Shelf Drilling Ltd.
Shelf Drilling Ltd.
05/12/2022 | Press release | Distributed by Public on 05/11/2022 22:49
Shelf Drilling Reports First Quarter 2022 Results
Tid12.05.2022, 04:47:24
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Shelf Drilling Reports First Quarter 2022 Results
PRESS RELEASE
SHELF DRILLING REPORTS FIRST QUARTER 2022 RESULTS
Dubai, UAE, May 12, 2022 - Shelf Drilling, Ltd. ("Shelf Drilling" and, together with its subsidiaries, the "Company", OSE: SHLF) announces results for the first quarter of 2022 ending March 31. The results highlights will be presented by audio conference call on May 12, 2022 at 6:00 pm Dubai time / 4:00 pm Oslo time. Dial-in details for the call are included in the press release posted on May 9, 2022 and on page 3 of this release.
David Mullen, Chief Executive Officer, commented: "As anticipated in the previous quarter, the start-up of three new contracts in West Africa and India in January 2022 contributed to an increase in sequential revenue of 15% and a significant impact to EBITDA for the first quarter of 2022. Our focus remains on delivering safe and reliable services and providing best-in-class operations to our customers."
Mullen added: "Tendering and marketing activity in the jack-up sector continues to improve in all geographies where we operate, and we have seen an acceleration over the past two months. As of March 31, 2022, our contract backlog was $1.7 billion with 28 of our 30 rigs under contract, representing a marketed utilization of 93%. We anticipate that our recent contract awards coupled with other contracts and extensions that are in advanced discussions will drive a further increase in our backlog during the second quarter of 2022. The significant improvement in the commodity price backdrop, combined with our strong customer relationships and proven operating track record will position Shelf Drilling very well. We expect global jack-up utilization and pricing to surpass pre-pandemic levels during 2022."
First Quarter Highlights
• Q1 2022 Revenues of $156.0 million, a 14.7% sequential increase compared to Q4 2021.
• Q1 2022 Adjusted EBITDA of $58.2 million, representing an Adjusted EBITDA Margin of 37%.
• Q1 2022 Net loss of $4.6 million.
• Q1 2022 Capital Expenditures and Deferred Costs totaled $22.9 million.
• The Company's cash and cash equivalents balance at March 31, 2022 was $214.4 million.
• The Company's total debt at March 31, 2022 was $1.2 billion.
• Contract backlog was $1.7 billion at March 31, 2022 across 28 contracted rigs.
• Subsequent to March 31, 2022, the Company has secured the following awards:
- Three-year contract extension for the High Island V in Saudi Arabia until May 2025
- Extension for the Key Singapore in India until May 2023
- Short-term program for the Shelf Drilling Scepter in Vietnam expected to commence in July 2022
First Quarter Results
Revenues were $156.0 million in Q1 2022 compared to $136.1 million in Q4 2021. The $20.0 million (14.7%) sequential increase in revenues was primarily due to higher effective utilization. Effective utilization increased to 85% in Q1 2022 from 74% in Q4 2021, mostly due to the start-up of three new contracts in Angola, Congo and India. Average earned dayrate decreased slightly to $61.8 thousand in Q1 2022 from $62.9 thousand in Q4 2021.
Total operating and maintenance expenses increased by $2.0 million (2.4%) in Q1 2022 to $85.5 million compared to $83.5 million in Q4 2021. The sequential increase primarily included higher operating costs for one rig in Angola that started contract in January 2022, higher expenses for one rig mobilizing to India and expected to commence its contract in June 2022, partially offset by lower maintenance and shipyard expenses for three rigs in India and lower costs in fleet spares.
General and administrative expenses of $12.5 million in Q1 2022 increased by $2.3 million as compared to $10.2 million in Q4 2021, primarily due to an increase in compensation and benefit expenses in Q1 2022 as compared to Q4 2021. General and administrative expenses in both Q1 2022 and Q4 2021 included $0.6 million of non-cash share-based compensation expense.
Adjusted EBITDA for Q1 2022 was $58.2 million compared to $43.5 million for Q4 2021. The Adjusted EBITDA margin of 37% for Q1 2022 increased from 32% in Q4 2021.
