Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 27, 2015 | Aug. 04, 2014 |
Entity [Abstract] | |||
Entity Registrant Name | Paragon Offshore plc | ||
Entity Central Index Key | 1594590 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 85,526,352 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $932 |
Consolidated_and_Combined_Bala
Consolidated and Combined Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $56,772 | $36,581 |
Restricted cash | 12,502 | 0 |
Accounts receivable | 539,376 | 356,241 |
Prepaid and other current assets | 104,644 | 51,182 |
Total current assets | 713,294 | 444,004 |
Property and equipment, at cost | 4,842,112 | 6,067,066 |
Accumulated depreciation | -2,431,752 | -2,607,382 |
Property and equipment, net | 2,410,360 | 3,459,684 |
Other assets | 129,735 | 79,111 |
Total assets | 3,253,389 | 3,982,799 |
Current liabilities | ||
Current maturities of long-term debt | 272,166 | 0 |
Accounts payable | 160,874 | 124,442 |
Accrued payroll and related costs | 81,416 | 60,738 |
Taxes payable | 69,033 | 0 |
Interest payable | 33,658 | 412 |
Other current liabilities | 105,147 | 40,962 |
Total current liabilities | 722,294 | 226,554 |
Long-term debt | 1,888,439 | 1,561,141 |
Deferred income taxes | 58,497 | 101,703 |
Other liabilities | 89,910 | 88,068 |
Total liabilities | 2,759,140 | 1,977,466 |
Commitments and contingencies | ||
Equity | ||
Ordinary shares, $0.01 par value, 186,457,393 shares authorized; 84,753,393 issued and outstanding at December 31, 2014 | 848 | 0 |
Additional paid-in capital | 1,423,153 | 0 |
Retained earnings | -895,249 | 0 |
Net parent investment | 0 | 2,005,339 |
Accumulated other comprehensive loss | -37,144 | -6 |
Total shareholders' equity | 491,608 | 2,005,333 |
Non-controlling interest | 2,641 | 0 |
Total equity | 494,249 | 2,005,333 |
Total liabilities and equity | $3,253,389 | $3,982,799 |
Consolidated_and_Combined_Bala1
Consolidated and Combined Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 |
Ordinary shares | |
Par value | $0.01 |
Shares authorized (in shares) | 186,457,393 |
Shares issued (in shares) | 84,753,393 |
Shares outstanding (in shares) | 84,753,393 |
Consolidated_and_Combined_Stat
Consolidated and Combined Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating revenues | |||
Contract drilling services | $1,866,497 | $1,807,952 | $1,448,569 |
Reimbursables | 93,786 | 49,810 | 56,444 |
Labor contract drilling services | 33,401 | 35,146 | 36,591 |
Other | 78 | 94 | 253 |
Total operating revenues | 1,993,762 | 1,893,002 | 1,541,857 |
Operating costs and expenses | |||
Contract drilling services | 890,694 | 914,702 | 874,805 |
Reimbursables | 77,843 | 38,341 | 44,535 |
Labor contract drilling services | 24,774 | 24,333 | 22,006 |
Depreciation and amortization | 422,235 | 413,305 | 367,837 |
General and administrative | 62,081 | 64,907 | 60,831 |
Loss on impairment | 1,059,487 | 43,688 | 0 |
Gain on disposal of assets, net | 0 | -35,646 | 0 |
Gain on contract settlements/extinguishments, net | 0 | -24,373 | -4,869 |
Gain on repurchase of long-term debt | -18,675 | 0 | 0 |
Total operating costs and expenses | 2,518,439 | 1,439,257 | 1,365,145 |
Operating income (loss) | -524,677 | 453,745 | 176,712 |
Other income (expense) | |||
Interest expense, net of amount capitalized | -56,732 | -5,938 | -3,746 |
Interest income and other, net | 3,998 | -1,897 | 1,959 |
Income (loss) before income taxes | -577,411 | 445,910 | 174,925 |
Income tax provision | -69,394 | -85,605 | -48,688 |
Net income (loss) | -646,805 | 360,305 | 126,237 |
Net loss attributable to non-controlling interest | 59 | 0 | 0 |
Net income (loss) attributable to Paragon Offshore | ($646,746) | $360,305 | $126,237 |
Earnings (loss) per share | |||
Basic and diluted (usd per share) | ($7.63) | $4.25 | $1.49 |
Weighted-average shares outstanding | |||
Basic and diluted (in shares) | 84,753 | 84,753 | 84,753 |
Consolidated_and_Combined_Stat1
Consolidated and Combined Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net Income (loss) | ($646,805) | $360,305 | $126,237 |
Other comprehensive income (loss), net of tax | |||
Foreign currency translation adjustments | -1,481 | 179 | 1,743 |
Foreign currency forward contracts | -4,027 | 0 | 0 |
Net pension plan gain | 1,153 | 0 | 0 |
Amortization of deferred pension plan amounts | -2,294 | 0 | 0 |
Total other comprehensive income (loss), net | -6,649 | 179 | 1,743 |
Total comprehensive income (loss) | ($653,454) | $360,484 | $127,980 |
Consolidated_and_Combined_Stat2
Consolidated and Combined Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net income (loss) | ($646,805) | $360,305 | $126,237 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 422,235 | 413,305 | 367,837 |
Loss on impairment | 1,059,487 | 43,688 | 0 |
Gain on disposal of assets, net | 0 | -35,646 | 0 |
Gain on repurchase of Senior Notes | -18,675 | 0 | 0 |
Deferred income taxes | 19,475 | 4,869 | -14,141 |
Share-based compensation | 19,446 | 21,114 | 18,565 |
Net change in other assets and liabilities | -158,174 | 14,840 | -93,014 |
Net cash from operating activities | 696,989 | 822,475 | 405,484 |
Cash flows from investing activities | |||
Capital expenditures | -261,641 | -366,361 | -532,404 |
Proceeds from disposal of assets | 6,570 | 61,000 | 0 |
Acquisition of Prospector Offshore Drilling S.A. | -176,569 | 0 | 0 |
Acquisition of Prospector Offshore Drilling S.A. non-controlling interest | -10,306 | 0 | 0 |
Change in restricted cash | -12,502 | 0 | 0 |
Change in accrued capital expenditures | 1,230 | -12,365 | -8,463 |
Net cash from investing activities | -453,218 | -317,726 | -540,867 |
Cash flows from financing activities | |||
Proceeds from issuance of Senior Notes and Term Loan Facility | 1,710,550 | 0 | 0 |
Repayment of Term Loan Facility | -1,625 | 0 | 0 |
Purchase of Senior Notes | -65,354 | 0 | 0 |
Dividends paid | -11,075 | 0 | 0 |
Debt issuance costs | -19,253 | -2,484 | -5,221 |
Net transfers to parent | -2,698,295 | -1,757,554 | 770,567 |
Net cash from financing activities | -223,580 | -538,706 | 130,154 |
Net change in cash and cash equivalents | 20,191 | -33,957 | -5,229 |
Cash and cash equivalents, beginning of period | 36,581 | 70,538 | 75,767 |
Cash and cash equivalents, end of period | 56,772 | 36,581 | 70,538 |
Supplemental information for non-cash activities | |||
Transfer from parent of property and equipment | 18,124 | 16,057 | 5,310 |
Transfer from parent of other assets | 0 | 0 | 987 |
Total Non-Cash Transfers from Parent | 18,124 | 16,057 | 6,297 |
Predecessor | |||
Cash flows from operating activities | |||
Net income (loss) | 237,428 | ||
Cash flows from investing activities | |||
Capital expenditures | -366,000 | ||
Cash flows from financing activities | |||
Net change in borrowings on credit facilities | 707,472 | 1,221,332 | -635,192 |
Successor | |||
Cash flows from operating activities | |||
Net income (loss) | -884,233 | ||
Cash flows from financing activities | |||
Net change in borrowings on credit facilities | $154,000 | $0 | $0 |
Consolidated_and_Combined_Stat3
Consolidated and Combined Statements of Changes in Equity (USD $) | Total | Predecessor | Successor | Ordinary Shares | Additional Paid-in Capital | Retained Earnings | Retained Earnings | Accumulated Other Comprehensive (Loss)/Gain | Net Parent Investment | Net Parent Investment | Total Stockholders' Equity and Net Parent Investment | Total Stockholders' Equity and Net Parent Investment | Total Stockholders' Equity and Net Parent Investment | Noncontrolling Interest | Noncontrolling Interest |
In Thousands, except Share data, unless otherwise specified | Successor | Predecessor | Predecessor | Successor | Successor | ||||||||||
Balance at Dec. 31, 2011 | $2,441,823 | $0 | $0 | $0 | ($1,928) | $2,443,751 | $2,441,823 | ||||||||
Balance (in shares) at Dec. 31, 2011 | 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income (loss) | 126,237 | 126,237 | 126,237 | ||||||||||||
Net transfers to parent | 795,429 | 795,429 | 795,429 | ||||||||||||
Other comprehensive income, net | 1,743 | 1,743 | 1,743 | ||||||||||||
Balance at Dec. 31, 2012 | 3,365,232 | 0 | 0 | 0 | -185 | 3,365,417 | 3,365,232 | ||||||||
Balance (in shares) at Dec. 31, 2012 | 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income (loss) | 360,305 | 360,305 | 360,305 | ||||||||||||
Net transfers to parent | -1,720,383 | -1,720,383 | -1,720,383 | ||||||||||||
Other comprehensive income, net | 179 | 179 | 179 | ||||||||||||
Balance at Dec. 31, 2013 | 2,005,333 | 0 | 0 | 0 | -6 | 2,005,339 | 2,005,333 | 0 | |||||||
Balance (in shares) at Dec. 31, 2013 | 0 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income (loss) | -646,805 | 237,428 | -884,233 | -884,174 | 237,428 | 237,428 | -884,174 | -59 | |||||||
Net changes in parent investment | -855,249 | -855,249 | -855,249 | ||||||||||||
Distribution by former parent (in shares) | 84,753,000 | 84,753,000 | |||||||||||||
Distribution by former parent | 848 | 1,417,119 | -30,449 | -1,387,518 | |||||||||||
Stock-based compensation | 7,689 | 7,689 | 7,689 | ||||||||||||
Dividends paid | -11,075 | -11,075 | -11,075 | ||||||||||||
Acquisition of Prospector | 11,311 | -40 | -40 | 11,351 | |||||||||||
Acquisition of Prospector non-controlling interest | -10,306 | -1,655 | -1,655 | -8,651 | |||||||||||
Other comprehensive income, net | -6,649 | -6,649 | -6,649 | ||||||||||||
Balance at Dec. 31, 2014 | $494,249 | $848 | $1,423,153 | ($895,249) | ($37,144) | $0 | $491,608 | $2,641 | |||||||
Balance (in shares) at Dec. 31, 2014 | 84,753,393 | 84,753,000 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Organization and Basis of Presentation | ORGANIZATION AND BASIS OF PRESENTATION | ||||
Paragon Offshore plc (together with its subsidiaries, “Paragon,” the “Company,” “we,” “us” or “our”) is a global provider of offshore drilling rigs with a fleet that currently includes 34 jackups and six floaters (four drillships and two semisubmersibles). We refer to our semisubmersibles and drillships collectively as “floaters.” Our primary business is to contract our drilling rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for our exploration and production customers on a dayrate basis around the world. | |||||
Spin-off Transaction | |||||
On July 17, 2014, Paragon Offshore Limited, an indirect wholly owned subsidiary of Noble Corporation plc (“Noble”) incorporated under the laws of England and Wales, re-registered under the Companies Act 2006 as a public limited company under the name of Paragon Offshore plc. Noble transferred to us the assets and liabilities (the “Separation”) constituting most of Noble’s standard specification drilling units and related assets, liabilities and business. On August 1, 2014, Noble made a pro rata distribution to its shareholders of all of our issued and outstanding ordinary shares (the “Distribution” and, collectively with the Separation, the “Spin-Off”). In connection with the Distribution, Noble shareholders received one ordinary share of Paragon for every three ordinary shares of Noble owned. | |||||
Acquisition of Prospector Offshore Drilling S. A. | |||||
On November 17, 2014, Paragon acquired 89.3 million, or 94.4%, of the outstanding shares of Prospector Offshore Drilling S.A. (“Prospector”), an offshore drilling company organized in Luxembourg and traded on the Oslo Axess, from certain shareholders and in open market purchases for approximately $190 million in cash. In December 2014, we purchased an additional 4.1 million shares for approximately $10 million in cash, increasing our ownership to approximately 93.4 million shares, or 98.7%, of the outstanding shares of Prospector. On January 22, 2015, we settled a mandatory tender offer for additional outstanding shares, increasing our ownership to approximately 99.6% of the outstanding shares of Prospector. On February 23, 2015, we acquired all remaining issued and outstanding shares in Prospector pursuant to the laws of Luxembourg. We spent approximately $202 million in aggregate to acquire 100% of Prospector and funded the purchase of the shares of Prospector using proceeds from our revolving credit facility and cash on hand. | |||||
The Prospector acquisition expanded and enhanced our global fleet by adding two high specification jackups contracted to Total E&P U.K. Limited and Elf Exploration U.K. Limited (“Total S.A.”) for use in the United Kingdom sector of the North Sea. In connection with our acquisition of Prospector, we acquired subsidiaries that contracted for the construction of three newbuild high specification jackup rigs by Shanghai Waigaoqiao Ship Co. Ltd. (“SWS”) in China. These rigs are currently scheduled for delivery in April 2015, September 2015 and March 2016, respectively. Each newbuild is being built pursuant to a contract between one of these subsidiaries and SWS, without a Paragon or Prospector parent company guarantee or other direct recourse to any other subsidiary of Paragon other than the applicable subsidiary. Prospector's results of operations are included in our results beginning on November 17, 2014. | |||||
Basis of Presentation | |||||
The consolidated and combined financial information contained in this report includes periods that ended prior to the Spin-Off on August 1, 2014. For all periods prior to the Spin-Off, the combined financial statements and related discussion of financial condition and results of operations contained in this report pertain to the historical results of the Noble Standard-Spec Business (our “Predecessor”), which comprised the entire standard specification drilling fleet and related operations of Noble. Our Predecessor’s historical combined financial statements include three standard specification drilling units that were retained by Noble and three standard specification drilling units that were sold by Noble prior to the Separation. | |||||
Our Predecessor’s historical combined financial statements for the periods prior to the Spin-Off include assets and liabilities that are specifically identifiable or have been allocated to our Predecessor. Revenues and costs directly related to our Predecessor have been included in the accompanying consolidated and combined financial statements. Our Predecessor received service and support functions from Noble and the costs associated with these support functions have been allocated to our Predecessor using various inputs, such as head count, services rendered, and assets assigned to our Predecessor. Our management considers the allocation methodologies used to be reasonable and appropriate reflections of the related expenses attributable to us for purposes of the carve-out financial statements; however, the expenses reflected in the results of our Predecessor and included in these consolidated and combined statements may not be indicative of the actual expenses that would have been incurred during the periods presented if our Predecessor had operated as a separate standalone entity and may not be indicative of expenses that will be incurred in the future by us. These allocated costs are primarily related to corporate administrative expenses including executive oversight, employee related costs including pensions and other benefits, and corporate and shared employees for the following functional groups: | |||||
• | information technology, | ||||
• | legal, accounting, finance and treasury services, | ||||
• | human resources, | ||||
• | marketing, and | ||||
• | other corporate and infrastructural services. | ||||
We consolidate the historical combined financial results of our Predecessor in our consolidated and combined financial statements for all periods prior to the Spin-Off. All financial information presented after the Spin-Off represents the results of operations, financial position and cash flows of Paragon. Accordingly: | |||||
• | Our Consolidated and Combined Statements of Income and Comprehensive Income for the year ended December 31, 2014 consist of the consolidated results of Paragon for the five months ended December 31, 2014 and the combined results of our Predecessor for the prior months. Our Combined Statements of Income and Comprehensive Income for the years ended December 31, 2013 and 2012 consist entirely of the combined results of our Predecessor. Our net income for the periods prior to July 31, 2014 was recorded to “Net parent investment.” | ||||
• | Our Consolidated and Combined Balance Sheet at December 31, 2014 consists of the balances of Paragon, while at December 31, 2013, the Combined Balance Sheet consists of the balances of our Predecessor. | ||||
• | Our Consolidated and Combined Statement of Cash Flows for the year ended December 31, 2014 consists of the consolidated results of Paragon for the five months ended December 31, 2014, and the combined results of our Predecessor for prior months. Our Combined Statement of Cash Flows for the years ended December 31, 2013 and 2012 consist entirely of the combined results of our Predecessor. | ||||
• | Our Consolidated and Combined Statement of Changes in Equity for the year ended December 31, 2014 consists of both the activity for Paragon completed in connection with, and subsequent to, the Distribution on August 1, 2014 through the five months ended December 31, 2014 and for our Predecessor for the prior months. Our Combined Statements of Changes in Equity for the years ended December 31, 2013 and 2012 consist of activity for our Predecessor recorded to “Net parent investment.” | ||||
As our Predecessor previously operated within Noble’s corporate cash management program for all periods prior to the Distribution, funding requirements and related transactions between our Predecessor and Noble have been summarized and reflected on our consolidated and combined balance sheet as “Net parent investment” without regard to whether the funding represents a receivable, liability or equity. Based on the terms of our Separation from Noble, we ceased being a part of Noble’s corporate cash management program. Any transactions with Noble after August 1, 2014 have been, and will continue to be, cash settled in the ordinary course of business, and such amounts are included in “Accounts payable” on our consolidated and combined balance sheet. | |||||
Our working capital and capital expenditure requirements have historically been part of the corporate-wide cash management program for Noble. After the Distribution, we have been solely responsible for the provision of funds to finance our working capital and other cash requirements. We expect our primary sources of liquidity in the future will be cash generated from operations, our Revolving Credit Facility and any future financing arrangements, if necessary. Our principal uses of liquidity will be to fund our operating expenditures and capital expenditures, including major projects, upgrades and replacements to drilling equipment, to service our outstanding indebtedness, acquisitions and to pay future dividends. | |||||
At December 31, 2014, we had $57 million of cash on hand and $634 million of committed financing available under our Revolving Credit Facility, which will expire in 2019. In January 2015, we repurchased $99.6 million par value of the Prospector Bonds at a price of 101% of par. As of March 12, 2015, approximately $0.4 million par value of Prospector Bonds remained outstanding. We are also currently in discussions with lenders to waive the prepayment requirement for the Prospector Senior Credit Facility of $270 million beyond March 16, 2015. In the event these lenders do not waive the prepayment requirement, we will repay in full the remaining principal balance outstanding under the Prospector Senior Credit Facility (approximately $260 million on March 12, 2015) through the use of cash on hand and borrowings under our Revolving Credit Facility. | |||||
At December 31, 2014, we have purchase commitments of $400 million and $199 million currently due in 2015 and 2016, respectively, related to three high specification jack up rigs under construction. Each of these rigs is being built pursuant to a contract between a subsidiary of Prospector and the shipyard, without a Paragon or Prospector parent company guarantee or other direct recourse to any other subsidiary of Paragon other than the applicable subsidiary. We are currently in discussions with the shipyard to extend delivery of these contracts. In the event we are unable to extend delivery, we will lose ownership of each rig individually. At that point, the associated costs currently capitalized (representing down-payments on these rigs) on our balance sheet totaling $32 million for all three rigs will be written off. | |||||
Our debt facilities are subject to financial and non-financial covenants. While we believe we will satisfy our covenants, current and foreseeable market conditions may prevent us from maintaining compliance at the December 31, 2015 measurement date. The current low oil price environment is having an impact on contract renewal rates and an extended downturn in our industry could be exacerbated by an oversupply of new rigs in the medium term. However, we believe that there are proactive measures we can take that are within our control to prevent us from breaching these financial and non-financial covenants, such as reducing our operating and capital expenses, and/or designating certain of the Prospector subsidiaries as restricted subsidiaries under our debt agreements, which would allow us to include such subsidiaries’ financial results in these covenant calculations of our debt agreements, or seek waiver on the covenants from our lenders. | |||||
Our operating cash flows, including collection of receivables outstanding at December 31, 2014, coupled with financing available under the Revolving Credit Facility will be sufficient to meet our liquidity needs for at least the next 12 months. Our ability to continue to fund our operations will be affected by general economic, competitive and other factors, many of which are outside of our control and becoming more challenging in the current market environment. If our future cash flows from operations and other capital resources are insufficient to fund our liquidity needs, we may be forced to reduce or delay our capital and operational expenditures, sell assets, obtain additional debt or equity financing, or refinance all or a portion of our debt. | |||||
Separation from Noble | |||||
Prior to the Spin-off, our total equity represented the cumulative net parent investment by Noble, including any prior net income attributable to our Predecessor as part of Noble. At the Spin-off, Noble contributed its entire net parent investment in our Predecessor. Concurrent with the Spin-off and in accordance with the terms of our Separation from Noble, certain assets and liabilities were transferred between us and Noble, which have been recorded as part of the net capital contributed by Noble. The following table presents the opening balance sheet of our Predecessor as of August 1, 2014 that was distributed to us in connection with the Spin-Off. | |||||
August 1, | |||||
(In thousands, except share amounts) | 2014 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 104,152 | |||
Accounts receivable | 377,324 | ||||
Prepaid and other current assets | 126,264 | ||||
Total current assets | 607,740 | ||||
Property and equipment, at cost | 5,615,161 | ||||
Accumulated depreciation | (2,640,273 | ) | |||
Property and equipment, net | 2,974,888 | ||||
Other assets | 102,419 | ||||
Total assets | $ | 3,685,047 | |||
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Current maturities of long-term debt | $ | 4,875 | |||
Accounts payable | 129,952 | ||||
Accrued payroll and related costs | 67,256 | ||||
Taxes payable | 53,384 | ||||
Interest payable | 3,770 | ||||
Other current liabilities | 117,887 | ||||
Total current liabilities | 377,124 | ||||
Long-term debt | 1,725,125 | ||||
Deferred income taxes | 79,659 | ||||
Other liabilities | 115,621 | ||||
Total liabilities | 2,297,529 | ||||
Equity | |||||
Ordinary shares | 848 | ||||
Additional paid-in capital | 1,417,119 | ||||
Accumulated other comprehensive loss | (30,449 | ) | |||
Total equity | 1,387,518 | ||||
Total liabilities and equity | $ | 3,685,047 | |||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Principles of Combination and Consolidation | |
The consolidated and combined financial statements include our accounts, those of our wholly-owned subsidiaries and entities in which we hold a controlling financial interest. The combined financial statements of our Predecessor include our net assets and results of our operations as previously described. All significant intercompany accounts and transactions have been eliminated in combination and consolidation. | |
Foreign Currency Translation | |
We define foreign currency as any non-U.S. denominated currency. In non-U.S. locations where the U.S. dollar has been designated as the functional currency (based on an assessment of the economic circumstances of the foreign operation), local currency transaction gains and losses are included in net income. In non-U.S. locations where the local currency is the functional currency, assets and liabilities are translated at the rates of exchange on the balance sheet date, while income and expense items are translated at average rates of exchange during the year. The resulting gains or losses arising from the translation of accounts from the functional currency to the U.S. dollar are included in “Accumulated other comprehensive loss” in the accompanying consolidated and combined balance sheets. We did not recognize any material gains or losses on foreign currency transactions or translations during the years ended December 31, 2014, 2013 or 2012. | |
