Diamond Offshore’s 4Q Impacted by High Downtime
Diamond Offshore Drilling, Inc. today reported net income for the fourth quarter of 2011 of $188 million, or $1.36 per share on a diluted basis, compared with net income of $242 million, or $1.74 per share on a diluted basis, in the same period a year earlier. Revenues in the fourth quarter of 2011 were $748 million, compared with revenues of $841 million in the prior year fourth quarter.
For the year ended December 31, 2011, the Company reported net income of $963 million, or $6.92 per share on a diluted basis, compared with net income of $955 million, or $6.87 per share on a diluted basis, for the year ended December 31, 2010. Revenues for the year ended December 31, 2011 were $3,322 million, compared with $3,323 million for 2010.
Results for the fourth quarter of 2011 were positively impacted by lower tax expense partially resulting from the reduction of the Company’s liability for uncertain tax positions. This adjustment, along with current year foreign tax expense adjustments, resulted in a fourth quarter effective tax rate of 7.4% and a full year 2011 effective tax rate of 18.4%.
Full year 2011 results benefited from reduced unanticipated equipment downtime, which was lower than the historical average. Results for the fourth quarter, however, were negatively impacted by a higher number of downtime days than in the preceding three quarters, attributable to scheduled rig maintenance and survey downtime.
Since the end of the third quarter, Diamond has received contract awards and extensions that when performed are expected to generate maximum total revenue of approximately $1.2 billion, or approximately 11 rig years of work. These contract awards and extensions have brought the current expected revenue backlog to approximately $8.4 billion.
“The $1.2 billion of revenue backlog we were able to add since the end of the last quarter demonstrates the strong demand in all of our key markets,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. “Our newbuild drillships, the Ocean BlackHawk and Ocean BlackHornet, have long-term contracts beginning in Q4 2013 and Q2 2014. Additionally, given the strong current environment, we think significant opportunity exists for our third newbuild drillship, the Ocean BlackRhino, as well as for deepwater units such as our recently announced Ocean Onyx.
Offshore Energy Today Staff, February 2, 2012; Image: Diamond Offshore