Northern Offshore 4Q profit falls

Northern Offshore, Ltd. today reported net income for the three months ended December 31, 2013, of $5.9 million, or $0.04 per diluted share, on revenues of $46.8 million.

The net income for the three months ended December 31, 2013, of $5.9 million, or $0.04 per diluted share, on revenues of $46.8 million, compared to net income of $13.2 million, or $0.08 per diluted share, for the fourth quarter of 2012, on revenues of $48.8 million. The financial results for the fourth quarter of 2012 included an after-tax gain of $7.5 million attributable to the sale of the jackup Energy Exerter.

The full year ended December 31, 2013, net income of $11.3 million, or $0.07 per diluted share, compares to 2012 net income of $19.2 million, or $0.12 per diluted share. Revenues in 2013 were $174.9 million, as compared to $182.8 million reported in 2012.

Revenues for the three months ended December 31, 2013, were approximately $2.0 million lower than the same period of 2012, primarily as a result of a decrease in tariff revenues from the floating production facility Northern Producer due to lower production as compared to the same period last year, partially offset by an increase in revenue from the jackup Energy Enhancer due to higher average dayrate, as Maersk exercised the first of the three one-year option periods.

The tariff from the floating production facility Northern Producer averaged approximately $100,000 per day in the fourth quarter of 2013. Production for the fourth quarter was lower compared to the prior year quarter primarily due to various maintenance operations at the field and unit level. The company expects pricing levels to remain stable and production volume to normalize in the mid-teens near term.

Drilling and production expenses for the three months ended December 31, 2013, were $3.5 million lower than the same period of last year, primarily due to lower operating expenses for the drillship Energy Searcher, partially offset by higher operating expenses for the jackup Energy Endeavour due to higher labor and repair and maintenance costs, and an increase of expenses for the floating production facility Northern Producer due to higher cleaning and inspection costs.

Fourth quarter 2013 depreciation, 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 February 19, 2014, the company had an outstanding Revolving Credit Facility balance of $22.0 million and a cash balance of $34.8 million, resulting in a net cash position of $12.8 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 February 28, 2014, will be entitled to receive the dividend, which will be paid on or around March 17, 2014. The shares of the company will be trading ex-dividend from February 26, 2014.