Cash and Cash Equivalents | |
Cash and cash equivalents include cash on hand, demand deposits with banks and all highly liquid investments with original maturities of three months or less. Our cash, cash equivalents and short-term investments are subject to potential credit risk, and certain of our cash accounts carry balances greater than federally insured limits. Cash and cash equivalents are primarily held by major banks or investment firms. Our cash management and investment policies restrict investments to lower risk, highly liquid securities and we perform periodic evaluations of the relative credit standing of the financial institutions with which we conduct business. | |
Fair Value Measurements | |
We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Our valuation techniques require inputs that we categorize using a three-level hierarchy, from highest to lowest level of observable inputs, as follows: (1) unadjusted quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) direct or indirect observable inputs, including quoted prices or other market data, for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and (3) unobservable inputs that require significant judgment for which there is little or no market data (“Level 3”). When multiple input levels are required for a valuation, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. | |
Our cash and cash equivalents, accounts receivable and accounts payable are by their nature short-term. As a result, the carrying values included in the accompanying consolidated and combined balance sheets approximate fair value. | |
Property and Equipment, at Cost | |
Property and equipment is stated at cost, reduced by provisions to recognize economic impairment in value whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable. Major replacements and improvements are capitalized. When assets are sold, retired or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and the gain or loss is recognized. Drilling equipment and facilities are depreciated using the straight-line method over their estimated useful lives as of the date placed in service or date of major refurbishment. Estimated useful lives of our drilling equipment range from three to thirty years. Other property and equipment is depreciated using the straight-line method over useful lives ranging from two to twenty-five years. Included in accounts payable were $24 million and $29 million of capital accruals as of December 31, 2014 and 2013, respectively. | |
Scheduled maintenance of equipment is performed based on the number of hours operated in accordance with our preventative maintenance program. Routine repair and maintenance costs are charged to expense as incurred; however, the costs of overhauls and asset replacement projects that benefit future periods and which typically occur every three to five years are capitalized when incurred and depreciated over an equivalent period. These overhauls and asset replacement projects are included in “Property and equipment, at cost” in our consolidated and combined balance sheets. Such amounts, net of accumulated depreciation, totaled $193 million and $211 million at December 31, 2014 and 2013, respectively. Depreciation expense related to overhauls and asset replacement totaled $85 million, $76 million and $66 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
We evaluate the impairment of property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, on an annual basis, we complete an impairment analysis on all of our rigs. An impairment loss on our property and equipment exists when the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized represents the excess of the asset’s carrying value over the estimated fair value. As part of this analysis, we make assumptions and estimates regarding future market conditions. To the extent actual results do not meet our estimated assumptions we may take an impairment loss in the future (see Note 6, “Property and Equipment”). | |
Debt Issuance Costs | |
Deferred debt issuance costs are amortized through interest expense over the life of the debt securities. | |
Revenue Recognition | |
Our typical dayrate drilling contracts require our performance of a variety of services for a specified period of time. We determine progress towards completion of the contract by measuring efforts expended and the cost of services required to perform under a drilling contract, as the basis for our revenue recognition. Revenues generated from our dayrate basis drilling contracts and labor contracts are recognized on a per day basis as services are performed and begin upon the contract commencement, as defined under the specified drilling or labor contract. Dayrate revenues are typically earned, and contract drilling expenses are typically incurred ratably over the term of our drilling contracts. We review and monitor our performance under our drilling contracts to confirm the basis for our revenue recognition. Revenues from bonuses are recognized when earned. | |
It is typical in our dayrate drilling contracts to receive compensation and incur costs for mobilization, equipment modification, or other activities prior to the commencement of the contract. Any such compensation may be paid through a lump-sum payment or other daily compensation. Pre-contract compensation and costs are deferred until the contract commences. The deferred pre-contract compensation and costs are amortized, using the straight-line method, into income over the term of the initial contract period, regardless of the activity taking place. This approach is consistent with the economics for which the parties have contracted. Once a contract commences, we may conduct various activities, including drilling and well bore related activities, rig maintenance and equipment installation, movement between well locations or other activities. | |
Deferred revenues from drilling contracts totaled $9 million at December 31, 2014 as compared to $22 million at December 31, 2013. Such amounts are included in either “Other current liabilities” or “Other liabilities” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred revenues. Deferred costs associated with deferred revenues from drilling contracts totaled $2 million at December 31, 2014 as compared to $24 million at December 31, 2013. Such amounts are included in either “Prepaid and other current assets” or “Other assets” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred costs. | |
We record reimbursements from customers for “out-of-pocket” expenses as revenues and the related direct cost as operating expenses. | |
Income Taxes | |
We operate through various subsidiaries in numerous countries throughout the world. Due to our global presence, we are subject to tax laws, policies, treaties and regulations, as well as the interpretation or enforcement thereof, in the United Kingdom, the U.S., and any other jurisdictions in which we or any of our subsidiaries operate, are incorporated, or otherwise considered to have a tax presence. Our income tax expense is based upon our interpretation of the tax laws in effect in various countries at the time that the expense was incurred. If the taxing authorities do not agree with our assessment of the effects of such laws, policies, treaties and regulations, or the interpretation or enforcement thereof, this could have a material adverse effect on us including the imposition of a higher effective tax rate on our worldwide earnings or a reclassification of the tax impact of our significant corporate restructuring transactions. | |
The operations of our Predecessor have been included in certain income tax returns of Noble. The income tax provisions and related deferred tax assets and liabilities that have been reflected in our Predecessor’s historical combined financial statements have been computed as if our Predecessor were a separate taxpayer using the separate return method. As a result, actual tax transactions that would not have occurred had our Predecessor been a separate entity have been eliminated in the preparation of these consolidated and combined financial statements. Income taxes of our Predecessor include results of the operations of the standard specification drilling units. In instances where the operations of the standard specification drilling units of our Predecessor were included in the filing of a return with high specification units, an allocation of income taxes was made. | |
In certain jurisdictions, we have recognized deferred tax assets and liabilities. Judgment and assumptions are required in determining whether deferred tax assets will be fully or partially utilized. When we estimate that all or some portion of certain deferred tax assets such as net operating loss carryforwards will not be utilized, we establish a valuation allowance for the amount ascertained to be unrealizable. We continually evaluate strategies that could allow for future utilization of our deferred tax assets. Any change in the ability to utilize such deferred tax assets will be accounted for in the period of the event affecting the valuation allowance. If facts and circumstances cause us to change our expectations regarding future tax consequences, the resulting adjustments could have a material effect on our financial results or cash flow. | |
In certain circumstances, we expect that, due to changing demands of the offshore drilling markets and the ability to redeploy our offshore drilling units, certain units will not reside in a location long enough to give rise to future tax consequences. As a result, no deferred tax asset or liability has been recognized in these circumstances. Should our expectations change regarding the length of time an offshore drilling unit will be used in a given location, we will adjust deferred taxes accordingly. | |
Earnings/Loss per Share | |
Our unvested share-based payment awards, which contain non-forfeitable rights to dividends, are participating securities and are included in the computation of earnings per share pursuant to the “two-class” method. The “two-class” method allocates undistributed earnings between ordinary shares and participating securities; however, in a period of net loss, losses are not allocated to our participating securities. The diluted earnings per share calculation under the “two-class” method would also includes the dilutive effect of potential shares issued in connection with stock options. The dilutive effect of stock options would be determined using the treasury stock method. The diluted earnings per share calculation under the two class method is the same as our basic earnings per share calculation as we currently have no stock options or other potentially dilutive securities outstanding. | |
Share-Based Compensation Plans | |
We record the grant date fair value of share-based compensation arrangements as compensation cost using a straight-line method over the service period. Share-based compensation is expensed or capitalized based on the nature of the employee’s activities. | |
Certain Significant Estimates and Contingent Liabilities | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated and combined financial statements included elsewhere in this Annual Report on Form 10-K. | |
Reclassifications | |
Certain amounts in prior periods have been reclassified to conform to the current year presentation. |
Acquisition
Acquisition | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Acquisition | ACQUISITION | ||||||||
On November 17, 2014, Paragon acquired 89.3 million, or 94.4%, of the outstanding shares of Prospector Offshore Drilling S.A. (“Prospector”), an offshore drilling company organized in Luxembourg and traded on the Oslo Axess, from certain shareholders and in open market purchases for approximately $190 million in cash. In December 2014, we purchased an additional 4.1 million shares for approximately $10 million in cash, increasing our ownership to approximately 93.4 million shares, or 98.7%, of the outstanding shares of Prospector. On January 22, 2015, we settled a mandatory tender offer for additional outstanding shares, increasing our ownership to approximately 99.6% of the outstanding shares of Prospector. On February 23, 2015, we acquired all remaining issued and outstanding shares in Prospector pursuant to the laws of Luxembourg. We spent approximately $202 million in aggregate to acquire 100% of Prospector and funded the purchase of the shares of Prospector using proceeds from our revolving credit facility and cash on hand. | |||||||||
The Prospector acquisition expanded and enhanced our global fleet by adding two high specification jackups contracted to Total S.A. for use in the United Kingdom sector of the North Sea. In connection with our acquisition of Prospector, we acquired subsidiaries that contracted for the construction of three newbuild high specification jackup rigs by Shanghai Waigaoqiao Ship Co. Ltd. (“SWS”) in China. These rigs are currently scheduled for delivery in April 2015, September 2015 and March 2016, respectively. Each newbuild is being built pursuant to a contract between one of these subsidiaries and SWS, without a Paragon or Prospector parent company guarantee or other direct recourse to any other subsidiary of Paragon other than the applicable subsidiary. Prospector's results of operations are included in our results beginning on November 17, 2014. | |||||||||
Accounting for business combinations requires that the various assets acquired and liabilities assumed in a business combination be recorded at their respective fair values. The most significant estimates to us typically relate to acquired property and equipment. Deferred taxes are recorded for any differences between the fair value and tax basis of assets acquired and liabilities assumed. To the extent the purchase price plus the liabilities assumed (including deferred income taxes recorded in connection with the transaction) exceeds the fair value of the net assets acquired, we are required to record the excess as goodwill. As the fair value of assets acquired and liabilities assumed is subject to significant estimates and subjective judgments, the accuracy of this assessment is inherently uncertain. The following table summarizes our allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the acquisition date of November 17, 2014: | |||||||||
(In thousands) | Fair Value | ||||||||
ASSETS | |||||||||
Current assets | |||||||||
Accounts receivable | $ | 26,169 | |||||||
Restricted cash | 5,023 | ||||||||
Prepaid and other current assets | 17,967 | ||||||||
Total current assets | 49,159 | ||||||||
Property and equipment | 516,979 | ||||||||
Goodwill | 13,290 | ||||||||
Other assets | 25,520 | ||||||||
Total assets acquired | $ | 604,948 | |||||||
LIABILITIES | |||||||||
Current liabilities | |||||||||
Current maturities of long-term debt | $ | 32,970 | |||||||
Accounts payable | 16,227 | ||||||||
Accrued payroll and related costs | 3,754 | ||||||||
Taxes payable | 4,378 | ||||||||
Interest payable | 6,466 | ||||||||
Other current liabilities | 19,120 | ||||||||
Total current liabilities | 82,915 | ||||||||
Long-term debt | 333,697 | ||||||||
Other liabilities | 456 | ||||||||
Total liabilities assumed | $ | 417,068 | |||||||
Accumulated other comprehensive loss | (40 | ) | |||||||
Non-controlling interest | 11,351 | ||||||||
Purchase price, net of cash acquired | $ | 176,569 | |||||||
The fair value of cash and cash equivalents, accounts receivable, other current assets, accounts payable and other current liabilities was generally determined using historical carrying values given the short-term nature of these items. The fair values of drilling equipment and in-place contracts were determined using management’s estimates of future net cash flows. Such estimated future cash flows were discounted at an appropriate risk-adjusted rate of return. The fair values of the consolidated derivatives were determined based on a discounted cash flow model utilizing an appropriate market or risk-adjusted yield. The fair value of other assets and other liabilities, related to long-term tax items, was derived using estimates made by management. Fair value estimates for in-place contracts are recorded in “Prepaid and other current assets” and “Other assets” in our consolidated and combined balance sheet and will be amortized over the life of the respective contract. The average life of these contracts totaled approximately 2.5 years as of the date of the acquisition. | |||||||||
Our purchase price allocation is preliminary. The preliminary allocation of the purchase consideration is based on management's estimates, judgments and assumptions. These estimates, judgments and assumptions are subject to change upon final valuation and should be treated as preliminary values. Management estimated that consideration paid exceeds the fair value of the net assets acquired. Therefore, goodwill of $13 million was recorded. The final allocation of purchase consideration could include changes in the estimated fair value of income tax obligations. | |||||||||
As of December 31, 2014, we have incurred $4 million in acquisition costs related to the Prospector acquisition. These costs have been expensed and are included in contract drilling services expense. | |||||||||
The following unaudited pro forma financial information for the year ended December 31, 2014 and 2013, gives effect to the Prospector acquisition as if it had occurred at the beginning of the periods presented. The pro forma financial information for the year ended December 31, 2014 includes pro forma results for the period prior to the closing date of November 17, 2014 and actual results for the period from November 17, 2014 through December 31, 2014. The pro forma results are based on historical data and are not intended to be indicative of the results of future operations. | |||||||||
(In thousands, except per share amounts) | 2014 | 2013 | |||||||
Total operating revenues | $ | 42,456 | $ | 4,200 | |||||
Net loss | (55,802 | ) | (16,050 | ) | |||||
Net loss to Paragon Offshore | (55,054 | ) | (15,835 | ) | |||||
Loss per share (basic and diluted) | $ | (0.65 | ) | $ | (0.19 | ) | |||
Revenues from the Prospector rigs totaled $8 million from the closing date of November 17, 2014 through December 31, 2014. Operating expenses for this same period totaled $8 million for the Prospector rigs. |
EarningsLoss_Per_Share
Earnings/Loss Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Earnings/Loss Per Share | EARNINGS/LOSS PER SHARE | ||||||||||||
Our outstanding share-based payment awards currently consist solely of restricted stock units. These unvested restricted stock units, which contain non-forfeitable rights to dividends, are participating securities and are included in the computation of earnings per share pursuant to the “two-class” method. The “two-class” method allocates undistributed earnings between ordinary shares and participating securities; however, in a period of net loss, losses are not allocated to our participating securities. | |||||||||||||
On August 1, 2014, approximately 85 million of our ordinary shares were distributed to Noble’s shareholders in conjunction with the Spin-Off. Weighted average shares outstanding, basic and diluted, has been computed based on the weighted average number of ordinary shares outstanding during the applicable period. Restricted stock units do not represent ordinary shares outstanding until they are vested and converted into ordinary shares. The diluted earnings per share calculation under the two class method is the same as our basic earnings per share calculation as we currently have no stock options or other potentially dilutive securities outstanding. | |||||||||||||
No earnings were allocated to unvested share-based payment awards in our earnings per share calculation for the year ended December 31, 2014 due to our net loss in the current year. Our basis of presentation related to weighted average unvested shares outstanding for all periods prior to the Spin-Off does not include our unvested restricted stock units that were granted to our employees in conjunction with Paragon's 2014 Employee Omnibus Incentive Plan. As a result, we also have no earnings allocated to unvested share-based payment awards in our earnings per share calculation for periods prior to the Spin-Off. | |||||||||||||
The following table sets forth the computation of basic and diluted net income and earnings (loss) per share: | |||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands, except per share amounts) | 2014 | 2013 | 2012 | ||||||||||
Allocation of income - basic and diluted | |||||||||||||
Net income (loss) attributable to Paragon | $ | (646,746 | ) | $ | 360,305 | $ | 126,237 | ||||||
Earnings allocated to unvested share-based payment awards | — | — | — | ||||||||||
Net income (loss) to ordinary shareholders - Basic and diluted | $ | (646,746 | ) | $ | 360,305 | $ | 126,237 | ||||||
Weighted average shares outstanding | |||||||||||||
Basic and diluted | 84,753 | 84,753 | 84,753 | ||||||||||
Earnings (loss) per share | |||||||||||||
Basic and diluted | $ | (7.63 | ) | $ | 4.25 | $ | 1.49 | ||||||
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||
Share-Based Compensation | SHARE-BASED COMPENSATION | ||||||||||||||
Predecessor Plan | |||||||||||||||
For all periods prior to the Spin-Off, our Predecessor was managed in the normal course of business by Noble and its subsidiaries. Noble provides a stock-based compensation plan that is granted and settled in stock of Noble. The Noble plan permits the granting of various types of awards including stock options and restricted stock units. Prior to the Spin-off and to the extent that Company employees participated in these programs, the results of our Predecessor were allocated a portion of the associated expenses (see Note 16, “Related Parties (Including Relationship with Parent and Corporate Allocations)” for total costs allocated to us by Noble). | |||||||||||||||
Paragon employees’ participation in Noble’s 1991 Stock Option and Restricted Stock Plan (“Noble 1991 Plan”) was terminated as of our Separation from Noble at the time of the Distribution. The Noble 1991 Plan provided for the granting of options to purchase Noble shares and the awarding of restricted stock units in the form of both time-vested restricted stock units (“TVRSU’s”) and performance-vested restricted stock units (“PVRSU’s”). | |||||||||||||||
Upon termination in Noble’s 1991 Plan, our employees’ rights to exercise Noble stock options continues for up to the shorter of five years or the remaining term of the option and the vesting of each option was accelerated so that each option is now fully vested. Paragon has no outstanding stock option grants as of December 31, 2014 under this arrangement. | |||||||||||||||
All Noble TVRSU’s held by our employees under the Noble 1991 Plan were canceled at the Distribution. At the time of the Distribution, Paragon granted 2,675,839 TVRSU’s that were intended to be of equivalent value and remaining duration at the time with regard to such canceled awards. | |||||||||||||||
With respect to outstanding Noble PVRSU’s held by our employees under the Noble 1991 Plan, a portion of such PVRSU’s continues to be held by those employees and a portion has been canceled. This apportionment was based on the performance cycle that relates to each applicable Noble performance-vested restricted stock unit award, and the ratio of the number of months remaining in the award’s performance cycle after our Separation from Noble relative to the total number of months (i.e., 36 months) of such performance cycle. This ratio has been applied to each applicable grant of Noble PVRSU’s to determine the portion thereof that were canceled, the remainder of which were continued. With regard to the canceled portion of Noble PVRSU’s, we either granted the affected employee Paragon PVRSU’s that were intended to be of equivalent value and duration at the time of grant to the canceled portion of the Noble award, or provided the employee compensation of equivalent value to the benefit the employee would have received had the canceled portion of the Noble awards remained in effect. At the time of the Distribution, Paragon granted 277,118 PVRSU’s that were intended to be of equivalent value and remaining duration with regard to the canceled portion. | |||||||||||||||
Paragon Plans | |||||||||||||||
