SDRL - Seadrill Limited Announces Third Quarter 2014 Results
· The Seadrill Group* on a consolidated basis reports EBITDA of US$842 million, a year over year increase of 27%
· Seadrill Limited reports third quarter 2014 EBITDA* of US$635 million
· Seadrill Limited reports third quarter 2014 net income of US$190 million and earnings per share of US$0.31
· The Seadrill Group on a consolidated basis maintains orderbacklog of approximately US$20 billion
· Seadrill Limited is suspending dividend distributions and focusing on debt reduction and value creating opportunities due to significant deterioration in the broader markets
· Seadrill receives a commitment for a US$1.35 billion credit facility to refinance the credit facilities secured by the West Pegasus, West Gemini, and West Orion.
· Seadrill sells an additional 28% limited partner interest in Seadrill Operating LP to Seadrill Partners for approximately US$373 million
· Seadrill secures a contract with ExxonMobil for employment of the West Saturn. The contract is for a firm period of two years plus a one year option and has a total revenue potential for the primary contract term of approximately US$497 million, inclusive of mobilization.
· Seadrill completes US$1.5 billion ECA facility to finance the West Saturn, West Neptune, and West Jupiter.
· Seadrill receives Board authorization to buyback up to 10% of outstanding shares.
· Seadrill receives confirmation from Petrobras of approval for contract awards on the Libra Field for the West Tellus and West Carina. The contracts are for a firm period of three years each and have a total revenue potential including mobilization of US$1.1 billion.
· Seadrill receives confirmation from Petrobras of approval for contract extensions for the West Eminence and West Taurus. The contracts are for a firm period of three years each and have a total revenue potential of US$1.1 billion.
· Seadrill secures a 145 day contract extension with Total for the semi-submersible unit West Eclipse. The total revenue potential for the extension is approximately US$65 million.
· Seadrill secures a new contract for the jack-up unit West Vigilant. The total revenue potential for the new contract is approximately US$102 million.
· Seadrill secures a new contract for the jack-up unit West Leda. The total revenue potential for the new contract is approximately US$16 million.
· Seadrill secures a new contract for the jack-up unit West Telesto. This is in direct continuation from the previous contract in Australia and is for one well.
· Seadrill sells the ultra-deepwater drillship West Vela to Seadrill Partners for US$900 million on a 100% basis.
· Seadrill received commitments for a US$750 million credit facility for SeaMex to refinance the West Oberon, West Intrepid, West Defender, West Courageous, and West Titania.
· Seadrill receives commitments for a US$950 million credit facility for the financing of the West Carina and West Eclipse.
* EBITDA is defined as earnings before interest, depreciation and amortization equal to operating profit plus depreciation and amortization.
* Seadrill Group is defined as all companies currently consolidated into Seadrill Limited plus Seadrill Partners
Third quarter 2014 results
Revenues for the third quarter of 2014 were US$1,293 million compared to US$1,222 million in the second quarter of 2014.
Operating profit for the quarter was US$461 million compared to US$476 million in the preceding quarter. The decrease is primarily due to a full quarter of idle time for the West Tellus and downtime on the West Eminence and Sevan Louisiana.
Net financial and other items for the quarter showed a loss of US$232 million compared to a gain of US$71 million in the previous quarter. The loss is primarily related to interest expense, losses on derivative financial instruments and net loss on extinguishment of debt.
Income taxes for the third quarter were US$39 million, an increase of US$145 million from the previous quarter. The increase is due to the release of a reserve following the resolution of uncertain tax positions during the second quarter.
Net income for the quarter was US$190 million representing basic and diluted earnings per share of $0.31.
As of September 30, 2014, total assets were US$27,387 million, an increase of US$783 million compared to the previous quarter.
Total current assets increased to US$3,422 million from US$3,185 million over the course of the quarter, primarily driven by an increase in cash and amounts due from related party, offset by a decrease in marketable securities and accounts receivable.
Total non-current assets increased to US$23,965 million from US$23,419 million primarily due to an increase in newbuildings driven by the final yard instalments for the West Jupiter, West Neptune, and West Saturn, offset by a decrease in investment in associated companies following the sale of operating company units to Seadrill Partners.
Total current liabilities decreased to US$3,609 million from US$4,103 million largely due to normal quarterly debt instalments and debt refinancing, offset by the drawdown in credit facilities for the newbuild program.
Long-term external interest bearing debt increased to US$11,422 million from US$10,025 million over the course of the quarter and total net interest bearing debt increased to US$12,640 million from US$12,405 million. The increase is primarily due to new credit facilities for newbuild deliveries and for refinancing, offset by the conversion of the US$650 million convertible bond.
Total equity increased to US$10,944 million from US$10,747 million as of September 30, 2014, primarily driven by net income for the quarter and the issuance of new shares as a result of the convertible bond conversion, offset by dividends paid.
As of September 30, 2014, cash and cash equivalents were US$638 million, an increase of US$95 million compared to the previous quarter.
Net cash provided by operating activities for the nine month period ended September 30, 2014 was US$1,295 million and net cash provided by investing activities for the same period was US$229 million. Net cash used in financing activities was US$1,596 million.