Capital expenditures and deferred costs of $22.9 million in Q1 2022 decreased by $10.9 million from $33.8 million in Q4 2021. This decrease was primarily due to lower contract preparation expenditures for two rigs in India and one rig each in Angola and Congo, which started operations in late 2021 or early 2022 and lower spending on fleet spares in Q1 2022, partly offset by the initial contract preparation work for one rig mobilizing to India which is expected to start operations in June 2022 and increased spending for one rig in Nigeria.
Q1 2022 ending cash and cash equivalents balance of $214.4 million decreased by $17.9 million from $232.3 million at the end of Q4 2021 primarily due to higher cash interest payments in Q1 2022.
The Form 10-Q Equivalent, which includes the Consolidated Interim Financial Statements, and a corresponding slide presentation to address the results highlights for Q1 2022 are available on the Company's website.
For further queries, please contact:
Greg O'Brien, Executive Vice President and Chief Financial Officer
Shelf Drilling, Ltd.
Tel.: +971 4567 3616
Email : [email protected]
Dial in Details for the Audio Conference call:
Participants will receive conference access information only when they register for the conference via the link below:
Online Registration: http://emea.directeventreg.com/registration/2753816
Participants must register for the call using online registration. Upon registering, each participant will be provided with call details and a Registrant ID. Call reminder will also be sent to registered participants via email the day prior to the event.
Conference ID number: 2753816
About Shelf Drilling
Shelf Drilling is a leading international shallow water offshore contractor providing services and equipment for the drilling, completion, maintenance and decommissioning of oil and natural gas wells and with rig operations across the Middle East, North Africa and the Mediterranean, Southeast Asia, India and West Africa. Shelf Drilling was founded in 2012 and has established itself as a leader within its industry through its fit-for-purpose strategy and close working relationship with industry leading clients. The Company is incorporated under the laws of the Cayman Islands with its corporate headquarters in Dubai, United Arab Emirates. The Company is listed on the Oslo Stock Exchange under the ticker "SHLF".
Special Note Regarding Forward-Looking Statements
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and may be beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Given these factors, users of this information should not place undue reliance on the forward-looking statements.
Additional information about Shelf Drilling can be found at www.shelfdrilling.com.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
SHELF DRILLING REPORTS FIRST QUARTER 2022 RESULTS
Dubai, UAE, May 12, 2022 - Shelf Drilling, Ltd. ("Shelf Drilling" and, together with its subsidiaries, the "Company", OSE: SHLF) announces results for the first quarter of 2022 ending March 31. The results highlights will be presented by audio conference call on May 12, 2022 at 6:00 pm Dubai time / 4:00 pm Oslo time. Dial-in details for the call are included in the press release posted on May 9, 2022 and on page 3 of this release.
David Mullen, Chief Executive Officer, commented: "As anticipated in the previous quarter, the start-up of three new contracts in West Africa and India in January 2022 contributed to an increase in sequential revenue of 15% and a significant impact to EBITDA for the first quarter of 2022. Our focus remains on delivering safe and reliable services and providing best-in-class operations to our customers."
Mullen added: "Tendering and marketing activity in the jack-up sector continues to improve in all geographies where we operate, and we have seen an acceleration over the past two months. As of March 31, 2022, our contract backlog was $1.7 billion with 28 of our 30 rigs under contract, representing a marketed utilization of 93%. We anticipate that our recent contract awards coupled with other contracts and extensions that are in advanced discussions will drive a further increase in our backlog during the second quarter of 2022. The significant improvement in the commodity price backdrop, combined with our strong customer relationships and proven operating track record will position Shelf Drilling very well. We expect global jack-up utilization and pricing to surpass pre-pandemic levels during 2022."
First Quarter Highlights
• Q1 2022 Revenues of $156.0 million, a 14.7% sequential increase compared to Q4 2021.
• Q1 2022 Adjusted EBITDA of $58.2 million, representing an Adjusted EBITDA Margin of 37%.
• Q1 2022 Net loss of $4.6 million.
• Q1 2022 Capital Expenditures and Deferred Costs totaled $22.9 million.