With respect to the cancellations described above, we have adopted new equity incentive plans for our employees and directors to administer replacement awards of Paragon TVRSU’s and PVRSU’s, as well as to provide for the granting of new awards for the periods following our Separation from Noble. On June 30, 2014, our board of directors at the time adopted the Paragon Offshore plc 2014 Employee Omnibus Incentive Plan (the “Employee Plan”), which was approved by Noble as Paragon Offshore’s sole stockholder on July 15, 2014 and became effective as of the date of the Distribution. Subject to certain adjustments, up to 8,475,340, or 10% of the number of Paragon Offshore’s outstanding shares at the time of the Distribution, were authorized under our Employee Plan for issuance to eligible participants in the form of stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards. On June 30, 2014, our board of directors at the time also adopted the Paragon Offshore plc 2014 Director Omnibus Plan (the “Director Plan”), which was approved by Noble as Paragon Offshore’s sole stockholder on July 15, 2014 and became effective as of the date of the Distribution. The maximum number of Paragon Offshore ordinary shares that may be subject to awards granted under the Director Plan is 500,000 shares, subject to certain adjustments. The Director Plan provides that our board of directors may award stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards to directors as it may determine from time to time. | |||||||||||||||
Shares available for issuance and outstanding restricted stock units for our two stock incentive plans as of December 31, 2014 are as follows: | |||||||||||||||
(In shares) | Employee Plan | Director Plan | |||||||||||||
Shares available for future awards or grants | 4,719,570 | 240,258 | |||||||||||||
Outstanding unvested restricted stock units | 3,755,770 | 259,742 | |||||||||||||
As noted above, we have awarded both TVRSU’s and PVRSU’s under our Employee Plan and TVRSU's under our Director Plan. The TVRSU’s generally vest over a three year period. The number of PVRSU’s which vest will depend on the degree of achievement of specified corporate performance criteria over the service period. | |||||||||||||||
Our TVRSU's are valued on the date of award at our underlying share price. The total compensation for units that ultimately vest is recognized over the service period. The shares and related nominal value are recorded when the restricted stock unit vests and additional paid-in capital is adjusted as the share-based compensation cost is recognized for financial reporting purposes. | |||||||||||||||
Our PVRSU's are valued on the date of award at our underlying share price. Total compensation cost recognized for our PVRSU's depends on an accounting-based performance measure, return on capital employed (“ROCE”) over specified performance periods. Estimated compensation cost is determined based on numerous assumptions, including an estimate of the likelihood that our ROCE will achieve the targeted thresholds and forfeiture of the PVRSU's based on annualized ROCE performance over the terms of the awards. | |||||||||||||||
A summary of restricted stock activity for the year ended December 31, 2014 is as follows: | |||||||||||||||
TVRSU's Outstanding | Weighted | PVRSU's | Weighted | ||||||||||||
Average | Outstanding (1) | Average | |||||||||||||
Award-Date | Award-Date | ||||||||||||||
Fair Value | Fair Value | ||||||||||||||
Outstanding at August 1, 2014 | — | $ | — | — | $ | — | |||||||||
Awarded | 3,894,601 | 10.54 | 277,118 | 11 | |||||||||||
Vested | — | — | — | — | |||||||||||
Forfeited | (140,835 | ) | 10.7 | (15,372 | ) | 11 | |||||||||
Outstanding at December 31, 2014 | 3,753,766 | $ | 10.54 | 261,746 | $ | 11 | |||||||||
-1 | The number of PVRSU’s shown equals the units that would vest if the “maximum” level of performance is achieved. The minimum number of units is zero and the “target” level of performance is 50% of the amounts shown. | ||||||||||||||
Share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as compensation cost using a straight-line method over the service period. Share-based amortization recognized during the five months ended December 31, 2014, not including amounts allocated to our Predecessor, totaled $7.7 million. At December 31, 2014, there was $26 million of total unrecognized compensation cost related to our TVRSU’s which is expected to be recognized over a remaining weighted-average period of 1.8 years. At December 31, 2014, there was $1 million of total unrecognized compensation cost related to our PVRSU’s which is expected to be recognized over a remaining weighted-average period of 1.7 years. The total potential compensation for our PVRSU’s is recognized over the service period regardless of whether the performance thresholds are ultimately achieved. |
Property_and_Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT |
Property and equipment is stated at cost. Interest incurred related to property under construction including major overhaul, improvement and asset replacement projects is capitalized as a component of construction costs. Interest capitalized in our Predecessor’s results relates to Noble’s revolving credit facilities and commercial paper program, while interest capitalized in Paragon’s results relates to our Senior Notes and Term Loan Facility (each as defined in Note 7, “Debt”). Our capital expenditures, including capitalized interest, totaled $262 million for the year ended December 31, 2014, as compared to historical Predecessor capitalized expenditures, including capitalized interest, of $366 million for the year ended December 31, 2013. | |
Interest expense capitalized in these consolidated and combined financial statements for the year ended December 31, 2014 was $3 million, as compared to Predecessor capitalized interest of $6 million for the year ended December 31, 2013. | |
Loss on Impairment | |
We evaluate the impairment of property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, on an annual basis, we complete an impairment analysis on all of our rigs. An impairment loss on our property and equipment exists when the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized represents the excess of the asset’s carrying value over the estimated fair value. As part of this analysis, we make assumptions and estimates regarding future market conditions. To the extent actual results do not meet our estimated assumptions, we may take an impairment loss in the future. | |
During 2014, we identified indicators of impairment, including lower crude oil prices, a decrease in contractual activities particularly for floating rigs, and resultant projected declines in dayrates and utilization. We concluded that a triggering event occurred requiring us to perform an impairment analysis of our fleet of drilling rigs. We compared the net book value of our drilling rigs to the relative recoverable value, which was determined using an undiscounted cash flow analysis. As a result of this analysis, we determined that the Paragon DPDS1, Paragon DPDS2 and Paragon DPDS3 drilling rigs were impaired. We calculated the fair value of these drilling rigs after considering quotes from rig brokers, a cost approach and an income approach, which utilized significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to estimated dayrate revenue, rig utilization and anticipated costs for the remainder of the rigs’ useful lives. Additionally, we decided to scrap the Paragon FPSO1, Paragon MSS3, Paragon B153 and Paragon DPDS4. We recognized an impairment on these units after we determined the fair values based on quotes from brokers, price indications from potential interested buyers, and estimates of salvage values. Based on the above analysis, our estimates of fair value resulted in the recognition of an impairment loss of $1.1 billion for the year ended December 31, 2014, of which $130 million was recognized in the fourth quarter of 2014. | |
During 2013, our Predecessor determined that the Paragon FPSO, formerly the Noble Seillean, was partially impaired as a result of it's annual impairment test and the current market outlook for this unit. Our Predecessor estimated the fair value of this unit by considering both income and market-based valuation approaches utilizing statistics for comparable rigs (Level 2 fair value measurement). Based on these estimates, our Predecessor recognized a charge of $40 million for the year ended December 31, 2013. | |
Also in 2013, our Predecessor recorded an impairment charge on two cold stacked submersible rigs. These rigs had been impaired in 2011 due to the declining market outlook for drilling services for that rig type; however, in 2013 an additional impairment charge of approximately $4 million was recorded as a result of the potential disposition of these assets to an unrelated third party. These submersible rigs were sold by our Predecessor in January 2014. | |
Gain on Disposal of Assets, net | |
During the third quarter of 2013, our Predecessor completed the sale of the Noble Lewis Dugger for $61 million to an unrelated third party in Mexico. In connection with the sale, our Predecessor recorded a pre-tax gain of approximately $36 million. |
Debt
Debt | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt | DEBT | ||||||||
A summary of long-term debt at December 31, 2014 and 2013 is as follows: | |||||||||
December 31, | December 31, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Senior Notes due 2022, bearing fixed interest at 6.75% per annum | $ | 457,572 | $ | — | |||||
Senior Notes due 2024, bearing fixed interest at 7.25% per annum | 537,010 | — | |||||||
Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | 645,357 | — | |||||||
Revolving Credit Facility | 154,000 | — | |||||||
Prospector 2019 Second Lien Callable Bond | 101,000 | — | |||||||
Prospector 2018 Senior Secured Credit Facility | 265,666 | — | |||||||
Noble Credit Facilities / Commercial Paper Program | — | 1,561,141 | |||||||
Less: Current maturities of long-term debt | (272,166 | ) | — | ||||||
$ | 1,888,439 | $ | 1,561,141 | ||||||
Predecessor Debt | |||||||||
Our Predecessor was supported by Noble’s three separate credit facilities which had an aggregate maximum available capacity of $2.9 billion (collectively, the “Noble Credit Facilities”). Predecessor long-term debt consisted of the amount drawn on the Noble Credit Facilities. Noble established a commercial paper program, which allowed Noble to issue up to $2.7 billion in unsecured commercial paper notes. Amounts issued under the commercial paper program were supported by the unused capacity under the Noble Credit Facilities. The outstanding amounts of commercial paper reduce availability under the Noble Credit Facilities. | |||||||||
As discussed below, Noble received approximately $1.7 billion in cash as settlement of intercompany notes in connection with the Separation. Noble used these proceeds to repay amounts outstanding under its commercial paper program. Accordingly, debt that is included in our Predecessor’s combined financial statements represents the amounts outstanding under Noble’s commercial paper program, and has been pushed down to our Predecessor in accordance with guidance of the SEC. The remaining outstanding debt not repaid from our Predecessor’s debt at the time of the settlement of the intercompany notes is considered as part of “Net parent investment” in our Predecessor. | |||||||||
Paragon Debt | |||||||||
On June 17, 2014, we entered into a senior secured revolving credit agreement with lenders that provided commitments in the amount of $800 million (the “Revolving Credit Facility”). The Revolving Credit Facility has a term of five years after the funding date. Borrowings under the Revolving Credit Facility bear interest, at our option, at either (i) an adjusted London Interbank Offered Rate (“LIBOR”), plus an applicable margin ranging between 1.50% to 2.50%, depending on our leverage ratio, or (ii) a base rate plus an applicable margin ranging between 1.50% to 2.50%. Under the Revolving Credit Facility, we may also obtain up to $800 million of letters of credit. Issuance of letters of credit under the Revolving Credit Facility would reduce a corresponding amount available for borrowing. As of December 31, 2014, we had $154 million in borrowings outstanding at a weighted-average interest rate of 2.89%. There was an aggregate amount of $12 million of letters of credit issued under the Revolving Credit Facility. | |||||||||
On July 18, 2014, we issued $1.08 billion of senior notes (the “Senior Notes”) and also borrowed $650 million under a term loan facility (the “Term Loan Facility”). The Term Loan Facility is secured by all but three of our rigs. The proceeds from the Term Loan Facility and the Senior Notes were used to repay $1.7 billion of intercompany indebtedness to Noble incurred as partial consideration for the Separation. The Senior Notes consisted of $500 million of 6.75% senior notes and $580 million of 7.25% senior notes, which mature on July 15, 2022 and August 15, 2024, respectively. The Senior Notes were issued without an original issue discount. Borrowings under the Term Loan Facility bear interest at an adjusted LIBOR rate plus 2.75%, subject to a minimum LIBOR rate of 1% or a base rate plus 1.75%, at our option. We are required to make quarterly principal payments of $1.6 million and may prepay all or a portion of the term loans at any time. The Term Loan Facility matures in July 2021. The loans under the Term Loan Facility were issued with 0.5% original issue discount. | |||||||||
In connection with the issuance of the aforementioned debt, we and our Predecessor incurred $35 million of issuance costs. | |||||||||
The covenants and events of default under our Revolving Credit Facility, Senior Notes, and Term Loan Facility are substantially similar. The agreements governing these obligations contain covenants that place restrictions on certain merger and consolidation transactions; our ability to sell or transfer certain assets; payment of dividends; making distributions; redemption of stock; incurrence or guarantee of debt; issuance of loans; prepayment; redemption of certain debt; as well as incurrence or assumption of certain liens. In addition to these covenants, the Revolving Credit Facility includes a covenant requiring us to maintain a net leverage ratio (defined as total debt, net of cash and cash equivalents, divided by earnings excluding interest, taxes, depreciation and amortization charges) less than 4.00 to 1.00 and a covenant requiring us to maintain a minimum interest coverage ratio (defined as interest expense divided by earnings excluding interest, taxes, depreciation and amortization charges) greater than 3.00 to 1.00. As of December 31, 2014, we were in compliance with the covenants under our Revolving Credit Facility by maintaining a net leverage ratio of 2.0 and an interest coverage ratio of 8.3 (these calculations do not include the corresponding financial information from Prospector, which has been designated as a unrestricted subsidiary for purposes of our debt agreements). The impairment charge taken in the current quarter does not impact our debt covenant calculations because it is a non-cash charge and is excluded from our covenant calculations. | |||||||||
During the year ended December 31, 2014, we repurchased and canceled an aggregate principal amount of $85 million of our Senior Notes at an aggregate cost of $67 million including accrued interest. The repurchases consisted of $42 million aggregate principal amount of our 6.75% senior notes due July 2022 and $43 million aggregate principal amount of our 7.25% senior notes due August 2024. As a result of the repurchases, we recognized a total gain on debt retirement, net of the write-off of issuance costs, of approximately $19 million in “Gain on repurchase of long-term debt.” All Senior Note repurchases were made using available cash balances. | |||||||||
Subsequent to December 31, 2014, we repurchased and canceled an additional aggregate principal amount of $11 million of our Senior Notes at an aggregate cost of $7 million including accrued interest. The repurchases consisted of $1 million aggregate principal amount of our 6.75% senior notes due 2022 and $10 million aggregate principal amount of our 7.25% senior notes due 2024. | |||||||||
Prospector Debt | |||||||||
At the time of our acquisition of Prospector, Prospector had the following outstanding debt instruments: (i) 2019 Second Lien Callable Bond of $100 million (“Prospector Bonds”) and (ii) 2018 Senior Secured Credit Facility of $270 million (“Prospector Senior Credit Facility”). | |||||||||
The Prospector Bonds were originally entered into by a subsidiary of Prospector on May 19, 2014 in the Oslo Alternative Bond Market. The Prospector Bonds had a fixed interest rate of 7.75% per annum, payable semi-annually on December 19 and June 19 each year and maturity of June 19, 2019. The Prospector Bonds were secured by a second priority mortgage on Prospector 1 and Prospector 5 and guaranteed by Prospector S.A. and certain subsidiaries. The Prospector Bonds have a provision that allows the bondholders to put their bonds back to Prospector at a price of 101% of the par value upon a Change of Control event. The put provision was triggered by our acquisition of a controlling interest in Prospector on November 17, 2014. Subsequent to December 31, 2014, the bondholders put $99.6 million par value of their bonds back to Prospector at the put price of 101% of par plus accrued interest. We funded the repayment of the debt using borrowings from our Revolving Credit Facility and available cash. The outstanding Prospector Bonds balance at December 31, 2014 was $101 million. | |||||||||
The Prospector Senior Credit Facility was originally entered into by a subsidiary of Prospector on June 12, 2014 with a group of lenders. The Prospector Senior Credit Facility comprises a $140 million Prospector 5 tranche and a $130 million Prospector 1 tranche which were both fully drawn at the time of acquisition. At December 31, 2014, $140 million and $126 million were outstanding on the Prospector 5 and Prospector 1 tranches, respectively. | |||||||||
The Prospector Senior Credit Facility is secured by a first priority mortgage on Prospector 1 and Prospector 5, and guaranteed by Prospector Offshore Drilling S.A. and certain subsidiaries. The Prospector Senior Credit Facility bears interest at LIBOR plus a margin of 3.5%. Prospector is required to hedge at least 50% of the Prospector Senior Credit Facility against fluctuations in the interest rate. As of December 31, 2014, interest rate swaps fix the interest on approximately $133 million of outstanding borrowings under the Prospector Senior Credit Facility. Under the swaps, Prospector pays a fixed interest rate of 1.512% and receives the three-month LIBOR rate. The Prospector Senior Credit Facility has certain financial covenants with which we are required to comply and test on a twelve month rolling basis commencing six months following the acceptance of Prospector 5 by Total S.A. This acceptance occurred in December 2014. | |||||||||
In addition to quarterly interest payments, the Prospector 1 tranche and the Prospector 5 tranche require quarterly principal repayments which commenced in October 2014 and January 2015, respectively. The remaining balance of the Prospector Senior Credit Facility is due in full in December 2018. The lenders under the Prospector Senior Credit Facility do not have recourse to Paragon for repayment of the loan. | |||||||||
The Prospector Senior Credit Facility also includes a Change of Control provision whereby the lenders can require us to prepay the outstanding principal balance and accrued interest. On February 13, 2015, the lenders under the Prospector Senior Credit Facility temporarily waived this prepayment requirement until March 16, 2015. We are currently in discussions with these lenders to permanently waive this requirement. However, we can provide no assurance that we will reach an agreement with the lenders prior to such date. If we are unable to do so, we will be required to repay in full the remaining principal balance outstanding under the Prospector Senior Credit Facility. We intend to use cash on hand and borrowings under our Revolving Credit Facility. | |||||||||
Fair Value of Debt | |||||||||
Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated fair values of our Senior Notes and Term Loan Facility were based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities (Level 2 measurement). The fair value of our Prospector Bonds were based on the put price as per the change of control considerations in the bond agreement. | |||||||||
The following table presents the estimated fair value of our long-term debt as of December 31, 2014: | |||||||||
December 31, 2014 | |||||||||
(In thousands) | Carrying Value | Estimated Fair Value | |||||||
Senior unsecured notes: | |||||||||
6.75% Senior Notes due July 15, 2022 | $ | 457,572 | $ | 275,115 | |||||
7.25% Senior Notes due August 15, 2024 | 537,010 | 319,521 | |||||||
Total senior unsecured notes | $ | 994,582 | $ | 594,636 | |||||
Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | $ | 645,357 | $ | 523,250 | |||||
Prospector 2019 Second Lien Callable Bond | $ | 101,000 | $ | 101,000 | |||||
The carrying amounts of our variable-rate debt, the Revolving Credit Facility and the Prospector Senior Credit Facility, approximate fair value because such debt bears short-term, market-based interest rates. We have classified these instruments as Level 2 as valuation inputs used for purposes of determining our fair value disclosure are readily available published LIBOR rates. |
Gain_on_Contract_SettlementsEx
Gain on Contract Settlements/Extinguishment, Net | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Gain on Contract Settlements/Extinguishment, Net | GAIN ON CONTRACT SETTLEMENTS/EXTINGUISHMENT, NET | |||
During the third quarter of 2013, Noble received $45 million related to the settlement of all claims against the former investors of FDR Holdings, Ltd., which Noble acquired in July 2010, relating to alleged breaches of various representations and warranties contained in the purchase agreement. A portion of the settlement related to standard specification rigs. This portion, totaling $23 million, was pushed down to our Predecessor in 2013, through an allocation, using the acquired rig values of the purchased rigs. | ||||
During the fourth quarter of 2012, our Predecessor received a deposit of $2 million related to the potential sale of one of our drilling units to an unrelated third party. During the first quarter of 2013 negotiations led to the sale not being completed and the deposit was recognized as a gain. | ||||
During the second quarter of 2012, our Predecessor received $5 million from the settlement of a claim relating to the Noble David Tinsley, which experienced a “punch-through” while being positioned on location in 2009. | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Operating Leases | ||||
Future minimum lease payments for operating leases for years ending December 31 are as follows (in thousands): | ||||
2015 | $ | 14,734 | ||
2016 | $ | 10,871 | ||
2017 | $ | 4,494 | ||
2018 | $ | 2,596 | ||
2019 | $ | 2,032 | ||
Thereafter | $ | 3,462 | ||
Total rent expense under operating leases was approximately $16 million for the year ended December 31, 2014. | ||||
Purchase Commitments | ||||
At December 31, 2014, our purchase commitments which consist of obligations outstanding to external vendors primarily related to future capital purchases, were as follows (in thousands): | ||||
2015 | $ | 454,098 | ||
2016 | $ | 199,161 | ||
Litigation | ||||
We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, the resolution of which, in the opinion of management, will not have a material adverse effect on our financial position, results of operations or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims. | ||||
Other Contingencies | ||||
We have received tax audit claims of approximately $267 million, of which $50 million is subject to indemnity by Noble, primarily in Mexico and Brazil, attributable to our income, customs and other business taxes. In addition, approximately $37 million of tax audit claims attributable to Mexico assessed against Noble may be allocable to us as a result of the Spin-Off. We have contested, or intend to contest, these assessments, including through litigation if necessary. Tax authorities may issue additional assessments or pursue legal actions as a result of tax audits, and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions. In some cases we will be required to post a surety bond or a letter of credit as collateral to defend us. Although we have no surety bonds or letters of credit associated with tax audit claims outstanding as of December 31, 2014, we could be required to post collateral against our Mexico assessments during 2015, which could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows. | ||||
In addition, Petróleo Brasileiro S.A. (“Petrobras”) has notified us, along with other industry participants, that it is currently challenging assessments by Brazilian tax authorities of withholding taxes associated with the provision of drilling rigs for its operations in Brazil during the years 2008 and 2009 totaling $106 million, of which $30 million is subject to indemnity by Noble. Petrobras has also notified us that if they must pay such withholding taxes, they will seek reimbursement from us. We believe that we are contractually indemnified by Petrobras for these amounts and dispute the validity of the assessment. We have notified Petrobras of our position. We will, if necessary, vigorously defend our rights. If we were required to pay such reimbursement, however, the amount of such reimbursement could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows. | ||||
