Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the second quarter of 2007 of $251.9 million, or $1.81 per share on a diluted basis, compared with net income of $175.7 million, or $1.27 per share on a diluted basis, in the same period a year earlier. Revenue for the second quarter of 2007 was $648.9 million, compared with revenue of $512.2 million for the second quarter of 2006.
For the six months ended June 30, 2007, the Company reported net income of $476.1 million, or $3.46 per share on a diluted basis, compared with net income of $321.0 million, or $2.33 per share on a diluted basis, for the same period in 2006. Revenue for the six months ended June 30, 2007 was $1.3 billion, compared to $959.9 million for the first six months of 2006.
The international markets for Diamond Offshore’s floater and jack-up equipment remained strong during the second quarter of 2007. As a result, four of our semisubmersibles received commitments that will occupy the units into the early part of the next decade, and one of the Company’s jack-up rigs also received a new term commitment. Among the recent highlights:
- In late July, the Ocean Rover received a Letter of Award for a two-year commitment in Malaysia that is expected to extend that unit’s work in the country until the first quarter of 2011.
- The Ocean Patriot and the Ocean Epoch each received new contracts that are expected to extend their operation in Australia at least until mid-2010.
- The Ocean Concord received notification of award for a five-year contract in Brazil that is expected to commence in the fourth quarter of 2007 and occupy the rig until late 2012. The Concord is currently operating in the U.S. Gulf of Mexico (GOM).
- In the jack-up market, another of our GOM jack-up rigs moved to the international market. The Ocean King, departed for Croatia in early July, where, following a scheduled inspection and maintenance, the unit will commence a two-year bareboat charter that is expected to extend until the fourth quarter of 2009.
- Following a two-year upgrade and commissioning, the 10,000-ft. water-depth capable semisubmersible Ocean Endeavor commenced operating under a four-year contract in the GOM.
Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. Additional information on Diamond Offshore Drilling, Inc. and access to the Company’s SEC filings is available on the Internet at www.diamondoffshore.com.
As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its second quarter 2007 earnings release conference call. The live broadcast of the Diamond Offshore quarterly conference call will be available online at www.diamondoffshore.com on July 26, 2007, beginning at 9:00 a.m. Central Daylight Time. The online replay will follow immediately and continue for the remainder of the third calendar quarter after the original call. Please go to the web site at least 15 minutes before the broadcast to register, download and install any necessary audio software.
Statements in this press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, statements concerning existing contracts, commitments and backlog, fleet enhancements, access to new markets, future earnings, future cash flows, market conditions, future market improvements, future growth in demand for equipment types or in any region and future contracts. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated or projected, including, among others, the risk that a commitment, Letter of Award or Letter of Intent will not be converted to a contract, the risk that full rig utilization may not be achieved during a contract period, the risk that the fleet’s available days may be reduced by unscheduled downtime, the risk that these and other factors outside of the Company’s control may adversely impact the amount of profit realized from a contract, the risk that the markets for the Company’s services will not continue to improve, the risk that the Company’s market position may deteriorate, or the risk that the Company may not be able to participate fully in any future market improvements. A discussion of additional risk factors that could impact these areas and the Company’s overall business and financial performance can be found in the Company's reports and other filings with the Securities and Exchange Commission. These factors include, among others, general economic and business conditions, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company’s control. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Revenues related to reimbursable expenses||12,948||13,798||31,220||26,875|
|General and administrative||12,174||9,886||24,140||19,827|
|(Gain) loss on disposition of assets||(3,553)||2,696||(5,055)||2,463|
|Total operating expenses||301,258||274,093||597,500||518,880|
|Other income (expense):|
|Loss on sale of marketable securities||(5)||(8)||(8)||(202)|
|Income before income tax expense||352,453||242,167||662,723||448,858|
|Income tax expense||(100,526)||(66,446)||(186,646)||(127,816)|
|Income per share:|
|Weighted-average shares outstanding:|
|Shares of common stock||138,447||129,131||136,875||129,079|
|Dilutive potential shares of common stock||481||9,651||2,004||9,678|
|Total weighted average shares outstanding||138,928||138,782||138,879||138,757|
|DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES|
|RESULTS OF OPERATIONS|
|Three Months Ended|
|High Specification Floaters||$||264,027||$||189,003|
|Total Contract Drilling Revenue||$||635,927||$||498,390|
|Revenues Related to Reimbursable Expenses||$||12,948||$||13,798|
|CONTRACT DRILLING EXPENSE|
|High Specification Floaters||$||70,325||$||62,051|
|Total Contract Drilling Expense||$||223,731||$||200,182|
|High Specification Floaters||$||193,702||$||126,952|
|Reimbursable expenses, net||2,377||1,988|
|General and administrative expense||(12,174||)||(9,886||)|
|Gain (loss) on disposition of assets||3,553||(2,696||)|
|Total Operating Income||$||347,617||$||238,095|
|DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|June 30,||December 31,|
|Cash and cash equivalents||$||616,737||$||524,698|
|Rig spare parts and supplies||50,638||48,801|
|Prepaid expenses and other||58,489||39,415|
|Total current assets||1,232,702||1,481,547|
|Drilling and other property and equipment, net of accumulated depreciation|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Deferred tax liability||403,290||448,227|
|Cumulative effect of FIN 48 adoption||(28,422||)||--|
|Other stockholder’s equity||2,731,867||2,319,508|
|Total stockholders’ equity||2,703,445||2,319,508|
|Total liabilities and stockholders’ equity||$||3,964,828||$||4,132,839|
|Second Quarter||First Quarter||Second Quarter|
|(Dayrate in thousands)|
|High Specification Floaters||$307||86%||$280||98%||$219||94%|
Les Van Dyke, 281-492-5370
Director, Investor Relations