Shelf Drilling Ltd.
Shelf Drilling Ltd.
08/11/2022 | Press release | Distributed by Public on 08/10/2022 22:06
Shelf Drilling Reports Second Quarter 2022 Results
Tid11.08.2022, 03:57:57
MeldingsID568201
UtstederIDSHLF
InstrumentSHLF
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Shelf Drilling Reports Second Quarter 2022 Results
PRESS RELEASE
SHELF DRILLING REPORTS SECOND QUARTER 2022 RESULTS
Dubai, UAE, August 11, 2022 - Shelf Drilling, Ltd. ("Shelf Drilling" and, together with its subsidiaries, the "Company", OSE: SHLF) announces results for the second quarter of 2022 ending June 30. The results highlights will be presented by audio conference call on August 11, 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 August 5, 2022 and on page 3 of this release.
David Mullen, Chief Executive Officer, commented: "Since the beginning of the year, Shelf Drilling has continued to deliver safe, reliable, and efficient operations to our customers, with a year-to-date uptime performance of 99.5%. During the second quarter of 2022, our revenue and EBITDA were impacted as anticipated by a lower effective utilization in Southeast Asia where three of our rigs were under contract preparation for most of the quarter."
Mullen added: "The outlook for our industry remains very constructive with the backdrop of strong oil and gas prices as supply and energy security concerns persist. We continue to see an improving market with a notable increase in tendering and marketing activity across all our geographic regions. We signed new long-term contracts in recent months in the Middle East and India at higher dayrate levels, which helped contribute to growth in our backlog, and we expect to see further pricing momentum in the quarters ahead. In the last quarter, we signed agreements to acquire six high specification jack-ups. The first rig, the Shelf Drilling Victory, was acquired in July 2022, and the completion for the remaining five rigs is expected to take place in October 2022. We believe that these transformational and strategic fleet additions will position Shelf Drilling well to capitalize on the improving outlook in our sector."
Second Quarter Highlights
• Q2 2022 Revenues of $150.7 million, a 3.4% sequential decrease compared to Q1 2022.
• Q2 2022 Adjusted EBITDA of $49.0 million, representing an Adjusted EBITDA Margin of 33%.
• Q2 2022 Net loss of $16.7 million.
• Q2 2022 Capital Expenditures and Deferred Costs totaled $33.1 million.
• The Company's cash and cash equivalents balance at June 30, 2022 was $219.9 million.
• The Company's total debt at June 30, 2022 was $1.2 billion.
• Contract backlog was $1.8 billion at June 30, 2022 across 28 contracted rigs, up from $1.7 billion at March 31, 2022.
• In June 2022, the Company announced the acquisition of one premium jack-up drilling rig, the Shelf Drilling Victory, from a third party for $30.0 million and completed the acquisition in July 2022.
• In June 2022, the Company announced the acquisition of five premium jack-up drilling rigs from Noble Corporation for $375.0 million (the "Acquisition") with completion expected in October 2022.
Second Quarter Results
Revenues were $150.7 million in Q2 2022 compared to $156.0 million in Q1 2022. The $5.3 million (3.4%) sequential decrease in revenues was primarily due to lower effective utilization. Effective utilization decreased to 78% in Q2 2022 from 85% in Q1 2022, mostly due to the contract preparation projects for two rigs in Thailand and one rig in Vietnam and a planned shipyard for one rig in Saudi Arabia. Average earned dayrate increased modestly to $62.6 thousand in Q2 2022 from $61.8 thousand in Q1 2022.
Total operating and maintenance expenses increased by $3.6 million (4.2%) in Q2 2022 to $89.1 million compared to $85.5 million in Q1 2022. The sequential increase primarily included higher operating costs for one rig in Angola that was fully operating in Q2 2022 and higher maintenance and shipyard expenses for one rig which was preparing for a new contract in Thailand.
General and administrative expenses of $14.3 million in Q2 2022 increased by $1.8 million as compared to $12.5 million in Q1 2022, primarily due to certain one-time costs incurred during the current period related to the Acquisition.
Adjusted EBITDA for Q2 2022 was $49.0 million compared to $58.2 million for Q1 2022. The Adjusted EBITDA margin of 33% for Q2 2022 decreased from 37% in Q1 2022.
Capital expenditures and deferred costs of $33.1 million in Q2 2022 increased by $10.2 million from $22.9 million in Q1 2022. This increase was primarily due to higher spending for two rigs in Thailand which commenced new contracts in July 2022 and one rig in India which started operations in late June 2022, higher planned maintenance and shipyard costs for two rigs in Saudi Arabia and higher spending on fleet spares in Q2 2022, partly offset by the lower spending for one rig in Angola that started operations in Q1 2022.
Q2 2022 ending cash and cash equivalents balance of $219.9 million increased by $5.5 million from $214.4 million at the end of Q1 2022 primarily due to the $48.5 million net cash proceeds from the issuance of common shares, mostly offset by the $43.5 million deposits paid related to the Acquisition and the Shelf Drilling Victory, which was delivered in July 2022.
The Form 10-Q Equivalent, which includes the Consolidated Interim Financial Statements, and a corresponding slide presentation to address the results highlights for Q2 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:
To join the conference call, please use one of the following numbers.