In January 2015, a subsidiary of Noble received an unfavorable ruling from the Mexican Supreme Court on a tax depreciation position claimed in periods prior to the Spin-Off. Although the ruling does not constitute mandatory jurisprudence in Mexico, it does create potential indemnification exposure for us under the tax sharing agreement. Noble is the primary obligor to the Mexican tax authorities and, to our understanding, has yet to decide on a course of action in this matter, which could include an appeal against this ruling. As a result, while we are in discussions with Noble, we are presently unable to determine next steps or a timeline on this matter; nor are we able to determine the extent of our liability. We have considered this matter under ASC 460, Guarantees, and concluded that our liability under this matter is reasonably possible. Due to these current uncertainties, we are not able to reasonably estimate a loss at this time. | ||||
Insurance | ||||
In connection with the Separation, we replaced our Predecessor’s insurance policies, which were supported by Noble, with substantially similar standalone insurance policies. We maintain certain insurance coverage against specified marine perils, which included physical damage and loss of hire. Damage caused by hurricanes has negatively impacted the energy insurance market, resulting in more restrictive and expensive coverage for named windstorm perils. | ||||
We maintain insurance in the geographic areas in which we operate, although pollution, reservoir damage and environmental risks generally are not fully insurable. Our insurance policies and contractual rights to indemnity may not adequately cover our losses or may have exclusions of coverage for some losses. We do not have insurance coverage or rights to indemnity for all risks, including loss of hire insurance on most of the rigs in our fleet. Uninsured exposures may include expatriate activities prohibited by U.S. laws and regulations, radiation hazards, certain loss or damage to property on board our rigs and losses relating to shore-based terrorist acts or strikes. If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity, it could materially adversely affect our financial position, results of operations or cash flows. Additionally, there can be no assurance that those parties with contractual obligations to indemnify us will necessarily be financially able to indemnify us against all these risks. | ||||
Capital Expenditures | ||||
In connection with our capital expenditure program, we have outstanding commitments, including shipyard and purchase commitments of approximately $653 million at December 31, 2014. | ||||
Other | ||||
At December 31, 2014, we had letters of credit of $21 million and performance bonds totaling $110 million supported by surety bonds outstanding. Certain of our subsidiaries issued guarantees to the temporary import status of rigs or equipment imported into certain countries in which we operated. These guarantees are issued in lieu of payment of custom, value added or similar taxes in those countries. | ||||
Separation Agreements | ||||
In connection with the Spin-off, on July 31, 2014, we entered into several definitive agreements with Noble or its subsidiaries that, among other things, set forth the terms and conditions of the Spin-Off and provide a framework for our relationship with Noble after the Spin-off, including the following agreements: | ||||
• | Master Separation Agreement; | |||
• | Tax Sharing Agreement; | |||
• | Employee Matters Agreement; | |||
• | Transition Services Agreement relating to services Noble and Paragon will provide to each other on an interim basis; and | |||
• | Transition Services Agreement relating to Noble’s Brazil operations. | |||
Pursuant to these agreements with Noble, the consolidated and combined balance sheet consists of the following balances due from and to Noble as of December 31, 2014 (in thousands): | ||||
Balance Sheet Position | Amount | |||
Other current assets | $ | 26,386 | ||
Other assets | 6,875 | |||
Due from Noble | $ | 33,261 | ||
Accounts payable | $ | 1,655 | ||
Other current liabilities | 51,169 | |||
Other liabilities | 23,563 | |||
Due to Noble | $ | 76,387 | ||
These receivables and payables primarily relate to rights and obligations under the Tax Sharing Agreement. | ||||
Master Separation Agreement | ||||
On July 31, 2014, we entered into a Master Separation Agreement with Noble Corporation, a Cayman Islands company and an indirect, wholly-owned subsidiary of Noble (“Noble-Cayman”), which provided for, among other things, the Distribution of our ordinary shares to Noble shareholders and the transfer to us of the assets and the assumption by us of the liabilities relating to our business and the responsibility of Noble for liabilities related to Noble’s, and in certain limited cases, our business. The Master Separation Agreement identified which assets and liabilities constitute our business and which assets and liabilities constitute Noble’s business. | ||||
Tax Sharing Agreement | ||||
On July 31, 2014, we entered into a Tax Sharing Agreement with Noble, which governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes following the Distribution. | ||||
Employee Matters Agreement | ||||
On July 31, 2014, we entered into an Employee Matters Agreement with Noble-Cayman to allocate liabilities and responsibilities relating to our employees and their participation in certain compensation and benefit plans maintained by Noble or a subsidiary of Noble. The Employee Matters Agreement provides that, following the Distribution, most of our employee benefits are provided under compensation and benefit plans adopted or assumed by us. In general, our plans are substantially similar to the plans of Noble or its subsidiaries that covered our employees prior to the completion of the Distribution. The Employee Matters Agreement also addresses the treatment of outstanding Noble equity awards held by transferring employees, including the grant of our equity awards or other rights with respect to Noble equity awards held by transferring employees that were canceled in connection with the Spin-Off. | ||||
Transition Services Agreement | ||||
On July 31, 2014, we entered into a Transition Services Agreement with Noble-Cayman pursuant to which Noble-Cayman provides, on a transitional basis, certain administrative and other assistance, generally consistent with the services that Noble provided to us before the separation, and we provide certain transition services to Noble and its subsidiaries. The charges for the transition services are generally intended to allow the party providing the services to fully recover the costs directly associated with providing the services, plus all out-of-pocket costs and expenses, generally without profit. The charges for each of the transition services generally are based on either a pre-determined flat fee or an allocation of the costs incurred, including certain fees and expenses of third-party service providers. | ||||
Transition Services Agreement (Brazil) | ||||
On July 31, 2014, we and Noble-Cayman and certain other subsidiaries of Noble entered into a Transition Services Agreement (and a related rig charter) pursuant to which we will provide certain transition services to Noble and its subsidiaries in connection with Noble’s Brazil operations. We will continue to provide both rig-based and shore-based support services in respect of Noble’s remaining business through the term of Noble’s existing rig contracts. Noble currently has one rig operating in Brazil. Noble-Cayman will compensate us on a cost-plus basis for providing such services and also indemnify us for liabilities arising out of the services agreement. This agreement will terminate when the last of the Noble semisubmersibles working in Brazil finish the existing contract, which is expected to occur in 2016. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | INCOME TAXES | ||||||||||||
The operations of our Predecessor have been included in certain income tax returns of Noble. The income tax provisions and related deferred tax assets and liabilities that have been reflected in our Predecessor’s historical combined financial statements have been computed as if our Predecessor were a separate taxpayer using the separate return method. As a result, actual tax transactions that would not have occurred had our Predecessor been a separate entity have been eliminated in the preparation of these consolidated and combined financial statements. Income taxes of our Predecessor include results of the operations of the standard specification drilling units. In instances where the operations of the standard specification drilling units of our Predecessor were included in the filing of a return with high specification units, an allocation of income taxes was made. | |||||||||||||
We operate through various subsidiaries in numerous countries throughout the world. Consequently, income taxes have been based on the laws and rates in effect in the countries in which operations are conducted, or in which we and our subsidiaries or our Predecessor and its subsidiaries were incorporated or otherwise considered to have a taxable presence. The change in the effective tax rate from period to period is primarily attributable to changes in the profitability mix of our operations in various jurisdictions. Because our operations continually change among numerous jurisdictions, and methods of taxation in these jurisdictions vary greatly, there is little direct correlation between the income tax provision and income before taxes. | |||||||||||||
Income before income taxes consists of the following: | |||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
United States | $ | 70,949 | $ | 114,314 | $ | 65,574 | |||||||
Non-U.S. | (648,360 | ) | 331,596 | 109,351 | |||||||||
Total | $ | (577,411 | ) | $ | 445,910 | $ | 174,925 | ||||||
The income tax provision consists of the following: | |||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Current - United States | $ | 45,754 | $ | 20,732 | $ | 14,637 | |||||||
Current - Non-U.S. | 43,115 | 55,691 | 49,108 | ||||||||||
Deferred - United States | (30,391 | ) | 13,425 | (13,179 | ) | ||||||||
Deferred - Non-U.S. | 10,916 | (4,243 | ) | (1,878 | ) | ||||||||
Total | $ | 69,394 | $ | 85,605 | $ | 48,688 | |||||||
We conduct business globally and, as a result, we file numerous income tax returns, or are subject to withholding taxes, in various jurisdictions. In the normal course of business we are generally subject to examination by taxing authorities throughout the world. With few exceptions, we are no longer subject to examinations of tax matters for years prior to 1999. | |||||||||||||
Our effective tax rate for the year ended December 31, 2014 was approximately -12%, on a pre-tax loss of $577 million. The negative effective tax rate was primarily driven by an impairment loss of $1.1 billion during the third and fourth quarters of 2014. | |||||||||||||
The Company is based in the U.K., which has a statutory rate of 21% as of December 31, 2014. However, the income of our non-U.K. subsidiaries is not expected to be subject to U.K. corporate tax. Prior to being based in the U.K., our Predecessor was based in Switzerland. Similar to the U.K., the income of our non-Swiss subsidiaries was not subject to tax in Switzerland. A reconciliation of tax rates outside of Switzerland and the U.K. to our effective rate is shown below: | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Effect of: | |||||||||||||
Tax rates which are different than the U.K. and Swiss rates | (15.3 | )% | 17.4 | % | 28 | % | |||||||
Tax effect from asset impairment | 4.3 | % | — | % | — | % | |||||||
Change in valuation allowance | — | % | 2 | % | — | % | |||||||
Reserve for (resolution of) tax authority audits | (1.0 | )% | (0.2 | )% | (0.2 | )% | |||||||
Total | (12.0 | )% | 19.2 | % | 27.8 | % | |||||||
The components of the net deferred taxes are as follows: | |||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Deferred tax assets | |||||||||||||
Accrued expenses not currently deductible | $ | 3,556 | $ | — | |||||||||
Net operating loss carry forwards | 22,645 | 43,409 | |||||||||||
Deferred tax assets | 26,201 | 43,409 | |||||||||||
Less: Valuation allowance | — | (8,672 | ) | ||||||||||
Net deferred tax assets | 26,201 | 34,737 | |||||||||||
Deferred tax liabilities | |||||||||||||
Excess of net book basis over remaining tax basis of Property and equipment | (58,844 | ) | (122,581 | ) | |||||||||
Deferred taxes on unremitted earnings | (6,043 | ) | — | ||||||||||
Contract market valuation | (5,434 | ) | — | ||||||||||
Other | (838 | ) | — | ||||||||||
Deferred tax liabilities | (71,159 | ) | (122,581 | ) | |||||||||
Net deferred tax liabilities | $ | (44,958 | ) | $ | (87,844 | ) | |||||||
The deferred tax assets related to our net operating losses were generated in various tax jurisdictions. With the exception of the $13 million tax effect of our Mexico net operating losses which will expire between 2021 and 2022, our net operating losses do not expire. We recognize a valuation allowance for deferred tax assets when it is more-likely-than-not that the benefit from the deferred tax asset will not be realized. The amount of deferred tax assets considered realizable could increase or decrease in the near-term if estimates of future taxable income change. | |||||||||||||
The following is a reconciliation of the liabilities related to our unrecognized tax benefits, excluding interest and penalties: | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Gross balance at January 1, | $ | 32,336 | $ | 37,969 | $ | 44,188 | |||||||
Additions based on tax positions related to the current year | 4,442 | 532 | 536 | ||||||||||
Additions for tax positions of prior years | 1,424 | 4,599 | 2,430 | ||||||||||
Reductions for tax positions of prior years | (7,298 | ) | (214 | ) | — | ||||||||
Expiration of statutes | (1,225 | ) | (2,712 | ) | (3,130 | ) | |||||||
Tax settlements | — | (7,838 | ) | (6,055 | ) | ||||||||
Gross balance at December 31, | 29,679 | 32,336 | 37,969 | ||||||||||
Related tax benefits | — | (1,983 | ) | (6,590 | ) | ||||||||
Net balance at December 31, | $ | 29,679 | $ | 30,353 | $ | 31,379 | |||||||
The liabilities related to our unrecognized tax benefits are comprised of the following: | |||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Unrecognized tax benefits, excluding interest and penalties | $ | 29,679 | $ | 30,353 | |||||||||
Interest and penalties included in “Other liabilities” | 10,517 | 6,137 | |||||||||||
Unrecognized tax benefits, including interest and penalties | $ | 40,196 | $ | 36,490 | |||||||||
We include, as a component of our income tax provision, potential interest and penalties related to liabilities for our unrecognized tax benefits within our global operations. Interest and penalties resulted in an income tax expense of $2 million in 2014, an income tax expense of $1 million in 2013 and an income tax expense of $4 million in 2012. | |||||||||||||
If recognized, $40 million of our unrecognized tax benefit would reduce our income tax provision as of December 31, 2014. | |||||||||||||
It is reasonably possible that our existing liabilities related to our unrecognized tax benefits may increase or decrease in the next twelve months primarily due to the progression of open audits or the expiration of statutes of limitation. However, we cannot reasonably estimate a range of potential changes in our existing liabilities for unrecognized tax benefits due to various uncertainties, such as the unresolved nature of various audits. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS | |||||||||||||||||||||
During the periods prior to Spin-Off, most of our employees were eligible to participate in various Noble benefit programs. The results of our Predecessor in these consolidated and combined financial statements include an allocation of the costs of such employee benefit plans, consistent with the accounting for multi-employer plans. These costs were allocated based on our employee population for each of the periods presented. We consider the expense allocation methodology and results to be reasonable for all periods presented; however, the allocated costs included in the results of our Predecessor and included in these consolidated and combined financial statements could differ from amounts that would have been incurred by us if we operated on a standalone basis and are not necessarily indicative of costs to be incurred in the future. | ||||||||||||||||||||||
We have instituted competitive compensation policies and programs, as well as carried over certain plans as a standalone public company, the expense for which may differ from the compensation expense allocated by Noble in our Predecessor’s historical combined financial statements. | ||||||||||||||||||||||
Defined Benefit Plans | ||||||||||||||||||||||
At Spin-Off, Noble sponsored two non-U.S. noncontributory defined benefit pension plans which were carried over by us and cover certain Europe-based salaried, non-union employees. Pension benefit expense related to these plans included in the accompanying consolidated and combined statements of income for the year ended December 31, 2014 totaled $6 million. | ||||||||||||||||||||||
A reconciliation of the changes in projected benefit obligations (“PBO”) for our pension plans is as follows: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Benefit obligation at beginning of year | $ | 95,101 | ||||||||||||||||||||
Service cost | 4,819 | |||||||||||||||||||||
Interest cost | 2,601 | |||||||||||||||||||||
Actuarial loss (gain) | 39,499 | |||||||||||||||||||||
Amendments | (139 | ) | ||||||||||||||||||||
Benefits paid | (1,240 | ) | ||||||||||||||||||||
Plan participants' contribution | 512 | |||||||||||||||||||||
Foreign exchange rate changes | (14,806 | ) | ||||||||||||||||||||
Other: curtailment | (1,985 | ) | ||||||||||||||||||||
Benefit obligation at end of year | $ | 124,362 | ||||||||||||||||||||
A reconciliation of the changes in fair value of plan assets is as follows: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 97,453 | ||||||||||||||||||||
Actual return on plan assets | 38,252 | |||||||||||||||||||||
Employer contribution | 6,565 | |||||||||||||||||||||
Benefits paid | (833 | ) | ||||||||||||||||||||
Plan participants' contributions | 512 | |||||||||||||||||||||
Expenses paid | (407 | ) | ||||||||||||||||||||
Foreign exchange rate changes | (15,951 | ) | ||||||||||||||||||||
Fair value of plan assets at end of year | $ | 125,591 | ||||||||||||||||||||
The funded status of the plans is as follows: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Funded status | $ | 1,229 | ||||||||||||||||||||
Amounts recognized in the consolidated and combined balance sheets consist of: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Other assets (noncurrent) | $ | 1,229 | ||||||||||||||||||||
Accumulated other comprehensive loss recognized in financial statements | 22,911 | |||||||||||||||||||||
Net amount recognized | $ | 24,140 | ||||||||||||||||||||
Amounts recognized in Accumulated other comprehensive loss (“AOCL”) consist of: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Actuarial loss (gain) | $ | 20,539 | ||||||||||||||||||||
Prior service cost (credit) | 2,063 | |||||||||||||||||||||
Deferred income tax | 309 | |||||||||||||||||||||
Accumulated other comprehensive loss | $ | 22,911 | ||||||||||||||||||||
Pension cost includes the following components: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Service cost | $ | 4,819 | ||||||||||||||||||||
Interest cost | 2,601 | |||||||||||||||||||||
Return on plan assets | (2,625 | ) | ||||||||||||||||||||
Amortization of Prior Service Cost | (16 | ) | ||||||||||||||||||||
Amortization of transition obligation | — | |||||||||||||||||||||
Amortization net actuarial loss (gain) | 1,077 | |||||||||||||||||||||
Net curtailment (gain) | (66 | ) | ||||||||||||||||||||
Net pension expense | $ | 5,790 | ||||||||||||||||||||
Amortization related to prior service cost and net actuarial loss is estimated to be less than $1 million in 2015. | ||||||||||||||||||||||
Defined Benefit Plans - Disaggregated Plan Information | ||||||||||||||||||||||
Disaggregated information regarding our pension plans is summarized below: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Projected benefit obligation | $ | 124,362 | ||||||||||||||||||||
Accumulated benefit obligation | 119,632 | |||||||||||||||||||||
Fair value of plan assets | 125,591 | |||||||||||||||||||||
Defined Benefit Plans - Key Assumptions | ||||||||||||||||||||||
The key assumptions for the plans are summarized below: | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
Weighted Average Assumptions Used to Determine Benefit Obligations | 2014 | |||||||||||||||||||||
Discount rate | 2.3% to 2.4% | |||||||||||||||||||||
Rate of compensation increase | 3.6 | % | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | 2014 | |||||||||||||||||||||
Discount rate | 2.7% to 3.9% | |||||||||||||||||||||
Expected long-term return on plan assets | 2.7% to 2.8% | |||||||||||||||||||||
Rate of compensation increase | 3.6 | % | ||||||||||||||||||||
The discount rates used to calculate the net present value of future benefit obligations are determined by using a yield curve of high quality bond portfolios with an average maturity approximating that of the liabilities. | ||||||||||||||||||||||
We employ third-party consultants who use a portfolio return model to assess the initial reasonableness of the expected long-term rate of return on plan assets. To develop the expected long-term rate of return on assets, we considered the current level of expected returns on risk free investments (primarily government bonds), the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return on assets for the portfolio. | ||||||||||||||||||||||
Defined Benefit Plans - Plan Assets | ||||||||||||||||||||||
Both the Paragon Offshore Enterprise Ltd and the Paragon Offshore Nederland B.V. pension plans have a targeted asset allocation of 100% debt securities. The investment objective for Paragon Offshore Enterprise Ltd and Paragon Offshore Nederland B.V. Non-US plans are to earn a favorable return against the Barclays Capital Euro - Treasury AAA 1 - 3 year benchmark. We evaluate the performance of this plan on an annual basis. | ||||||||||||||||||||||
The actual fair value of our pension plans as of December 31, 2014 is as follows: | ||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
Estimated Fair Value Measurements | ||||||||||||||||||||||
(In thousands) | Carrying | Quoted | Significant Other Observable Inputs | Significant Unobservable | ||||||||||||||||||
Amount | Prices in Active | (Level 2) | Inputs | |||||||||||||||||||
Markets | (Level 3) | |||||||||||||||||||||
(Level 1) | ||||||||||||||||||||||
Fixed Income securities: | ||||||||||||||||||||||
Corporate Bonds | $ | 32,476 | $ | — | $ | 32,477 | $ | — | ||||||||||||||
Other | 93,115 | — | — | 93,115 | ||||||||||||||||||
Total | $ | 125,591 | $ | — | $ | 32,477 | $ | 93,115 | ||||||||||||||
At December 31, 2014, assets of Paragon Offshore Enterprise Ltd and Paragon Offshore Nederland B.V. were invested in instruments that are similar in form to a guaranteed insurance contract. There are no observable market values for the assets (level 3); however, the amounts listed as plan assets were materially similar to the anticipated benefit obligations that were anticipated under the plans. Amounts were therefore calculated using actuarial assumptions completed by third party consultants employed by Noble. The following table details the activity related to these investments during the year. | ||||||||||||||||||||||
Market Value | ||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 68,280 | ||||||||||||||||||||
Assets sold/benefits paid | (735 | ) | ||||||||||||||||||||
Return on plan assets | 25,570 | |||||||||||||||||||||
Balance as of December 31, 2014 | $ | 93,115 | ||||||||||||||||||||
Defined Benefit Plans - Cash Flows | ||||||||||||||||||||||
In 2014, we made total contributions of $7 million to our pension plans. We expect our aggregate minimum contributions to our plans in 2015, subject to applicable law, to be $5 million. We continue to monitor and evaluate funding options based upon market conditions and may increase contributions at our discretion. | ||||||||||||||||||||||
The following table summarizes our benefit payments at December 31, 2014 estimated to be paid within the next ten years: | ||||||||||||||||||||||
Payments by Period | ||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Five Years | ||||||||||||||||
Thereafter | ||||||||||||||||||||||
Estimated benefit payments | $ | 18,490 | 868 | 993 | 1,168 | 1,390 | 1,618 | 12,453 | ||||||||||||||
Other Benefit Plans | ||||||||||||||||||||||