• The Company's cash and cash equivalents balance at March 31, 2022 was $214.4 million.
• The Company's total debt at March 31, 2022 was $1.2 billion.
• Contract backlog was $1.7 billion at March 31, 2022 across 28 contracted rigs.
• Subsequent to March 31, 2022, the Company has secured the following awards:
- Three-year contract extension for the High Island V in Saudi Arabia until May 2025
- Extension for the Key Singapore in India until May 2023
- Short-term program for the Shelf Drilling Scepter in Vietnam expected to commence in July 2022
First Quarter Results
Revenues were $156.0 million in Q1 2022 compared to $136.1 million in Q4 2021. The $20.0 million (14.7%) sequential increase in revenues was primarily due to higher effective utilization. Effective utilization increased to 85% in Q1 2022 from 74% in Q4 2021, mostly due to the start-up of three new contracts in Angola, Congo and India. Average earned dayrate decreased slightly to $61.8 thousand in Q1 2022 from $62.9 thousand in Q4 2021.
Total operating and maintenance expenses increased by $2.0 million (2.4%) in Q1 2022 to $85.5 million compared to $83.5 million in Q4 2021. The sequential increase primarily included higher operating costs for one rig in Angola that started contract in January 2022, higher expenses for one rig mobilizing to India and expected to commence its contract in June 2022, partially offset by lower maintenance and shipyard expenses for three rigs in India and lower costs in fleet spares.
General and administrative expenses of $12.5 million in Q1 2022 increased by $2.3 million as compared to $10.2 million in Q4 2021, primarily due to an increase in compensation and benefit expenses in Q1 2022 as compared to Q4 2021. General and administrative expenses in both Q1 2022 and Q4 2021 included $0.6 million of non-cash share-based compensation expense.
Adjusted EBITDA for Q1 2022 was $58.2 million compared to $43.5 million for Q4 2021. The Adjusted EBITDA margin of 37% for Q1 2022 increased from 32% in Q4 2021.
Capital expenditures and deferred costs of $22.9 million in Q1 2022 decreased by $10.9 million from $33.8 million in Q4 2021. This decrease was primarily due to lower contract preparation expenditures for two rigs in India and one rig each in Angola and Congo, which started operations in late 2021 or early 2022 and lower spending on fleet spares in Q1 2022, partly offset by the initial contract preparation work for one rig mobilizing to India which is expected to start operations in June 2022 and increased spending for one rig in Nigeria.
Q1 2022 ending cash and cash equivalents balance of $214.4 million decreased by $17.9 million from $232.3 million at the end of Q4 2021 primarily due to higher cash interest payments in Q1 2022.
The Form 10-Q Equivalent, which includes the Consolidated Interim Financial Statements, and a corresponding slide presentation to address the results highlights for Q1 2022 are available on the Company's website.
For further queries, please contact:
Greg O'Brien, Executive Vice President and Chief Financial Officer
Shelf Drilling, Ltd.
Tel.: +971 4567 3616
Email : [email protected]
Dial in Details for the Audio Conference call:
Participants will receive conference access information only when they register for the conference via the link below:
Online Registration: http://emea.directeventreg.com/registration/2753816
Participants must register for the call using online registration. Upon registering, each participant will be provided with call details and a Registrant ID. Call reminder will also be sent to registered participants via email the day prior to the event.
Conference ID number: 2753816
About Shelf Drilling
Shelf Drilling is a leading international shallow water offshore contractor providing services and equipment for the drilling, completion, maintenance and decommissioning of oil and natural gas wells and with rig operations across the Middle East, North Africa and the Mediterranean, Southeast Asia, India and West Africa. Shelf Drilling was founded in 2012 and has established itself as a leader within its industry through its fit-for-purpose strategy and close working relationship with industry leading clients. The Company is incorporated under the laws of the Cayman Islands with its corporate headquarters in Dubai, United Arab Emirates. The Company is listed on the Oslo Stock Exchange under the ticker "SHLF".
Special Note Regarding Forward-Looking Statements
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and may be beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Given these factors, users of this information should not place undue reliance on the forward-looking statements.
Additional information about Shelf Drilling can be found at www.shelfdrilling.com.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.