Northern Offshore 1Q Profit at $1.1 Mln

Northern Offshore,  a Bermuda-registered company providing drilling units to the international oil and gas industry, has reported net income for the three months ended March 31, 2013 of $1.1 million, or $0.01 per diluted share, on revenues of $41.4 million. 

The company generated $9.8 million of first quarter EBITDA. The positive net cash balance stands at $18 million. The company’s directors have declared a dividend of $0.05 per share, or approximately $8.2 million.

Gary W. Casswell, Northern Offshore’s president and CEO, commented, “Earnings for the quarter were slightly less than we expected because of approximately 20 days of downtime for the Energy Driller due to unscheduled maintenance on one of the pontoons. We are also expecting a flat second quarter due primarily to a transition of the Energy Endeavour back to operations in the UK and the Energy Searcher remaining idle. However, we still anticipate positive cash flow for the next quarter, as well as the second half of 2013, and expect to maintain the dividend distributions.” 

First Quarter Analysis 

Net income for the three months ended March 31, 2013 of $1.1 million, or $0.01 per diluted share, on revenues of $41.4 million compares to a net loss of $14.1 million, or $0.09 per diluted share, for the first quarter of 2012, on revenues of $28.2 million. Revenues for the three months ending March 31, 2013 were $13.2 million higher than the same period in 2012, primarily due to higher utilization of the semisubmersible Energy Driller and jackup Energy Enhancer, and higher dayrates for the jackup Energy Endeavour.

Partially offsetting these increases was a decrease in dayrate revenues for the drillship Energy Searcher due to lower utilization as compared to the same period last year. Tariff revenues from the floating production facility Northern Producer averaged approximately $110,000 per day in the first quarter of 2013. The company expects pricing levels to remain stable and production to decline slightly in the near term. Drilling and production expenses for the three months ending March 31, 2013 were $5.1 million lower as compared to the same period in 2012, primarily due  to a decrease in operating expenses for the jackup Energy Exerter, as the rig was sold in October 2012. This disposition also accounted for most of the $1.5 million decrease in depreciation expense for the current quarter as compared to the first quarter of the prior year. First quarter 2013 general and administrative expenses, interest expense, amortization of financing fees and other financial items were comparable to those of the same period in 2012. As of May 14, 2013, the company had an outstanding credit facility balance of $22 million and a cash balance of approximately $40 million. The company’s directors have declared a dividend of $0.05 per share, or approximately $8.2 million. Shareholders of record with the VPS on May 31, 2013 will be entitled to receive the dividend, which will be paid on or around June 14, 2013. The shares of the  company will be trading ex-dividend from May 29, 2013.