At Spin-Off, Noble sponsored a 401(k) defined contribution plan and a profit sharing plan, which covered our Predecessor’s employees who are not otherwise enrolled in the above defined benefit plans. Other post-retirement benefit expense related to these plans included in the accompanying consolidated and combined statements of income during the five months ended December 31, 2014, not including amounts allocated to our Predecessor, totaled $2 million. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
Although we are a U.K. company, we define foreign currency as any non-U.S. denominated currency. Our functional currency is primarily the U.S. dollar. However, outside the United States, a portion of our expenses are incurred in local currencies. We are exposed to risks on future cash flows to the extent that local currency expenses exceed revenues denominated in local currencies that are other than the U.S. dollar. To help manage this potential risk, we periodically enter into derivative instruments to manage our exposure to fluctuations in foreign currency exchange rates, and we may conduct hedging activities in future periods to mitigate such exposure. We have documented policies and procedures to monitor and control the use of derivative instruments. We do not engage in derivative transactions for speculative or trading purposes, nor are we a party to leveraged derivatives. | |
Cash Flow Hedges | |
Our North Sea, Mexico and Brazil operations have a significant amount of their cash operating expenses payable in local currencies. To limit the potential risk of currency fluctuations, we may periodically enter into forward contracts all of which would have a maturity of less than twelve months and would settle monthly in the operations’ respective local currencies. During 2014, we, entered into forward contracts, expressed in U.S. dollars, of approximately $58 million, all of which settled during the year. We had no outstanding derivative contracts and thus no unrealized gains recorded as a part of AOCL at both December 31, 2014 and 2013. See Note 13, “Accumulated Other Comprehensive Loss” for changes in AOCL related to our cash flow hedges. Subsequent to the Spin-Off, total realized losses related to these forward contracts were $14 thousand and were classified as “Contract drilling services operating costs and expenses” on the consolidated and combined statement of operations for the year ended December 31, 2014. As of December 31, 2014, these forward contracts are designated as cash flow hedging instruments. | |
For our foreign currency forward contracts, hedge effectiveness is evaluated at inception based on the matching of critical terms between derivative contracts and the hedged item. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. For the year ended December 31, 2014, no loss was recognized on our consolidated and combined statement of income due to hedge ineffectiveness. Additionally, there were no gains or losses recognized in income for the year ended December 31, 2014 as a result of excluding amounts from the assessment of hedge effectiveness or as a result of reclassifications to earnings following the discontinuance of any cash flow hedges. | |
Prospector Interest Rate Swaps Acquired | |
Our Prospector Credit Facility exposes Prospector to short-term changes in market interest rates as our interest obligations on these instruments are periodically redetermined based on the prevailing LIBOR rate. Upon our acquisition of Prospector, Prospector had interest rate swaps originally entered into by a subsidiary of Prospector on June 13, 2014 with an aggregate maximum notional amount of $135 million. The interest rate swaps were entered into to reduce the variability of the cash interest payments under the Prospector Senior Credit Facility and currently fix the interest on approximately $133 million, or 50%, of outstanding borrowings under the Prospector Credit Facility. Prospector receives interest at three-month LIBOR and pays interest at a fixed rate of 1.512% over the expected term of the Prospector Senior Credit Facility. We do not apply hedge accounting with respect to these interest rate swaps and therefore, changes in fair values were recognized as either income or loss in our consolidated and combined statement of income. The fair values of our interest rate swaps were determined based on a discounted cash flow model utilizing an appropriate market or risk-adjusted yield. The effects of discounting are generally considered insignificant for interest rate swaps. As of December 31, 2014, the change in fair value of the interest rate swaps recorded in “Interest expense net of amount capitalized” is a gain of $78 thousand. The interest rate swaps are measured and recorded on our consolidated and combined balance sheet at fair value. As of December 31, 2014, we had approximately $2 million recorded in “Other current liabilities” and approximately $1 million recorded in “Other long-term assets” related to the interest rate swaps (see Note 12, “Concentration of Market and Credit Risk”). |
Concentration_of_Market_and_Cr
Concentration of Market and Credit Risk | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Concentration of Market and Credit Risk | CONCENTRATION OF MARKET AND CREDIT RISK | |||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
The following table presents the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis: | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Estimated Fair Value Measurement | ||||||||||||||||
Carrying | Quoted | Significant | Significant | |||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | |||||||||||||||
(In thousands) | Amount | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets - | ||||||||||||||||
Interest rate swaps | $ | 531 | $ | — | $ | 531 | $ | — | ||||||||
Liabilities - | ||||||||||||||||
Interest rate swaps | $ | 1,530 | $ | — | $ | 1,530 | $ | — | ||||||||
We had no outstanding foreign currency forward contracts at December 31, 2014. The fair values of our interest rate swaps were determined based on a discounted cash flow model utilizing an appropriate market or risk-adjusted yield. The effects of discounting are generally considered insignificant for interest rate swaps. Our cash and cash equivalents, accounts receivable and accounts payable are by their nature short-term. As a result, the carrying values included in the accompanying consolidated and combined balance sheets approximates fair value. For the estimated fair value of our long-term debt, refer to Note 7, “Debt.” | ||||||||||||||||
Credit Risk | ||||||||||||||||
The market for our services is the offshore oil and gas industry, and our customers consist primarily of government-owned oil companies, major integrated oil companies and independent oil and gas producers. We perform ongoing credit evaluations of our customers and do not require material collateral. We maintain reserves for potential credit losses when necessary. Our results of operations and financial condition should be considered in light of the fluctuations in demand experienced by drilling contractors as changes in oil and gas producers’ expenditures and budgets occur. These fluctuations can impact our results of operations and financial condition as supply and demand factors directly affect utilization and dayrates, which are the primary determinants of our net cash provided by operating activities. | ||||||||||||||||
Revenues from Petróleos Mexicanos accounted for approximately 16%, 19%, and 21% of our operating revenues in 2014, 2013 and 2012, respectively. Revenues from Petrobras accounted for approximately 23%, 17% percent, and 18% of our operating revenues in 2014, 2013, and 2012, respectively. No other customer accounted for more than ten percent of our operating revenues in 2014, 2013 or 2012. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||||||||||||
The following table sets forth the components of “Accumulated other comprehensive loss” (“AOCL”) for the years ended December 31, 2014 and 2013 and changes in AOCL by component for the year ended December 31, 2014. All accounts within the tables are shown net of tax. | |||||||||||||||||
(In thousands) | Gains / | Defined | Foreign | Total | |||||||||||||
(Losses) on | Benefit | Currency | |||||||||||||||
Cash Flow | Pension Items (2) | Items | |||||||||||||||
Hedges (1) | |||||||||||||||||
Balance at December 31, 2013 | $ | — | $ | — | $ | (6 | ) | $ | (6 | ) | |||||||
Activity during period: | |||||||||||||||||
AOCL recorded in connection with Spin-Off | 4,027 | (21,770 | ) | (12,706 | ) | (30,449 | ) | ||||||||||
AOCL recorded in connection with Prospector acquisition | — | — | (40 | ) | (40 | ) | |||||||||||
Other comprehensive loss before reclassification | (4,041 | ) | — | (1,481 | ) | (5,522 | ) | ||||||||||
Amounts reclassified from AOCL | 14 | (1,141 | ) | — | (1,127 | ) | |||||||||||
Net other comprehensive income (loss) | (4,027 | ) | (1,141 | ) | (1,481 | ) | (6,649 | ) | |||||||||
Balance at December 31, 2014 | $ | — | $ | (22,911 | ) | $ | (14,233 | ) | $ | (37,144 | ) | ||||||
-1 | Gains / (losses) on cash flow hedges are related to our foreign currency forward contracts. Reclassifications from AOCL are recognized through “Contract drilling services operating costs and expenses” on our consolidated and combined statements of income. See Note 11, “Derivative instruments and hedging activities” for additional information. | ||||||||||||||||
-2 | Defined benefit pension items relate to actuarial losses, prior service credits, and the amortization of actuarial losses and prior service credits. Reclassifications from AOCL are recognized as expense on our consolidated and combined statements of income through either “Contract drilling services” or “General and administrative.” See Note 10, “Employee benefit plans” for additional information. |
Deferred_Revenue_and_Costs
Deferred Revenue and Costs | 12 Months Ended |
Dec. 31, 2014 | |
Deferred Revenue and Costs Disclosure [Abstract] | |
Deferred Revenue and Costs | DEFERRED REVENUES AND COSTS |
It is typical in our dayrate drilling contracts to receive compensation and incur costs for mobilization, equipment modification, or other activities prior to the commencement of the contract. Any such compensation may be paid through a lump-sum payment or other daily compensation. Pre-contract compensation and costs are deferred until the contract commences. The deferred pre-contract compensation and costs are amortized, using the straight-line method, into income over the term of the initial contract period, regardless of the activity taking place. This approach is consistent with the economics for which the parties have contracted. Once a contract commences, we may conduct various activities, including drilling and well bore related activities, rig maintenance and equipment installation, movement between well locations or other activities. | |
Deferred revenues from drilling contracts totaled $9 million at December 31, 2014 as compared to $22 million at December 31, 2013. Such amounts are included in either “Other current liabilities” or “Other liabilities” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred revenues. Deferred costs associated with deferred revenues from drilling contracts totaled $2 million at December 31, 2014 as compared to $24 million at December 31, 2013. Such amounts are included in either “Prepaid and other current assets” or “Other assets” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred costs. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | GAIN ON CONTRACT SETTLEMENTS/EXTINGUISHMENT, NET | |||
During the third quarter of 2013, Noble received $45 million related to the settlement of all claims against the former investors of FDR Holdings, Ltd., which Noble acquired in July 2010, relating to alleged breaches of various representations and warranties contained in the purchase agreement. A portion of the settlement related to standard specification rigs. This portion, totaling $23 million, was pushed down to our Predecessor in 2013, through an allocation, using the acquired rig values of the purchased rigs. | ||||
During the fourth quarter of 2012, our Predecessor received a deposit of $2 million related to the potential sale of one of our drilling units to an unrelated third party. During the first quarter of 2013 negotiations led to the sale not being completed and the deposit was recognized as a gain. | ||||
During the second quarter of 2012, our Predecessor received $5 million from the settlement of a claim relating to the Noble David Tinsley, which experienced a “punch-through” while being positioned on location in 2009. | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Operating Leases | ||||
Future minimum lease payments for operating leases for years ending December 31 are as follows (in thousands): | ||||
2015 | $ | 14,734 | ||
2016 | $ | 10,871 | ||
2017 | $ | 4,494 | ||
2018 | $ | 2,596 | ||
2019 | $ | 2,032 | ||
Thereafter | $ | 3,462 | ||
Total rent expense under operating leases was approximately $16 million for the year ended December 31, 2014. | ||||
Purchase Commitments | ||||
At December 31, 2014, our purchase commitments which consist of obligations outstanding to external vendors primarily related to future capital purchases, were as follows (in thousands): | ||||
2015 | $ | 454,098 | ||
2016 | $ | 199,161 | ||
Litigation | ||||
We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, the resolution of which, in the opinion of management, will not have a material adverse effect on our financial position, results of operations or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims. | ||||
Other Contingencies | ||||
We have received tax audit claims of approximately $267 million, of which $50 million is subject to indemnity by Noble, primarily in Mexico and Brazil, attributable to our income, customs and other business taxes. In addition, approximately $37 million of tax audit claims attributable to Mexico assessed against Noble may be allocable to us as a result of the Spin-Off. We have contested, or intend to contest, these assessments, including through litigation if necessary. Tax authorities may issue additional assessments or pursue legal actions as a result of tax audits, and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions. In some cases we will be required to post a surety bond or a letter of credit as collateral to defend us. Although we have no surety bonds or letters of credit associated with tax audit claims outstanding as of December 31, 2014, we could be required to post collateral against our Mexico assessments during 2015, which could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows. | ||||
In addition, Petróleo Brasileiro S.A. (“Petrobras”) has notified us, along with other industry participants, that it is currently challenging assessments by Brazilian tax authorities of withholding taxes associated with the provision of drilling rigs for its operations in Brazil during the years 2008 and 2009 totaling $106 million, of which $30 million is subject to indemnity by Noble. Petrobras has also notified us that if they must pay such withholding taxes, they will seek reimbursement from us. We believe that we are contractually indemnified by Petrobras for these amounts and dispute the validity of the assessment. We have notified Petrobras of our position. We will, if necessary, vigorously defend our rights. If we were required to pay such reimbursement, however, the amount of such reimbursement could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows. | ||||
In January 2015, a subsidiary of Noble received an unfavorable ruling from the Mexican Supreme Court on a tax depreciation position claimed in periods prior to the Spin-Off. Although the ruling does not constitute mandatory jurisprudence in Mexico, it does create potential indemnification exposure for us under the tax sharing agreement. Noble is the primary obligor to the Mexican tax authorities and, to our understanding, has yet to decide on a course of action in this matter, which could include an appeal against this ruling. As a result, while we are in discussions with Noble, we are presently unable to determine next steps or a timeline on this matter; nor are we able to determine the extent of our liability. We have considered this matter under ASC 460, Guarantees, and concluded that our liability under this matter is reasonably possible. Due to these current uncertainties, we are not able to reasonably estimate a loss at this time. | ||||
Insurance | ||||
In connection with the Separation, we replaced our Predecessor’s insurance policies, which were supported by Noble, with substantially similar standalone insurance policies. We maintain certain insurance coverage against specified marine perils, which included physical damage and loss of hire. Damage caused by hurricanes has negatively impacted the energy insurance market, resulting in more restrictive and expensive coverage for named windstorm perils. | ||||
We maintain insurance in the geographic areas in which we operate, although pollution, reservoir damage and environmental risks generally are not fully insurable. Our insurance policies and contractual rights to indemnity may not adequately cover our losses or may have exclusions of coverage for some losses. We do not have insurance coverage or rights to indemnity for all risks, including loss of hire insurance on most of the rigs in our fleet. Uninsured exposures may include expatriate activities prohibited by U.S. laws and regulations, radiation hazards, certain loss or damage to property on board our rigs and losses relating to shore-based terrorist acts or strikes. If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity, it could materially adversely affect our financial position, results of operations or cash flows. Additionally, there can be no assurance that those parties with contractual obligations to indemnify us will necessarily be financially able to indemnify us against all these risks. | ||||
Capital Expenditures | ||||
In connection with our capital expenditure program, we have outstanding commitments, including shipyard and purchase commitments of approximately $653 million at December 31, 2014. | ||||
Other | ||||
At December 31, 2014, we had letters of credit of $21 million and performance bonds totaling $110 million supported by surety bonds outstanding. Certain of our subsidiaries issued guarantees to the temporary import status of rigs or equipment imported into certain countries in which we operated. These guarantees are issued in lieu of payment of custom, value added or similar taxes in those countries. | ||||
Separation Agreements | ||||
In connection with the Spin-off, on July 31, 2014, we entered into several definitive agreements with Noble or its subsidiaries that, among other things, set forth the terms and conditions of the Spin-Off and provide a framework for our relationship with Noble after the Spin-off, including the following agreements: | ||||
• | Master Separation Agreement; | |||
• | Tax Sharing Agreement; | |||
• | Employee Matters Agreement; | |||
• | Transition Services Agreement relating to services Noble and Paragon will provide to each other on an interim basis; and | |||
• | Transition Services Agreement relating to Noble’s Brazil operations. | |||
Pursuant to these agreements with Noble, the consolidated and combined balance sheet consists of the following balances due from and to Noble as of December 31, 2014 (in thousands): | ||||
Balance Sheet Position | Amount | |||
Other current assets | $ | 26,386 | ||
Other assets | 6,875 | |||
Due from Noble | $ | 33,261 | ||
Accounts payable | $ | 1,655 | ||
Other current liabilities | 51,169 | |||
Other liabilities | 23,563 | |||
Due to Noble | $ | 76,387 | ||
These receivables and payables primarily relate to rights and obligations under the Tax Sharing Agreement. | ||||
Master Separation Agreement | ||||
On July 31, 2014, we entered into a Master Separation Agreement with Noble Corporation, a Cayman Islands company and an indirect, wholly-owned subsidiary of Noble (“Noble-Cayman”), which provided for, among other things, the Distribution of our ordinary shares to Noble shareholders and the transfer to us of the assets and the assumption by us of the liabilities relating to our business and the responsibility of Noble for liabilities related to Noble’s, and in certain limited cases, our business. The Master Separation Agreement identified which assets and liabilities constitute our business and which assets and liabilities constitute Noble’s business. | ||||
Tax Sharing Agreement | ||||
On July 31, 2014, we entered into a Tax Sharing Agreement with Noble, which governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes following the Distribution. | ||||
Employee Matters Agreement | ||||
On July 31, 2014, we entered into an Employee Matters Agreement with Noble-Cayman to allocate liabilities and responsibilities relating to our employees and their participation in certain compensation and benefit plans maintained by Noble or a subsidiary of Noble. The Employee Matters Agreement provides that, following the Distribution, most of our employee benefits are provided under compensation and benefit plans adopted or assumed by us. In general, our plans are substantially similar to the plans of Noble or its subsidiaries that covered our employees prior to the completion of the Distribution. The Employee Matters Agreement also addresses the treatment of outstanding Noble equity awards held by transferring employees, including the grant of our equity awards or other rights with respect to Noble equity awards held by transferring employees that were canceled in connection with the Spin-Off. | ||||
Transition Services Agreement | ||||
On July 31, 2014, we entered into a Transition Services Agreement with Noble-Cayman pursuant to which Noble-Cayman provides, on a transitional basis, certain administrative and other assistance, generally consistent with the services that Noble provided to us before the separation, and we provide certain transition services to Noble and its subsidiaries. The charges for the transition services are generally intended to allow the party providing the services to fully recover the costs directly associated with providing the services, plus all out-of-pocket costs and expenses, generally without profit. The charges for each of the transition services generally are based on either a pre-determined flat fee or an allocation of the costs incurred, including certain fees and expenses of third-party service providers. | ||||
Transition Services Agreement (Brazil) | ||||
On July 31, 2014, we and Noble-Cayman and certain other subsidiaries of Noble entered into a Transition Services Agreement (and a related rig charter) pursuant to which we will provide certain transition services to Noble and its subsidiaries in connection with Noble’s Brazil operations. We will continue to provide both rig-based and shore-based support services in respect of Noble’s remaining business through the term of Noble’s existing rig contracts. Noble currently has one rig operating in Brazil. Noble-Cayman will compensate us on a cost-plus basis for providing such services and also indemnify us for liabilities arising out of the services agreement. This agreement will terminate when the last of the Noble semisubmersibles working in Brazil finish the existing contract, which is expected to occur in 2016. |
Related_Parties_Including_Rela
Related Parties (Including Relationship with Parent and Corporate Allocations) | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Parties (Including Relationship With Parent and Corporate Allocations) | RELATED PARTIES (INCLUDING RELATIONSHIP WITH PARENT AND CORPORATE ALLOCATIONS) |
For all periods prior to the Spin-Off, our Predecessor was managed in the normal course of business by Noble and its subsidiaries. Accordingly, certain shared costs have been allocated to our Predecessor and are reflected as expenses in these combined financial statements for periods prior to Spin-Off. Our management considers the allocation methodologies used to be reasonable and appropriate reflections of the related expenses attributable to us for purposes of the carve-out financial statements; however, the expenses reflected in the results of our Predecessor and included in these consolidated and combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if our Predecessor had operated as a separate standalone entity and may not be indicative of expenses that will be incurred in the future by us. | |
Allocated costs include, but are not limited to: corporate accounting, human resources, information technology, treasury, legal, employee benefits and incentives (excluding allocated postretirement benefits described in “Note 10, Employee Benefit Plans,”) and stock-based compensation. Our Predecessor’s allocated costs included in contract drilling services in the accompanying consolidated and combined statements of income totaled $70 million, $147 million, and $113 million for the years ended December 31, 2014, 2013, and 2012, respectively. Our Predecessor’s allocated costs included in general, and administrative expenses in the accompanying consolidated and combined statements of income totaled $25 million, $58 million, and $53 million for the years ended December 31, 2014, 2013, and 2012 respectively. The costs were allocated to our Predecessor using various inputs, such as head count, services rendered, and assets assigned to our Predecessor. |