• USA: +1 (0) 760 294 16 74
• UK: +44 (0) 203 059 58 69
• Norway: +47 21984292
• UAE: 800 0178 796 (accessible via landline only)
Additional international numbers are available here.
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 SECOND QUARTER 2022 RESULTS
Dubai, UAE, August 11, 2022 - Shelf Drilling, Ltd. ("Shelf Drilling" and, together with its subsidiaries, the "Company", OSE: SHLF) announces results for the second quarter of 2022 ending June 30. The results highlights will be presented by audio conference call on August 11, 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 August 5, 2022 and on page 3 of this release.
David Mullen, Chief Executive Officer, commented: "Since the beginning of the year, Shelf Drilling has continued to deliver safe, reliable, and efficient operations to our customers, with a year-to-date uptime performance of 99.5%. During the second quarter of 2022, our revenue and EBITDA were impacted as anticipated by a lower effective utilization in Southeast Asia where three of our rigs were under contract preparation for most of the quarter."
Mullen added: "The outlook for our industry remains very constructive with the backdrop of strong oil and gas prices as supply and energy security concerns persist. We continue to see an improving market with a notable increase in tendering and marketing activity across all our geographic regions. We signed new long-term contracts in recent months in the Middle East and India at higher dayrate levels, which helped contribute to growth in our backlog, and we expect to see further pricing momentum in the quarters ahead. In the last quarter, we signed agreements to acquire six high specification jack-ups. The first rig, the Shelf Drilling Victory, was acquired in July 2022, and the completion for the remaining five rigs is expected to take place in October 2022. We believe that these transformational and strategic fleet additions will position Shelf Drilling well to capitalize on the improving outlook in our sector."
Second Quarter Highlights
• Q2 2022 Revenues of $150.7 million, a 3.4% sequential decrease compared to Q1 2022.
• Q2 2022 Adjusted EBITDA of $49.0 million, representing an Adjusted EBITDA Margin of 33%.
• Q2 2022 Net loss of $16.7 million.
• Q2 2022 Capital Expenditures and Deferred Costs totaled $33.1 million.
• The Company's cash and cash equivalents balance at June 30, 2022 was $219.9 million.
• The Company's total debt at June 30, 2022 was $1.2 billion.
• Contract backlog was $1.8 billion at June 30, 2022 across 28 contracted rigs, up from $1.7 billion at March 31, 2022.
• In June 2022, the Company announced the acquisition of one premium jack-up drilling rig, the Shelf Drilling Victory, from a third party for $30.0 million and completed the acquisition in July 2022.
• In June 2022, the Company announced the acquisition of five premium jack-up drilling rigs from Noble Corporation for $375.0 million (the "Acquisition") with completion expected in October 2022.
Second Quarter Results
Revenues were $150.7 million in Q2 2022 compared to $156.0 million in Q1 2022. The $5.3 million (3.4%) sequential decrease in revenues was primarily due to lower effective utilization. Effective utilization decreased to 78% in Q2 2022 from 85% in Q1 2022, mostly due to the contract preparation projects for two rigs in Thailand and one rig in Vietnam and a planned shipyard for one rig in Saudi Arabia. Average earned dayrate increased modestly to $62.6 thousand in Q2 2022 from $61.8 thousand in Q1 2022.
Total operating and maintenance expenses increased by $3.6 million (4.2%) in Q2 2022 to $89.1 million compared to $85.5 million in Q1 2022. The sequential increase primarily included higher operating costs for one rig in Angola that was fully operating in Q2 2022 and higher maintenance and shipyard expenses for one rig which was preparing for a new contract in Thailand.
General and administrative expenses of $14.3 million in Q2 2022 increased by $1.8 million as compared to $12.5 million in Q1 2022, primarily due to certain one-time costs incurred during the current period related to the Acquisition.
Adjusted EBITDA for Q2 2022 was $49.0 million compared to $58.2 million for Q1 2022. The Adjusted EBITDA margin of 33% for Q2 2022 decreased from 37% in Q1 2022.
Capital expenditures and deferred costs of $33.1 million in Q2 2022 increased by $10.2 million from $22.9 million in Q1 2022. This increase was primarily due to higher spending for two rigs in Thailand which commenced new contracts in July 2022 and one rig in India which started operations in late June 2022, higher planned maintenance and shipyard costs for two rigs in Saudi Arabia and higher spending on fleet spares in Q2 2022, partly offset by the lower spending for one rig in Angola that started operations in Q1 2022.
Q2 2022 ending cash and cash equivalents balance of $219.9 million increased by $5.5 million from $214.4 million at the end of Q1 2022 primarily due to the $48.5 million net cash proceeds from the issuance of common shares, mostly offset by the $43.5 million deposits paid related to the Acquisition and the Shelf Drilling Victory, which was delivered in July 2022.
The Form 10-Q Equivalent, which includes the Consolidated Interim Financial Statements, and a corresponding slide presentation to address the results highlights for Q2 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:
To join the conference call, please use one of the following numbers.
• USA: +1 (0) 760 294 16 74
• UK: +44 (0) 203 059 58 69
• Norway: +47 21984292
• UAE: 800 0178 796 (accessible via landline only)
Additional international numbers are available here.
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.