocoPhillips is obligated to pay Ensco termination fees monthly for two years equal to the operating day rate of approximately $550,000, which may be partially defrayed should Ensco re-contract the rig within the next two years and/or mitigate certain costs during this time period while the rig is idle and without a contract. ConocoPhillips is also contractually obligated to reimburse certain costs that Ensco incurs due to the termination of the contract for ConocoPhillips convenience. Given these contract terms, Ensco does not anticipate a material negative impact to its financial results for 2015 and 2016 as a result of this termination. ENSCO DS-9 was recently delivered and had been scheduled to commence its initial drilling contract for ConocoPhillips in the fourth quarter of this year.
Ensco plc Announces Retirement of Jay Swent as EVP & CFO
Jul 14 15
Ensco plc announced that EVP & CFO Jay Swent will be retiring after more than 11 years of service. Mr. Swent will continue to serve in his current role until the succession process has been completed and a new CFO has been named. The completion of the succession process may extend into the first half of next year.