Segment_and_Related_Informatio
Segment and Related Information | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Segment and Related Information | SEGMENT AND RELATED INFORMATION | ||||||||||||||||||||
At December 31, 2014, our contract drilling operations were reported as a single reportable segment, Contract Drilling Services, which reflects how our business is managed, and the fact that all of our drilling fleet is dependent upon the worldwide oil industry. The mobile offshore drilling units that comprise our offshore rig fleet operated in a single, global market for contract drilling services and are often redeployed globally due to changing demands of our customers, which consisted largely of major non-U.S. and government owned/controlled oil and gas companies throughout the world. Our contract drilling services segment conducts contract drilling operations in Mexico, Brazil, the North Sea, West Africa, the Middle East, India, and Southeast Asia. | |||||||||||||||||||||
Operations by Geographic Area | |||||||||||||||||||||
The following table presents revenues and identifiable assets by country based on the location of the service provided: | |||||||||||||||||||||
Revenues | Identifiable Assets | ||||||||||||||||||||
Year Ended December 31, | As of December 31, | ||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | 2014 | 2013 | ||||||||||||||||
Country: | |||||||||||||||||||||
Mexico | $ | 326,352 | $ | 367,732 | $ | 320,436 | $ | 472,032 | $ | 351,123 | |||||||||||
Brazil | 488,884 | 312,287 | 284,061 | 1,863,774 | 1,864,358 | ||||||||||||||||
United Kingdom | 193,908 | 245,789 | 141,435 | 90,410 | 196,479 | ||||||||||||||||
The Netherlands | 284,651 | 179,768 | 210,577 | 169,088 | 112,561 | ||||||||||||||||
Qatar | 94,320 | 139,891 | 74,889 | 96,702 | 130,515 | ||||||||||||||||
United States | 85,060 | 117,951 | 105,469 | 94,391 | 712,713 | ||||||||||||||||
United Arab Emirates | 139,318 | 108,256 | 79,940 | 228,284 | 152,699 | ||||||||||||||||
Nigeria | — | 107,750 | 148,961 | 11,308 | 54,539 | ||||||||||||||||
India | 79,201 | 103,282 | 58,355 | 135,909 | 200,799 | ||||||||||||||||
Other | 302,068 | 210,296 | 117,734 | 91,491 | 207,013 | ||||||||||||||||
$ | 1,993,762 | $ | 1,893,002 | $ | 1,541,857 | $ | 3,253,389 | $ | 3,982,799 | ||||||||||||
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||||||
The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Accounts receivable | $ | (178,108 | ) | $ | (34,582 | ) | $ | (116,714 | ) | ||||
Other current assets | 42,922 | 22,181 | (2,941 | ) | |||||||||
Other assets | (33,637 | ) | 16,451 | 39,484 | |||||||||
Accounts payable | 25,890 | 8,530 | (12,485 | ) | |||||||||
Other current liabilities | 14,273 | 18,645 | 4,562 | ||||||||||
Other liabilities | (29,514 | ) | (16,385 | ) | (4,920 | ) | |||||||
Net change in other assets and liabilities | $ | (158,174 | ) | $ | 14,840 | $ | (93,014 | ) | |||||
Additional cash flow information is as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Cash paid during the period for: | |||||||||||||
Interest, net of amounts capitalized | $ | 21,109 | $ | 5,791 | $ | 3,856 | |||||||
U.S. and Non-U.S. income taxes | 85,248 | 76,423 | 63,745 | ||||||||||
Non-cash activities: | |||||||||||||
Increase (decrease) in accounts payable and accrued liabilities related to capital expenditures | $ | 1,230 | $ | (12,365 | ) | $ | (8,463 | ) | |||||
New_Accounting_Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUCEMENTS |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends FASB Accounting Standards Codification (“ASC”) Topic 205, “Presentation of Financial Statements” and ASC Topic 360, “Property, Plant, and Equipment.” This ASU alters the definition of a discontinued operation to cover only asset disposals that are a strategic shift with a major effect on an entity’s operations and finances, and calls for more extensive disclosures about a discontinued operation’s assets, liabilities, income and expenses. The guidance is effective for all disposals, or classifications as held-for-sale, of components of an entity that occur within annual periods, and interim periods within those annual periods, beginning on or after December 15, 2014. We do not expect that our adoption will have a material impact on our financial statements or disclosures in our financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, “Revenue from Contracts with Customers.” The amendments in this ASU are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices and improve disclosure requirements. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2016. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In June 2014, the FASB issued ASU No. 2014-12, which amends ASC Topic 718, “Compensation–Stock Compensation.” The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. The guidance is effective for annual periods beginning after December 15, 2015. The guidance can be applied prospectively for all awards granted or modified after the effective date or retrospectively to all awards with performance targets outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern.” This ASU codifies management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for interim and annual periods ending after December 15, 2016 and early adoption is permitted. We still evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items.” This ASU simplifies income statement classification by removing the concept of extraordinary items from U.S. GAAP. As a result, items that are both unusual and infrequent will no longer be separately reported net of tax after continuing operations. The guidance is effective for interim and annual periods ending after December 15, 2015 and early adoption is permitted. We do not expect that our adoption will have a material impact on our financial statements or disclosures in our financial statements. |
Unaudited_Interim_Financial_Da
Unaudited Interim Financial Data | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Unaudited Interim Financial Data | UNAUDITED INTERIM FINANCIAL DATA | ||||||||||||||||
Summarized quarterly results for years ended December 31, 2014 and 2013 are as follows: | |||||||||||||||||
Quarter Ended | |||||||||||||||||
(In thousands, except per share amounts) | 31-Mar | 30-Jun | 30-Sep | 31-Dec | |||||||||||||
2014 | |||||||||||||||||
Operating revenues | $ | 514,590 | $ | 478,957 | $ | 505,222 | $ | 494,993 | |||||||||
Operating income (loss) | 147,461 | 119,972 | (796,421 | ) | 4,311 | ||||||||||||
Net income (loss) attributable to Paragon Offshore | 124,566 | 95,045 | (869,160 | ) | -2 | 2,803 | |||||||||||
Earnings (loss) per share - | $ | 1.47 | $ | 1.12 | $ | (10.26 | ) | -3 | $ | 0.03 | |||||||
basic and diluted (1) | |||||||||||||||||
2013 | |||||||||||||||||
Operating revenues | $ | 454,070 | $ | 464,945 | $ | 489,682 | $ | 484,305 | |||||||||
Operating income | 102,601 | 106,143 | 187,240 | 57,761 | |||||||||||||
Net income | 82,572 | 82,544 | 157,635 | 37,555 | |||||||||||||
Earnings per share - | $ | 0.97 | $ | 0.97 | $ | 1.86 | -3 | $ | 0.44 | ||||||||
basic and diluted (1) | |||||||||||||||||
-1 | Earnings (loss) per share is computed independently for each of the quarters presented. Therefore, the sum of the quarters’ net income per share may not equal the total computed for the year. | ||||||||||||||||
-2 | Net income for the three month period ended September 30, 2014 has been revised to correct an error related to the amortization of our deferred tax liability related to the Paragon DPDS1. In connection with the impairment of the Paragon DPDS1 during the third quarter, a tax benefit should have been recorded to proportionally eliminate the deferred tax liability specifically related to the Paragon DPDS1. The third quarter tax provision as reported was $75.7 million and after revision for this additional non-cash tax benefit of $25.1 million, or $0.28 per diluted share, the tax provision was revised to $50.6 million. This revision also changes the reported net loss from $894.2 million to an as revised $869.2 million of net loss for the third quarter. We have concluded that this misstatement was not material to our consolidated and combined financial statements for the aforementioned prior period. | ||||||||||||||||
-3 | Earnings per share - basic and diluted for the three month period ended September 30, 2014 and 2013 has been revised to correct an error related to the allocation of unvested share-based awards. No earnings should have been allocated to unvested share-based payment awards in our earnings per share calculation due to our net loss in the three months ended September 30, 2014. Our basis of presentation related to weighted average unvested shares outstanding for all periods prior to the Spin-Off should not include our unvested restricted stock units that were granted to our employees in conjunction with Paragon's 2014 Employee Omnibus Incentive Plan. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Principles of Combination and Consolidation | Principles of Combination and Consolidation |
The consolidated and combined financial statements include our accounts, those of our wholly-owned subsidiaries and entities in which we hold a controlling financial interest. The combined financial statements of our Predecessor include our net assets and results of our operations as previously described. All significant intercompany accounts and transactions have been eliminated in combination and consolidation. | |
Foreign Currency Translation | Foreign Currency Translation |
We define foreign currency as any non-U.S. denominated currency. In non-U.S. locations where the U.S. dollar has been designated as the functional currency (based on an assessment of the economic circumstances of the foreign operation), local currency transaction gains and losses are included in net income. In non-U.S. locations where the local currency is the functional currency, assets and liabilities are translated at the rates of exchange on the balance sheet date, while income and expense items are translated at average rates of exchange during the year. The resulting gains or losses arising from the translation of accounts from the functional currency to the U.S. dollar are included in “Accumulated other comprehensive loss” in the accompanying consolidated and combined balance sheets. | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Cash and cash equivalents include cash on hand, demand deposits with banks and all highly liquid investments with original maturities of three months or less. Our cash, cash equivalents and short-term investments are subject to potential credit risk, and certain of our cash accounts carry balances greater than federally insured limits. Cash and cash equivalents are primarily held by major banks or investment firms. Our cash management and investment policies restrict investments to lower risk, highly liquid securities and we perform periodic evaluations of the relative credit standing of the financial institutions with which we conduct business. | |
Fair Value Measurements | Fair Value Measurements |
We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Our valuation techniques require inputs that we categorize using a three-level hierarchy, from highest to lowest level of observable inputs, as follows: (1) unadjusted quoted prices for identical assets or liabilities in active markets (“Level 1”), (2) direct or indirect observable inputs, including quoted prices or other market data, for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and (3) unobservable inputs that require significant judgment for which there is little or no market data (“Level 3”). When multiple input levels are required for a valuation, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. | |
Our cash and cash equivalents, accounts receivable and accounts payable are by their nature short-term. As a result, the carrying values included in the accompanying consolidated and combined balance sheets approximate fair value. | |
Property and Equipment, at Cost | Property and Equipment, at Cost |
Property and equipment is stated at cost, reduced by provisions to recognize economic impairment in value whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable. Major replacements and improvements are capitalized. When assets are sold, retired or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and the gain or loss is recognized. Drilling equipment and facilities are depreciated using the straight-line method over their estimated useful lives as of the date placed in service or date of major refurbishment. Estimated useful lives of our drilling equipment range from three to thirty years. Other property and equipment is depreciated using the straight-line method over useful lives ranging from two to twenty-five years. Included in accounts payable were $24 million and $29 million of capital accruals as of December 31, 2014 and 2013, respectively. | |
Scheduled maintenance of equipment is performed based on the number of hours operated in accordance with our preventative maintenance program. Routine repair and maintenance costs are charged to expense as incurred; however, the costs of overhauls and asset replacement projects that benefit future periods and which typically occur every three to five years are capitalized when incurred and depreciated over an equivalent period. These overhauls and asset replacement projects are included in “Property and equipment, at cost” in our consolidated and combined balance sheets. Such amounts, net of accumulated depreciation, totaled $193 million and $211 million at December 31, 2014 and 2013, respectively. Depreciation expense related to overhauls and asset replacement totaled $85 million, $76 million and $66 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
We evaluate the impairment of property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, on an annual basis, we complete an impairment analysis on all of our rigs. An impairment loss on our property and equipment exists when the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized represents the excess of the asset’s carrying value over the estimated fair value. As part of this analysis, we make assumptions and estimates regarding future market conditions. To the extent actual results do not meet our estimated assumptions we may take an impairment loss in the future (see Note 6, “Property and Equipment”). | |
Deferred Costs | Debt Issuance Costs |
Deferred debt issuance costs are amortized through interest expense over the life of the debt securities. | |
Revenue Recognition | Revenue Recognition |
Our typical dayrate drilling contracts require our performance of a variety of services for a specified period of time. We determine progress towards completion of the contract by measuring efforts expended and the cost of services required to perform under a drilling contract, as the basis for our revenue recognition. Revenues generated from our dayrate basis drilling contracts and labor contracts are recognized on a per day basis as services are performed and begin upon the contract commencement, as defined under the specified drilling or labor contract. Dayrate revenues are typically earned, and contract drilling expenses are typically incurred ratably over the term of our drilling contracts. We review and monitor our performance under our drilling contracts to confirm the basis for our revenue recognition. Revenues from bonuses are recognized when earned. | |
It is typical in our dayrate drilling contracts to receive compensation and incur costs for mobilization, equipment modification, or other activities prior to the commencement of the contract. Any such compensation may be paid through a lump-sum payment or other daily compensation. Pre-contract compensation and costs are deferred until the contract commences. The deferred pre-contract compensation and costs are amortized, using the straight-line method, into income over the term of the initial contract period, regardless of the activity taking place. This approach is consistent with the economics for which the parties have contracted. Once a contract commences, we may conduct various activities, including drilling and well bore related activities, rig maintenance and equipment installation, movement between well locations or other activities. | |
Deferred revenues from drilling contracts totaled $9 million at December 31, 2014 as compared to $22 million at December 31, 2013. Such amounts are included in either “Other current liabilities” or “Other liabilities” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred revenues. Deferred costs associated with deferred revenues from drilling contracts totaled $2 million at December 31, 2014 as compared to $24 million at December 31, 2013. Such amounts are included in either “Prepaid and other current assets” or “Other assets” in our consolidated and combined balance sheets, based upon the expected time of recognition of such deferred costs. | |
We record reimbursements from customers for “out-of-pocket” expenses as revenues and the related direct cost as operating expenses. | |
Income Taxes | Income Taxes |
We operate through various subsidiaries in numerous countries throughout the world. Due to our global presence, we are subject to tax laws, policies, treaties and regulations, as well as the interpretation or enforcement thereof, in the United Kingdom, the U.S., and any other jurisdictions in which we or any of our subsidiaries operate, are incorporated, or otherwise considered to have a tax presence. Our income tax expense is based upon our interpretation of the tax laws in effect in various countries at the time that the expense was incurred. If the taxing authorities do not agree with our assessment of the effects of such laws, policies, treaties and regulations, or the interpretation or enforcement thereof, this could have a material adverse effect on us including the imposition of a higher effective tax rate on our worldwide earnings or a reclassification of the tax impact of our significant corporate restructuring transactions. | |
The operations of our Predecessor have been included in certain income tax returns of Noble. The income tax provisions and related deferred tax assets and liabilities that have been reflected in our Predecessor’s historical combined financial statements have been computed as if our Predecessor were a separate taxpayer using the separate return method. As a result, actual tax transactions that would not have occurred had our Predecessor been a separate entity have been eliminated in the preparation of these consolidated and combined financial statements. Income taxes of our Predecessor include results of the operations of the standard specification drilling units. In instances where the operations of the standard specification drilling units of our Predecessor were included in the filing of a return with high specification units, an allocation of income taxes was made. | |
Earnings/Loss Per Share | Earnings/Loss per Share |
Our unvested share-based payment awards, which contain non-forfeitable rights to dividends, are participating securities and are included in the computation of earnings per share pursuant to the “two-class” method. The “two-class” method allocates undistributed earnings between ordinary shares and participating securities; however, in a period of net loss, losses are not allocated to our participating securities. The diluted earnings per share calculation under the “two-class” method would also includes the dilutive effect of potential shares issued in connection with stock options. The dilutive effect of stock options would be determined using the treasury stock method. The diluted earnings per share calculation under the two class method is the same as our basic earnings per share calculation as we currently have no stock options or other potentially dilutive securities outstanding. | |
Share-Based Compensation Plans | Share-Based Compensation Plans |
We record the grant date fair value of share-based compensation arrangements as compensation cost using a straight-line method over the service period. Share-based compensation is expensed or capitalized based on the nature of the employee’s activities. | |
Certain Significant Estimates and Contingent Liabilities | Certain Significant Estimates and Contingent Liabilities |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated and combined financial statements included elsewhere | |
Reclassifications | Reclassifications |
Certain amounts in prior periods have been reclassified to conform to the current year presentation. | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUCEMENTS |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amends FASB Accounting Standards Codification (“ASC”) Topic 205, “Presentation of Financial Statements” and ASC Topic 360, “Property, Plant, and Equipment.” This ASU alters the definition of a discontinued operation to cover only asset disposals that are a strategic shift with a major effect on an entity’s operations and finances, and calls for more extensive disclosures about a discontinued operation’s assets, liabilities, income and expenses. The guidance is effective for all disposals, or classifications as held-for-sale, of components of an entity that occur within annual periods, and interim periods within those annual periods, beginning on or after December 15, 2014. We do not expect that our adoption will have a material impact on our financial statements or disclosures in our financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, “Revenue from Contracts with Customers.” The amendments in this ASU are intended to provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices and improve disclosure requirements. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2016. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In June 2014, the FASB issued ASU No. 2014-12, which amends ASC Topic 718, “Compensation–Stock Compensation.” The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. The guidance is effective for annual periods beginning after December 15, 2015. The guidance can be applied prospectively for all awards granted or modified after the effective date or retrospectively to all awards with performance targets outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. We are evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern.” This ASU codifies management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for interim and annual periods ending after December 15, 2016 and early adoption is permitted. We still evaluating what impact, if any, the adoption of this guidance will have on our financial condition, results of operations, cash flows or financial disclosures. | |
In January 2015, the FASB issued ASU 2015-01, “Income Statement – Extraordinary and Unusual Items.” This ASU simplifies income statement classification by removing the concept of extraordinary items from U.S. GAAP. As a result, items that are both unusual and infrequent will no longer be separately reported net of tax after continuing operations. The guidance is effective for interim and annual periods ending after December 15, 2015 and early adoption is permitted. We do not expect that our adoption will have a material impact on our financial statements or disclosures in our financial statements. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Tables) (Predecessor) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Predecessor | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Supplemental Balance Sheet Disclosures | The following table presents the opening balance sheet of our Predecessor as of August 1, 2014 that was distributed to us in connection with the Spin-Off. | ||||
August 1, | |||||
(In thousands, except share amounts) | 2014 | ||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 104,152 | |||
Accounts receivable | 377,324 | ||||
Prepaid and other current assets | 126,264 | ||||
Total current assets | 607,740 | ||||
Property and equipment, at cost | 5,615,161 | ||||
Accumulated depreciation | (2,640,273 | ) | |||
Property and equipment, net | 2,974,888 | ||||
Other assets | 102,419 | ||||
Total assets | $ | 3,685,047 | |||
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Current maturities of long-term debt | $ | 4,875 | |||
Accounts payable | 129,952 | ||||
Accrued payroll and related costs | 67,256 | ||||
Taxes payable | 53,384 | ||||
Interest payable | 3,770 | ||||
Other current liabilities | 117,887 | ||||
Total current liabilities | 377,124 | ||||
Long-term debt | 1,725,125 | ||||
Deferred income taxes | 79,659 | ||||
Other liabilities | 115,621 | ||||
Total liabilities | 2,297,529 | ||||
Equity | |||||
Ordinary shares | 848 | ||||
Additional paid-in capital | 1,417,119 | ||||
Accumulated other comprehensive loss | (30,449 | ) | |||
Total equity | 1,387,518 | ||||
Total liabilities and equity | $ | 3,685,047 | |||
Acquisition_Acquisition_Tables
Acquisition Acquisition (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Business Combinations [Abstract] | |||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes our allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the acquisition date of November 17, 2014: | ||||||||
(In thousands) | Fair Value | ||||||||
ASSETS | |||||||||
Current assets | |||||||||
Accounts receivable | $ | 26,169 | |||||||
Restricted cash | 5,023 | ||||||||
Prepaid and other current assets | 17,967 | ||||||||
Total current assets | 49,159 | ||||||||
Property and equipment | 516,979 | ||||||||
Goodwill | 13,290 | ||||||||
Other assets | 25,520 | ||||||||
Total assets acquired | $ | 604,948 | |||||||
LIABILITIES | |||||||||
Current liabilities | |||||||||
Current maturities of long-term debt | $ | 32,970 | |||||||
Accounts payable | 16,227 | ||||||||
Accrued payroll and related costs | 3,754 | ||||||||
Taxes payable | 4,378 | ||||||||
Interest payable | 6,466 | ||||||||
Other current liabilities | 19,120 | ||||||||
Total current liabilities | 82,915 | ||||||||
Long-term debt | 333,697 | ||||||||
Other liabilities | 456 | ||||||||
Total liabilities assumed | $ | 417,068 | |||||||
Accumulated other comprehensive loss | (40 | ) | |||||||
Non-controlling interest | 11,351 | ||||||||
Purchase price, net of cash acquired | $ | 176,569 | |||||||
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information for the year ended December 31, 2014 and 2013, gives effect to the Prospector acquisition as if it had occurred at the beginning of the periods presented. The pro forma financial information for the year ended December 31, 2014 includes pro forma results for the period prior to the closing date of November 17, 2014 and actual results for the period from November 17, 2014 through December 31, 2014. The pro forma results are based on historical data and are not intended to be indicative of the results of future operations. | ||||||||
(In thousands, except per share amounts) | 2014 | 2013 | |||||||
Total operating revenues | $ | 42,456 | $ | 4,200 | |||||
Net loss | (55,802 | ) | (16,050 | ) | |||||
Net loss to Paragon Offshore | (55,054 | ) | (15,835 | ) | |||||
Loss per share (basic and diluted) | $ | (0.65 | ) | $ | (0.19 | ) |
EarningsLoss_Per_Share_Tables
Earnings/Loss Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income and earnings (loss) per share: | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands, except per share amounts) | 2014 | 2013 | 2012 | ||||||||||
Allocation of income - basic and diluted | |||||||||||||
Net income (loss) attributable to Paragon | $ | (646,746 | ) | $ | 360,305 | $ | 126,237 | ||||||
Earnings allocated to unvested share-based payment awards | — | — | — | ||||||||||
Net income (loss) to ordinary shareholders - Basic and diluted | $ | (646,746 | ) | $ | 360,305 | $ | 126,237 | ||||||
Weighted average shares outstanding | |||||||||||||
Basic and diluted | 84,753 | 84,753 | 84,753 | ||||||||||
Earnings (loss) per share | |||||||||||||
Basic and diluted | $ | (7.63 | ) | $ | 4.25 | $ | 1.49 | ||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||
Shares Available for Issuance and Outstanding Restricted Stock Units | Shares available for issuance and outstanding restricted stock units for our two stock incentive plans as of December 31, 2014 are as follows: | ||||||||||||||
(In shares) | Employee Plan | Director Plan | |||||||||||||
Shares available for future awards or grants | 4,719,570 | 240,258 | |||||||||||||
Outstanding unvested restricted stock units | 3,755,770 | 259,742 | |||||||||||||
Summary of Restricted Stock Activity | A summary of restricted stock activity for the year ended December 31, 2014 is as follows: | ||||||||||||||
TVRSU's Outstanding | Weighted | PVRSU's | Weighted | ||||||||||||
Average | Outstanding (1) | Average | |||||||||||||
Award-Date | Award-Date | ||||||||||||||
Fair Value | Fair Value | ||||||||||||||
Outstanding at August 1, 2014 | — | $ | — | — | $ | — | |||||||||
Awarded | 3,894,601 | 10.54 | 277,118 | 11 | |||||||||||
Vested | — | — | — | — | |||||||||||
Forfeited | (140,835 | ) | 10.7 | (15,372 | ) | 11 | |||||||||
Outstanding at December 31, 2014 | 3,753,766 | $ | 10.54 | 261,746 | $ | 11 | |||||||||
-1 | The number of PVRSU’s shown equals the units that would vest if the “maximum” level of performance is achieved. The minimum number of units is zero and the “target” level of performance is 50% of the amounts shown. |
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Long-term Debt | A summary of long-term debt at December 31, 2014 and 2013 is as follows: | ||||||||
December 31, | December 31, | ||||||||
(In thousands) | 2014 | 2013 | |||||||
Senior Notes due 2022, bearing fixed interest at 6.75% per annum | $ | 457,572 | $ | — | |||||
Senior Notes due 2024, bearing fixed interest at 7.25% per annum | 537,010 | — | |||||||
Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | 645,357 | — | |||||||
Revolving Credit Facility | 154,000 | — | |||||||
Prospector 2019 Second Lien Callable Bond | 101,000 | — | |||||||
Prospector 2018 Senior Secured Credit Facility | 265,666 | — | |||||||
Noble Credit Facilities / Commercial Paper Program | — | 1,561,141 | |||||||
Less: Current maturities of long-term debt | (272,166 | ) | — | ||||||
$ | 1,888,439 | $ | 1,561,141 | ||||||
Estimated Fair Value of Long Term Debt | The following table presents the estimated fair value of our long-term debt as of December 31, 2014: | ||||||||
December 31, 2014 | |||||||||
(In thousands) | Carrying Value | Estimated Fair Value | |||||||
Senior unsecured notes: | |||||||||
6.75% Senior Notes due July 15, 2022 | $ | 457,572 | $ | 275,115 | |||||
7.25% Senior Notes due August 15, 2024 | 537,010 | 319,521 | |||||||
Total senior unsecured notes | $ | 994,582 | $ | 594,636 | |||||
Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | $ | 645,357 | $ | 523,250 | |||||
Prospector 2019 Second Lien Callable Bond | $ | 101,000 | $ | 101,000 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | Income before income taxes consists of the following: | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
United States | $ | 70,949 | $ | 114,314 | $ | 65,574 | |||||||
Non-U.S. | (648,360 | ) | 331,596 | 109,351 | |||||||||
Total | $ | (577,411 | ) | $ | 445,910 | $ | 174,925 | ||||||
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision consists of the following: | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Current - United States | $ | 45,754 | $ | 20,732 | $ | 14,637 | |||||||
Current - Non-U.S. | 43,115 | 55,691 | 49,108 | ||||||||||
Deferred - United States | (30,391 | ) | 13,425 | (13,179 | ) | ||||||||
Deferred - Non-U.S. | 10,916 | (4,243 | ) | (1,878 | ) | ||||||||
Total | $ | 69,394 | $ | 85,605 | $ | 48,688 | |||||||
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of tax rates outside of Switzerland and the U.K. to our effective rate is shown below: | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Effect of: | |||||||||||||
Tax rates which are different than the U.K. and Swiss rates | (15.3 | )% | 17.4 | % | 28 | % | |||||||
Tax effect from asset impairment | 4.3 | % | — | % | — | % | |||||||
Change in valuation allowance | — | % | 2 | % | — | % | |||||||
Reserve for (resolution of) tax authority audits | (1.0 | )% | (0.2 | )% | (0.2 | )% | |||||||
Total | (12.0 | )% | 19.2 | % | 27.8 | % | |||||||
Schedule of Deferred Tax Assets and Liabilities | The components of the net deferred taxes are as follows: | ||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Deferred tax assets | |||||||||||||
Accrued expenses not currently deductible | $ | 3,556 | $ | — | |||||||||
Net operating loss carry forwards | 22,645 | 43,409 | |||||||||||
Deferred tax assets | 26,201 | 43,409 | |||||||||||
Less: Valuation allowance | — | (8,672 | ) | ||||||||||
Net deferred tax assets | 26,201 | 34,737 | |||||||||||
Deferred tax liabilities | |||||||||||||
Excess of net book basis over remaining tax basis of Property and equipment | (58,844 | ) | (122,581 | ) | |||||||||
Deferred taxes on unremitted earnings | (6,043 | ) | — | ||||||||||
Contract market valuation | (5,434 | ) | — | ||||||||||
Other | (838 | ) | — | ||||||||||
Deferred tax liabilities | (71,159 | ) | (122,581 | ) | |||||||||
Net deferred tax liabilities | $ | (44,958 | ) | $ | (87,844 | ) | |||||||
Schedule of Unrecognized Tax Benefits Roll Forward | The following is a reconciliation of the liabilities related to our unrecognized tax benefits, excluding interest and penalties: | ||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Gross balance at January 1, | $ | 32,336 | $ | 37,969 | $ | 44,188 | |||||||
Additions based on tax positions related to the current year | 4,442 | 532 | 536 | ||||||||||
Additions for tax positions of prior years | 1,424 | 4,599 | 2,430 | ||||||||||
Reductions for tax positions of prior years | (7,298 | ) | (214 | ) | — | ||||||||
Expiration of statutes | (1,225 | ) | (2,712 | ) | (3,130 | ) | |||||||
Tax settlements | — | (7,838 | ) | (6,055 | ) | ||||||||
Gross balance at December 31, | 29,679 | 32,336 | 37,969 | ||||||||||
Related tax benefits | — | (1,983 | ) | (6,590 | ) | ||||||||
Net balance at December 31, | $ | 29,679 | $ | 30,353 | $ | 31,379 | |||||||
Liability For Uncertain Tax Positions | The liabilities related to our unrecognized tax benefits are comprised of the following: | ||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||
Unrecognized tax benefits, excluding interest and penalties | $ | 29,679 | $ | 30,353 | |||||||||
Interest and penalties included in “Other liabilities” | 10,517 | 6,137 | |||||||||||
Unrecognized tax benefits, including interest and penalties | $ | 40,196 | $ | 36,490 | |||||||||
Employee_Benefit_Plans_Tables
Employee Benefit Plans (Tables) | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||
Schedule of Changes in Projected Benefit Obligations | A reconciliation of the changes in projected benefit obligations (“PBO”) for our pension plans is as follows: | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Benefit obligation at beginning of year | $ | 95,101 | ||||||||||||||||||||
Service cost | 4,819 | |||||||||||||||||||||
Interest cost | 2,601 | |||||||||||||||||||||
Actuarial loss (gain) | 39,499 | |||||||||||||||||||||
Amendments | (139 | ) | ||||||||||||||||||||
Benefits paid | (1,240 | ) | ||||||||||||||||||||
Plan participants' contribution | 512 | |||||||||||||||||||||
Foreign exchange rate changes | (14,806 | ) | ||||||||||||||||||||
Other: curtailment | (1,985 | ) | ||||||||||||||||||||
Benefit obligation at end of year | $ | 124,362 | ||||||||||||||||||||
Schedule of Changes in Fair Value of Plan Assets | A reconciliation of the changes in fair value of plan assets is as follows: | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 97,453 | ||||||||||||||||||||
Actual return on plan assets | 38,252 | |||||||||||||||||||||
Employer contribution | 6,565 | |||||||||||||||||||||
Benefits paid | (833 | ) | ||||||||||||||||||||
Plan participants' contributions | 512 | |||||||||||||||||||||
Expenses paid | (407 | ) | ||||||||||||||||||||
Foreign exchange rate changes | (15,951 | ) | ||||||||||||||||||||
Fair value of plan assets at end of year | $ | 125,591 | ||||||||||||||||||||
Schedule of Net Funded Status | The funded status of the plans is as follows: | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Funded status | $ | 1,229 | ||||||||||||||||||||
Schedule of Amounts Recognized in Balance Sheet | ||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Funded status | $ | 1,229 | ||||||||||||||||||||
Amounts recognized in the consolidated and combined balance sheets consist of: | ||||||||||||||||||||||
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Amounts recognized in Accumulated other comprehensive loss (“AOCL”) consist of: | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Actuarial loss (gain) | $ | 20,539 | ||||||||||||||||||||
Prior service cost (credit) | 2,063 | |||||||||||||||||||||
Deferred income tax | 309 | |||||||||||||||||||||
Accumulated other comprehensive loss | $ | 22,911 | ||||||||||||||||||||
Schedule of Net Benefit Costs | Pension cost includes the following components: | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Service cost | $ | 4,819 | ||||||||||||||||||||
Interest cost | 2,601 | |||||||||||||||||||||
Return on plan assets | (2,625 | ) | ||||||||||||||||||||
Amortization of Prior Service Cost | (16 | ) | ||||||||||||||||||||
Amortization of transition obligation | — | |||||||||||||||||||||
Amortization net actuarial loss (gain) | 1,077 | |||||||||||||||||||||
Net curtailment (gain) | (66 | ) | ||||||||||||||||||||
Net pension expense | $ | 5,790 | ||||||||||||||||||||
Schedule of Accumulated and Projected Benefit Obligations | Disaggregated information regarding our pension plans is summarized below: | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
(In thousands) | 2014 | |||||||||||||||||||||
Projected benefit obligation | $ | 124,362 | ||||||||||||||||||||
Accumulated benefit obligation | 119,632 | |||||||||||||||||||||
Fair value of plan assets | 125,591 | |||||||||||||||||||||
Schedule of Assumptions Used | The key assumptions for the plans are summarized below: | |||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
Weighted Average Assumptions Used to Determine Benefit Obligations | 2014 | |||||||||||||||||||||
Discount rate | 2.3% to 2.4% | |||||||||||||||||||||
Rate of compensation increase | 3.6 | % | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | 2014 | |||||||||||||||||||||
Discount rate | 2.7% to 3.9% | |||||||||||||||||||||
Expected long-term return on plan assets | 2.7% to 2.8% | |||||||||||||||||||||
Rate of compensation increase | 3.6 | % | ||||||||||||||||||||
Schedule of Allocation of Plan Assets | The actual fair value of our pension plans as of December 31, 2014 is as follows: | |||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||
Estimated Fair Value Measurements | ||||||||||||||||||||||
(In thousands) | Carrying | Quoted | Significant Other Observable Inputs | Significant Unobservable | ||||||||||||||||||
Amount | Prices in Active | (Level 2) | Inputs | |||||||||||||||||||
Markets | (Level 3) | |||||||||||||||||||||
(Level 1) | ||||||||||||||||||||||
Fixed Income securities: | ||||||||||||||||||||||
Corporate Bonds | $ | 32,476 | $ | — | $ | 32,477 | $ | — | ||||||||||||||
Other | 93,115 | — | — | 93,115 | ||||||||||||||||||
Total | $ | 125,591 | $ | — | $ | 32,477 | $ | 93,115 | ||||||||||||||
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets | The following table details the activity related to these investments during the year. | |||||||||||||||||||||
Market Value | ||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 68,280 | ||||||||||||||||||||
Assets sold/benefits paid | (735 | ) | ||||||||||||||||||||
Return on plan assets | 25,570 | |||||||||||||||||||||
Balance as of December 31, 2014 | $ | 93,115 | ||||||||||||||||||||
Schedule of Expected Benefit Payments | The following table summarizes our benefit payments at December 31, 2014 estimated to be paid within the next ten years: | |||||||||||||||||||||
Payments by Period | ||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Five Years | ||||||||||||||||
Thereafter | ||||||||||||||||||||||
Estimated benefit payments | $ | 18,490 | 868 | 993 | 1,168 | 1,390 | 1,618 | 12,453 | ||||||||||||||
Concentration_of_Market_and_Cr1
Concentration of Market and Credit Risk (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the carrying amount and estimated fair value of our financial instruments recognized at fair value on a recurring basis: | |||||||||||||||
December 31, 2014 | ||||||||||||||||
Estimated Fair Value Measurement | ||||||||||||||||
Carrying | Quoted | Significant | Significant | |||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets | Inputs | |||||||||||||||
(In thousands) | Amount | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets - | ||||||||||||||||
Interest rate swaps | $ | 531 | $ | — | $ | 531 | $ | — | ||||||||
Liabilities - | ||||||||||||||||
Interest rate swaps | $ | 1,530 | $ | — | $ | 1,530 | $ | — | ||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the components of “Accumulated other comprehensive loss” (“AOCL”) for the years ended December 31, 2014 and 2013 and changes in AOCL by component for the year ended December 31, 2014. All accounts within the tables are shown net of tax. | ||||||||||||||||
(In thousands) | Gains / | Defined | Foreign | Total | |||||||||||||
(Losses) on | Benefit | Currency | |||||||||||||||
Cash Flow | Pension Items (2) | Items | |||||||||||||||
Hedges (1) | |||||||||||||||||
Balance at December 31, 2013 | $ | — | $ | — | $ | (6 | ) | $ | (6 | ) | |||||||
Activity during period: | |||||||||||||||||
AOCL recorded in connection with Spin-Off | 4,027 | (21,770 | ) | (12,706 | ) | (30,449 | ) | ||||||||||
AOCL recorded in connection with Prospector acquisition | — | — | (40 | ) | (40 | ) | |||||||||||
Other comprehensive loss before reclassification | (4,041 | ) | — | (1,481 | ) | (5,522 | ) | ||||||||||
Amounts reclassified from AOCL | 14 | (1,141 | ) | — | (1,127 | ) | |||||||||||
Net other comprehensive income (loss) | (4,027 | ) | (1,141 | ) | (1,481 | ) | (6,649 | ) | |||||||||
Balance at December 31, 2014 | $ | — | $ | (22,911 | ) | $ | (14,233 | ) | $ | (37,144 | ) | ||||||
-1 | Gains / (losses) on cash flow hedges are related to our foreign currency forward contracts. Reclassifications from AOCL are recognized through “Contract drilling services operating costs and expenses” on our consolidated and combined statements of income. See Note 11, “Derivative instruments and hedging activities” for additional information. | ||||||||||||||||
-2 | Defined benefit pension items relate to actuarial losses, prior service credits, and the amortization of actuarial losses and prior service credits. Reclassifications from AOCL are recognized as expense on our consolidated and combined statements of income through either “Contract drilling services” or “General and administrative.” See Note 10, “Employee benefit plans” for additional information. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments for operating leases for years ending December 31 are as follows (in thousands): | |||
2015 | $ | 14,734 | ||
2016 | $ | 10,871 | ||
2017 | $ | 4,494 | ||
2018 | $ | 2,596 | ||
2019 | $ | 2,032 | ||
Thereafter | $ | 3,462 | ||
Schedule of Purchase Commitments | At December 31, 2014, our purchase commitments which consist of obligations outstanding to external vendors primarily related to future capital purchases, were as follows (in thousands): | |||
2015 | $ | 454,098 | ||
2016 | $ | 199,161 | ||
Schedule of Related Party Transactions | Pursuant to these agreements with Noble, the consolidated and combined balance sheet consists of the following balances due from and to Noble as of December 31, 2014 (in thousands): | |||
Balance Sheet Position | Amount | |||
Other current assets | $ | 26,386 | ||
Other assets | 6,875 | |||
Due from Noble | $ | 33,261 | ||
Accounts payable | $ | 1,655 | ||
Other current liabilities | 51,169 | |||
Other liabilities | 23,563 | |||
Due to Noble | $ | 76,387 | ||
Segment_and_Related_Informatio1
Segment and Related Information (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table presents revenues and identifiable assets by country based on the location of the service provided: | ||||||||||||||||||||
Revenues | Identifiable Assets | ||||||||||||||||||||
Year Ended December 31, | As of December 31, | ||||||||||||||||||||
(In thousands) | 2014 | 2013 | 2012 | 2014 | 2013 | ||||||||||||||||
Country: | |||||||||||||||||||||
Mexico | $ | 326,352 | $ | 367,732 | $ | 320,436 | $ | 472,032 | $ | 351,123 | |||||||||||
Brazil | 488,884 | 312,287 | 284,061 | 1,863,774 | 1,864,358 | ||||||||||||||||
United Kingdom | 193,908 | 245,789 | 141,435 | 90,410 | 196,479 | ||||||||||||||||
The Netherlands | 284,651 | 179,768 | 210,577 | 169,088 | 112,561 | ||||||||||||||||
Qatar | 94,320 | 139,891 | 74,889 | 96,702 | 130,515 | ||||||||||||||||
United States | 85,060 | 117,951 | 105,469 | 94,391 | 712,713 | ||||||||||||||||
United Arab Emirates | 139,318 | 108,256 | 79,940 | 228,284 | 152,699 | ||||||||||||||||
Nigeria | — | 107,750 | 148,961 | 11,308 | 54,539 | ||||||||||||||||
India | 79,201 | 103,282 | 58,355 | 135,909 | 200,799 | ||||||||||||||||
Other | 302,068 | 210,296 | 117,734 | 91,491 | 207,013 | ||||||||||||||||
$ | 1,993,762 | $ | 1,893,002 | $ | 1,541,857 | $ | 3,253,389 | $ | 3,982,799 | ||||||||||||
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||
Effect of Changes in Other Assets and Liabilities on Cash Flows from Operating Activities | The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Accounts receivable | $ | (178,108 | ) | $ | (34,582 | ) | $ | (116,714 | ) | ||||
Other current assets | 42,922 | 22,181 | (2,941 | ) | |||||||||
Other assets | (33,637 | ) | 16,451 | 39,484 | |||||||||
Accounts payable | 25,890 | 8,530 | (12,485 | ) | |||||||||
Other current liabilities | 14,273 | 18,645 | 4,562 | ||||||||||
Other liabilities | (29,514 | ) | (16,385 | ) | (4,920 | ) | |||||||
Net change in other assets and liabilities | $ | (158,174 | ) | $ | 14,840 | $ | (93,014 | ) | |||||
Additional Cash Flow Information | Additional cash flow information is as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2014 | 2013 | 2012 | ||||||||||
Cash paid during the period for: | |||||||||||||
Interest, net of amounts capitalized | $ | 21,109 | $ | 5,791 | $ | 3,856 | |||||||
U.S. and Non-U.S. income taxes | 85,248 | 76,423 | 63,745 | ||||||||||
Non-cash activities: | |||||||||||||
Increase (decrease) in accounts payable and accrued liabilities related to capital expenditures | $ | 1,230 | $ | (12,365 | ) | $ | (8,463 | ) | |||||
Unaudited_Interim_Financial_Da1
Unaudited Interim Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summarized Quarterly Results | Summarized quarterly results for years ended December 31, 2014 and 2013 are as follows: | ||||||||||||||||
Quarter Ended | |||||||||||||||||
(In thousands, except per share amounts) | 31-Mar | 30-Jun | 30-Sep | 31-Dec | |||||||||||||
2014 | |||||||||||||||||
Operating revenues | $ | 514,590 | $ | 478,957 | $ | 505,222 | $ | 494,993 | |||||||||
Operating income (loss) | 147,461 | 119,972 | (796,421 | ) | 4,311 | ||||||||||||
Net income (loss) attributable to Paragon Offshore | 124,566 | 95,045 | (869,160 | ) | -2 | 2,803 | |||||||||||
Earnings (loss) per share - | $ | 1.47 | $ | 1.12 | $ | (10.26 | ) | -3 | $ | 0.03 | |||||||
basic and diluted (1) | |||||||||||||||||
2013 | |||||||||||||||||
Operating revenues | $ | 454,070 | $ | 464,945 | $ | 489,682 | $ | 484,305 | |||||||||
Operating income | 102,601 | 106,143 | 187,240 | 57,761 | |||||||||||||
Net income | 82,572 | 82,544 | 157,635 | 37,555 | |||||||||||||
Earnings per share - | $ | 0.97 | $ | 0.97 | $ | 1.86 | -3 | $ | 0.44 | ||||||||
basic and diluted (1) | |||||||||||||||||
-1 | Earnings (loss) per share is computed independently for each of the quarters presented. Therefore, the sum of the quarters’ net income per share may not equal the total computed for the year. | ||||||||||||||||
-2 | Net income for the three month period ended September 30, 2014 has been revised to correct an error related to the amortization of our deferred tax liability related to the Paragon DPDS1. In connection with the impairment of the Paragon DPDS1 during the third quarter, a tax benefit should have been recorded to proportionally eliminate the deferred tax liability specifically related to the Paragon DPDS1. The third quarter tax provision as reported was $75.7 million and after revision for this additional non-cash tax benefit of $25.1 million, or $0.28 per diluted share, the tax provision was revised to $50.6 million. This revision also changes the reported net loss from $894.2 million to an as revised $869.2 million of net loss for the third quarter. We have concluded that this misstatement was not material to our consolidated and combined financial statements for the aforementioned prior period. | ||||||||||||||||
-3 | Earnings per share - basic and diluted for the three month period ended September 30, 2014 and 2013 has been revised to correct an error related to the allocation of unvested share-based awards. No earnings should have been allocated to unvested share-based payment awards in our earnings per share calculation due to our net loss in the three months ended September 30, 2014. Our basis of presentation related to weighted average unvested shares outstanding for all periods prior to the Spin-Off should not include our unvested restricted stock units that were granted to our employees in conjunction with Paragon's 2014 Employee Omnibus Incentive Plan. |
Organization_and_Basis_of_Pres2
Organization and Basis of Presentation - Additional Information (Details) | 0 Months Ended | 12 Months Ended |
Aug. 01, 2014 | Dec. 31, 2014 | |
rig | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of jackups | 34 | |
Number of floaters | 6 | |
Number of drillships | 4 | |
Number of semisubmersibles | 2 | |
Ratio of Paragon shares received per share of Noble | 0.3333 |
Organization_and_Basis_of_Pres3
Organization and Basis of Presentation - Acquisition Transaction (Details) (Prospector Offshore Drilling S.A., USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Nov. 17, 2014 | Dec. 31, 2014 | Feb. 23, 2015 | Jan. 22, 2015 |
rig | ||||
Business Acquisition [Line Items] | ||||
Initial Prospector shares acquired (in shares) | 89.3 | |||
Ownership percentage of outstanding shares following acquisition | 94.40% | |||
Cash consideration paid | $190 | $10 | ||
Additional Prospector shares acquired (in shares) | 4.1 | |||
Prospector shares owned (in shares) | 93.4 | |||
Ownership percentage following additional purchase of shares | 98.70% | |||
Number of jackups owned and operated by Prospector | 2 | |||
Number of jackups under construction | 3 | |||
Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Cash consideration paid | $202 | |||
Ownership percentage following additional purchase of shares | 100.00% | 99.60% |
Organization_and_Basis_of_Pres4
Organization and Basis of Presentation - Basis of Presentation (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Nov. 17, 2014 | Jan. 31, 2015 | Mar. 12, 2015 | Jul. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 18, 2014 | |
rig | rig | rig | |||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Number of drilling units retained by Predecessor, included in historical financial statements | 3 | ||||||||
Number of drilling units sold by Predecessor, included in historical financial statements | 3 | ||||||||
Cash and cash equivalents | $56,772,000 | $36,581,000 | $70,538,000 | $75,767,000 | |||||
Long-term Purchase Commitment [Line Items] | |||||||||
Purchase obligation due in 2015 | 454,098,000 | ||||||||
Purchase obligation due in 2016 | 199,161,000 | ||||||||
Number of jackups | 34 | ||||||||
Property and equipment, at cost | 4,842,112,000 | 6,067,066,000 | |||||||
Capital Addition Purchase Commitments [Member] | |||||||||
Long-term Purchase Commitment [Line Items] | |||||||||
Purchase obligation due in 2015 | 400,000,000 | ||||||||
Purchase obligation due in 2016 | 199,000,000 | ||||||||
Number of jackups under construction | 3 | ||||||||
Property and equipment, at cost | 32,000,000 | ||||||||
Prospector Offshore Drilling S.A. | |||||||||
Long-term Purchase Commitment [Line Items] | |||||||||
Number of jackups under construction | 3 | ||||||||
Secured Debt | Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 650,000,000 | ||||||||
Callable Bond | Acquired Bonds | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 100,000,000 | ||||||||
Callable Bond | Acquired Bonds | Prospector Offshore Drilling S.A. | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of bonds back to Prospector | 99,600,000 | ||||||||
Percentage of principal amount redeemed | 101.00% | ||||||||
Par value of Prospector bonds outstanding | 400,000 | ||||||||
Line of Credit | Acquired Senior Credit Facility | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 270,000,000 | ||||||||
Line of Credit | Acquired Senior Credit Facility | Prospector Offshore Drilling S.A. | Scenario, Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayment of remaining balance | 260,000,000 | ||||||||
Revolving Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Committed financing available | $634,000,000 |
Organization_and_Basis_of_Pres5
Organization and Basis of Presentation - Separation from Noble (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 01, 2014 |
In Thousands, unless otherwise specified | |||||
Current assets | |||||
Cash and cash equivalents | $56,772 | $36,581 | $70,538 | $75,767 | |
Accounts receivable | 539,376 | 356,241 | |||
Prepaid and other current assets | 104,644 | 51,182 | |||
Total current assets | 713,294 | 444,004 | |||
Property and equipment, at cost | 4,842,112 | 6,067,066 | |||
Accumulated depreciation | -2,431,752 | -2,607,382 | |||
Property and equipment, net | 2,410,360 | 3,459,684 | |||
Other assets | 129,735 | 79,111 | |||
Total assets | 3,253,389 | 3,982,799 | |||
Current liabilities | |||||
Current maturities of long-term debt | 272,166 | 0 | |||
Accounts payable | 160,874 | 124,442 | |||
Accrued payroll and related costs | 81,416 | 60,738 | |||
Taxes payable | 69,033 | 0 | |||
Interest payable | 33,658 | 412 | |||
Other current liabilities | 105,147 | 40,962 | |||
Total current liabilities | 722,294 | 226,554 | |||
Long-term debt | 1,888,439 | 1,561,141 | |||
Deferred income taxes | 58,497 | 101,703 | |||
Other liabilities | 89,910 | 88,068 | |||
Total liabilities | 2,759,140 | 1,977,466 | |||
Equity | |||||
Ordinary shares | 848 | 0 | |||
Additional paid-in capital | 1,423,153 | 0 | |||
Accumulated other comprehensive loss | -37,144 | -6 | |||
Total shareholders' equity | 491,608 | 2,005,333 | |||
Total liabilities and equity | 3,253,389 | 3,982,799 | |||
Predecessor | |||||
Current assets | |||||
Cash and cash equivalents | 104,152 | ||||
Accounts receivable | 377,324 | ||||
Prepaid and other current assets | 126,264 | ||||
Total current assets | 607,740 | ||||
Property and equipment, at cost | 5,615,161 | ||||
Accumulated depreciation | -2,640,273 | ||||
Property and equipment, net | 2,974,888 | ||||
Other assets | 102,419 | ||||
Total assets | 3,685,047 | ||||
Current liabilities | |||||
Current maturities of long-term debt | 4,875 | ||||
Accounts payable | 129,952 | ||||
Accrued payroll and related costs | 67,256 | ||||
Taxes payable | 53,384 | ||||
Interest payable | 3,770 | ||||
Other current liabilities | 117,887 | ||||
Total current liabilities | 377,124 | ||||
Long-term debt | 1,725,125 | ||||
Deferred income taxes | 79,659 | ||||
Other liabilities | 115,621 | ||||
Total liabilities | 2,297,529 | ||||
Equity | |||||
Ordinary shares | 848 | ||||
Additional paid-in capital | 1,417,119 | ||||
Accumulated other comprehensive loss | -30,449 | ||||
Total shareholders' equity | 1,387,518 | ||||
Total liabilities and equity | $3,685,047 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Property and Equipment, at Cost (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Capital accruals included in accounts payable | $24,000,000 | $29,000,000 | |
Overhauls and asset replacement projects costs | 2,410,360,000 | 3,459,684,000 | |
Drilling Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life or property, plant and equipment | 3 years | ||
Drilling Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life or property, plant and equipment | 30 years | ||
Other Capitalized Property Plant and Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life or property, plant and equipment | 2 years | ||
Other Capitalized Property Plant and Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life or property, plant and equipment | 25 years | ||
Overhauls and Asset Replacement Projects | |||
Property, Plant and Equipment [Line Items] | |||
Overhauls and asset replacement projects costs | 193,000,000 | 211,000,000 | |
Depreciation expense related to overhauls and asset replacement | $85,000,000 | $76,000,000 | $66,000,000 |
Overhauls and Asset Replacement Projects | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life or property, plant and equipment | 3 years | ||
Overhauls and Asset Replacement Projects | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life or property, plant and equipment | 5 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Revenue Recognition (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Prepaid and Other Current Assets and Noncurrent Other Assets | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Deferred expenses under drilling contracts | $2 | $24 |
Other Current Liabilities and Other Noncurrent Liabilities | ||
Revenue Recognition, Milestone Method [Line Items] | ||
Deferred revenue under drilling contracts | $9 | $22 |
Acquisition_Additional_Informa
Acquisition - Additional Information (Details) (Prospector Offshore Drilling S.A., USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | ||
Share data in Millions, unless otherwise specified | Nov. 17, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Feb. 23, 2015 | Jan. 22, 2015 |
rig | ||||||
Business Acquisition [Line Items] | ||||||
Initial Prospector shares acquired (in shares) | 89.3 | |||||
Ownership percentage of outstanding shares following acquisition | 94.40% | |||||
Cash consideration paid | $190,000,000 | $10,000,000 | ||||
Additional Prospector shares acquired (in shares) | 4.1 | 4.1 | 4.1 | |||
Prospector shares owned (in shares) | 93.4 | |||||
Ownership percentage following additional purchase of shares | 98.70% | 98.70% | 98.70% | |||
Number of jackups owned and operated by Prospector | 2 | |||||
Number of jackups under construction | 3 | |||||
Weighted average life of contracts | 2 years 6 months | |||||
Goodwill | 13,290,000 | |||||
Revenues from the Prospector rigs since acquisition date | 8,000,000 | |||||
Operating expenses since acquisition date | 8,000,000 | |||||
Subsequent Event | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration paid | 202,000,000 | |||||
Ownership percentage following additional purchase of shares | 100.00% | 99.60% | ||||
Contract Drilling Services | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition costs | 4,000,000 |
Acquisition_Allocation_of_Purc
Acquisition - Allocation of Purchase Price to the Estimated Fair Values of the Assets Acquired and Liabilities Assumed (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 17, 2014 |
Current liabilities | ||||
Purchase price, net of cash acquired | $176,569 | $0 | $0 | |
Prospector Offshore Drilling S.A. | ||||
Current assets | ||||
Accounts receivable | 26,169 | |||
Restricted cash | 5,023 | |||
Prepaid and other current assets | 17,967 | |||
Total current assets | 49,159 | |||
Property and equipment | 516,979 | |||
Goodwill | 13,290 | |||
Other assets | 25,520 | |||
Total assets acquired | 604,948 | |||
Current liabilities | ||||
Current maturities of long-term debt | 32,970 | |||
Accounts payable | 16,227 | |||
Accrued payroll and related costs | 3,754 | |||
Taxes payable | 4,378 | |||
Interest payable | 6,466 | |||
Other current liabilities | 19,120 | |||
Total current liabilities | 82,915 | |||
Long-term debt | 333,697 | |||
Other liabilities | 456 | |||
Total liabilities assumed | 417,068 | |||
Accumulated other comprehensive loss | -40 | |||
Non-controlling interest | 11,351 | |||
Purchase price, net of cash acquired | $176,569 |
Acquisition_Unaudited_Pro_Form
Acquisition - Unaudited Pro Forma Financial Information (Details) (Prospector Offshore Drilling S.A., USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Prospector Offshore Drilling S.A. | ||
Business Acquisition, Pro Forma Information [Abstract] | ||
Total operating revenues | $42,456 | $4,200 |
Net Loss | -55,802 | -16,050 |
Net Loss to Paragon Offshore | ($55,054) | ($15,835) |
Earnings per share (basic) (in dollars per share) | ($0.65) | ($0.19) |
Earnings per share (diluted) (in dollars per share) | ($0.65) | ($0.19) |
EarningsLoss_Per_Share_Additio
Earnings/Loss Per Share - Additional Information (Details) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Earnings Per Share [Abstract] | |
Distribution by former parent (in shares) | 84,753 |
EarningsLoss_Per_Share_Computa
Earnings/Loss Per Share - Computation of Basic and Diluted Net Income Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allocation of income - basic and diluted | |||||||||||
Net income (loss) attributable to Paragon | $2,803 | ($869,160) | $95,045 | $124,566 | $37,555 | $157,635 | $82,544 | $82,572 | ($646,746) | $360,305 | $126,237 |
Earnings allocated to unvested share-based payment awards, basic | 0 | 0 | 0 | ||||||||
Earnings allocated to unvested share-based payment awards, diluted | 0 | 0 | 0 | ||||||||
Net income to ordinary shareholders - basic | -646,746 | 360,305 | 126,237 | ||||||||
Net income to ordinary shareholders - diluted | ($646,746) | $360,305 | $126,237 | ||||||||
Weighted-average shares outstanding | |||||||||||
Basic and diluted (in shares) | 84,753 | 84,753 | 84,753 | ||||||||
Earnings (loss) per share | |||||||||||
Basic and diluted (usd per share) | $0.03 | ($10.26) | $1.12 | $1.47 | $0.44 | $1.86 | $0.97 | $0.97 | ($7.63) | $4.25 | $1.49 |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Details) (USD $) | 0 Months Ended | 5 Months Ended | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Aug. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation costs | $7.70 | ||
Time-Vested Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units awarded (maximum available) | 2,675,839 | 3,894,601 | |
Vesting period | 3 years | ||
Share-based amortization recognized | 26 | 26 | |
RSU weighted-average period of recognition | 1 year 9 months 18 days | ||
Performance-Vested Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units awarded (maximum available) | 277,118 | 277,118 | |
Share-based amortization recognized | $1 | $1 | |
RSU weighted-average period of recognition | 1 year 8 months 12 days | ||
Employee Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum limit of shares authorized | 8,475,340 | ||
Percentage of shares outstanding authorized for stock options | 10.00% | ||
Director Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum limit of shares authorized | 500,000 | ||
Predecessor | Performance-Vested Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Noble performance-vested restricted stock performance cycle | 36 months | ||
Predecessor | Noble's 1991 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | 0 | |
Maximum | Predecessor | Noble's 1991 Plan | Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term to exercise stock options | 5 years |
ShareBased_Compensation_Shares
Share-Based Compensation - Shares Available for Issuance and Outstanding Restricted Stock Units (Details) | 12 Months Ended |
Dec. 31, 2014 | |
incentive_plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of stock incentive plans | 2 |
Director Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for future awards or grants | 240,258,000 |
Employee Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for future awards or grants | 4,719,570,000 |
Restricted Stock Units (RSUs) | Director Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding unvested restricted stock units | 259,742,000 |
Restricted Stock Units (RSUs) | Employee Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding unvested restricted stock units | 3,755,770,000 |
ShareBased_Compensation_Restri
Share-Based Compensation - Restricted Stock Activity (Details) (USD $) | 0 Months Ended | 5 Months Ended | 12 Months Ended |
Aug. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
Time-Vested Restricted Shares | |||
RSU's Outstanding | |||
Outstanding at August 1, 2014 | 0 | 0 | |
Awarded | 2,675,839 | 3,894,601 | |
Vested | 0 | ||
Forfeited | -140,835 | ||
Outstanding at December 31, 2014 | 3,753,766 | 3,753,766 | |
Weighted Average Award-Date Fair Value | |||
Outstanding at August 1, 2014 | $0 | $0 | |
Awarded | $10.54 | ||
Vested | $0 | ||
Forfeited | $10.70 | ||
Outstanding at December 31, 2014 | $10.54 | $10.54 | |
Performance-Vested Restricted Shares | |||
RSU's Outstanding | |||
Outstanding at August 1, 2014 | 0 | 0 | |
Awarded | 277,118 | 277,118 | |
Vested | 0 | ||
Forfeited | -15,372 | ||
Outstanding at December 31, 2014 | 261,746 | 261,746 | |
Weighted Average Award-Date Fair Value | |||
Outstanding at August 1, 2014 | $0 | $0 | |
Awarded | $11 | ||
Vested | $0 | ||
Forfeited | $11 | ||
Outstanding at December 31, 2014 | $11 | $11 | |
Minimum number of performance vested shares | 0 | ||
Target level of performance | 50.00% |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 6 Months Ended | 12 Months Ended | 3 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||||||
Capital expenditures | $261,641,000 | $366,361,000 | $532,404,000 | |||
Interest expense capitalized | 3,000,000 | |||||
Loss on Impairment | ||||||
Tangible Asset Impairment Charges | 1,100,000,000 | 1,059,487,000 | 43,688,000 | 0 | ||
Gain on Disposal of Assets, net | ||||||
Sale of the Noble Lewis Dugger | 6,570,000 | 61,000,000 | 0 | |||
Gain on sale of assets | 0 | 35,646,000 | 0 | |||
Predecessor | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Capital expenditures | 366,000,000 | |||||
Interest expense capitalized | 6,000,000 | |||||
Gain on Disposal of Assets, net | ||||||
Sale of the Noble Lewis Dugger | 61,000,000 | |||||
Gain on sale of assets | 36,000,000 | |||||
Drilling Rigs | ||||||
Loss on Impairment | ||||||
Tangible Asset Impairment Charges | 1,100,000,000 | 130,000,000 | ||||
Floating Production Storage and Offloading | Predecessor | ||||||
Loss on Impairment | ||||||
Tangible Asset Impairment Charges | 40,000,000 | |||||
Submersible Rigs | Predecessor | ||||||
Loss on Impairment | ||||||
Number of rigs with impairment charges | 2 | |||||
Tangible Asset Impairment Charges | $4,000,000 |
Debt_Summary_of_LongTerm_Debt_
Debt - Summary of Long-Term Debt (Details) (USD $) | Dec. 31, 2014 | Jul. 18, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
Less: Current maturities of long-term debt | ($272,166) | $0 | |
Long-term debt | 1,888,439 | 1,561,141 | |
Senior Notes | 6.75% Senior Notes due July 15, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 457,572 | 0 | |
Stated interest rate | 6.75% | 6.75% | |
Senior Notes | 7.25% Senior Notes due August 15, 2024 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 537,010 | 0 | |
Stated interest rate | 7.25% | 7.25% | |
Secured Debt | Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | |||
Debt Instrument [Line Items] | |||
Long-term debt | 645,357 | 0 | |
Term loan facility effective interest rate | 3.75% | ||
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 154,000 | 0 | |
Line of Credit | 2018 Senior Secured Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 265,666 | 0 | |
Line of Credit | Noble Credit Facilities / Commercial Paper Program | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 1,561,141 | |
Callable Bond | 2019 Second Lien Callable Bond | |||
Debt Instrument [Line Items] | |||
Long-term debt | $101,000 | $0 |
Debt_Additional_Information_De
Debt - Additional Information (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||
Jul. 18, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 17, 2014 | Jan. 31, 2015 | Jun. 17, 2014 | Mar. 12, 2015 | 19-May-14 | |
rig | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate letters of credit issued | $21,000,000 | ||||||||
Number of rigs not used to secure debt | 3 | ||||||||
Debt issuance cost | 35,000,000 | ||||||||
Recognized gain on debt retirement as a result of repurchase | 18,675,000 | 0 | 0 | ||||||
Prospector Offshore Drilling S.A. | Interest Rate Swap | |||||||||
Debt Instrument [Line Items] | |||||||||
Fixed interest rate | 1.51% | ||||||||
Predecessor | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of intercompany indebtedness | 1,700,000,000 | ||||||||
Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 1,080,000,000 | ||||||||
Principal amount of repurchased and cancelled Senior Notes | 85,000,000 | ||||||||
Repurchase of Senior Notes | 67,000,000 | ||||||||
Recognized gain on debt retirement as a result of repurchase | 19,000,000 | ||||||||
Senior Notes | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of repurchased and cancelled Senior Notes | 11,000,000 | ||||||||
Repurchase of Senior Notes | 7,000,000 | ||||||||
Senior Notes | 6.75% Senior Notes due July 15, 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 500,000,000 | ||||||||
Stated interest rate | 6.75% | 6.75% | |||||||
Principal amount of repurchased and cancelled Senior Notes | 42,000,000 | ||||||||
Debt outstanding | 457,572,000 | 0 | |||||||
Senior Notes | 6.75% Senior Notes due July 15, 2022 | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 6.75% | ||||||||
Principal amount of repurchased and cancelled Senior Notes | 1,000,000 | ||||||||
Senior Notes | 7.25% Senior Notes due August 15, 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 580,000,000 | ||||||||
Stated interest rate | 7.25% | 7.25% | |||||||
Principal amount of repurchased and cancelled Senior Notes | 43,000,000 | ||||||||
Debt outstanding | 537,010,000 | 0 | |||||||
Senior Notes | 7.25% Senior Notes due August 15, 2024 | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 7.25% | ||||||||
Principal amount of repurchased and cancelled Senior Notes | 10,000,000 | ||||||||
Secured Debt | Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | |||||||||
Debt Instrument [Line Items] | |||||||||
Term loan facility effective interest rate | 3.75% | ||||||||
Par value of Prospector bonds outstanding | 650,000,000 | ||||||||
Quarterly debt principal payments | 1,600,000 | ||||||||
Original issue discount | 0.50% | ||||||||
Debt outstanding | 645,357,000 | 0 | |||||||
Secured Debt | Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Reference rate margin | 2.75% | ||||||||
Minimum LIBOR rate | 1.00% | ||||||||
Secured Debt | Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Reference rate margin | 1.75% | ||||||||
Callable Bond | Acquired Bonds | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt outstanding | 101,000,000 | 0 | |||||||
Callable Bond | Acquired Bonds | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 100,000,000 | ||||||||
Stated interest rate | 7.75% | ||||||||
Bondholders' put price percentage, par value of bonds back to Prospector | 101.00% | ||||||||
Debt outstanding | 101,000,000 | ||||||||
Callable Bond | Acquired Bonds | Subsequent Event | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 400,000 | ||||||||
Par value of bonds back to Prospector | 99,600,000 | ||||||||
Percentage of principal amount redeemed | 101.00% | ||||||||
Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum amount available under credit facility | 800,000,000 | ||||||||
Revolving credit facility maturity period | 5 years | ||||||||
Outstanding revolving credit facility | 154,000,000 | ||||||||
Weighted-average interest rate | 2.89% | ||||||||
Aggregate letters of credit issued | 12,000,000 | ||||||||
Actual net leverage ratio | 2 | ||||||||
Actual interest coverage ratio | 8.3 | ||||||||
Debt outstanding | 154,000,000 | 0 | |||||||
Line of Credit | Revolving Credit Facility | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest coverage ratio requirement | 3 | ||||||||
Line of Credit | Revolving Credit Facility | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Net leverage ratio requirement | 4 | ||||||||
Line of Credit | Revolving Credit Facility | LIBOR | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Reference rate margin | 1.50% | ||||||||
Line of Credit | Revolving Credit Facility | LIBOR | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Reference rate margin | 2.50% | ||||||||
Line of Credit | Letter of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum amount available under credit facility | 800,000,000 | ||||||||
Line of Credit | Noble Credit Facilities / Commercial Paper Program | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt outstanding | 0 | 1,561,141,000 | |||||||
Line of Credit | Noble Credit Facilities / Commercial Paper Program | Predecessor | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of credit facilities | 3 | ||||||||
Maximum amount available under credit facility | 2,900,000,000 | ||||||||
Line of Credit | Noble Credit Facilities / Commercial Paper Program | Commercial Paper | Predecessor | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum amount available under credit facility | 2,700,000,000 | ||||||||
Line of Credit | 2018 Senior Secured Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt outstanding | 265,666,000 | 0 | |||||||
Line of Credit | 2018 Senior Secured Credit Facility | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Par value of Prospector bonds outstanding | 270,000,000 | ||||||||
Line of Credit | 2018 Senior Secured Credit Facility | Prospector Offshore Drilling S.A. | Interest Rate Swap | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding borrowings | 133,000,000 | ||||||||
Line of Credit | 2018 Senior Secured Credit Facility | Minimum | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Minimum percentage of debt required to hedge | 50.00% | ||||||||
Line of Credit | 2018 Senior Secured Credit Facility | LIBOR | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Margin percentage in addition to LIBOR | 3.50% | ||||||||
Line of Credit | Acquired Senior Credit Facility, Prospector 5 Tranche [Member] | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum amount available under credit facility | 140,000,000 | ||||||||
Debt outstanding | 140,000,000 | ||||||||
Line of Credit | Acquired Senior Credit Facility, Prospector 1 Tranche [Member] | Prospector Offshore Drilling S.A. | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum amount available under credit facility | 130,000,000 | ||||||||
Debt outstanding | $126,000,000 |
Debt_Estimated_Fair_Value_of_L
Debt - Estimated Fair Value of Long-Term Debt (Details) (USD $) | Dec. 31, 2014 | Jul. 18, 2014 |
In Thousands, unless otherwise specified | ||
Senior Notes | 6.75% Senior Notes due July 15, 2022 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6.75% | 6.75% |
Senior Notes | 7.25% Senior Notes due August 15, 2024 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.25% | 7.25% |
Secured Debt | Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | ||
Debt Instrument [Line Items] | ||
Term loan facility effective interest rate | 3.75% | |
Carrying Amount | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt fair value | 994,582 | |
Carrying Amount | Senior Notes | 6.75% Senior Notes due July 15, 2022 | ||
Debt Instrument [Line Items] | ||
Debt fair value | 457,572 | |
Carrying Amount | Senior Notes | 7.25% Senior Notes due August 15, 2024 | ||
Debt Instrument [Line Items] | ||
Debt fair value | 537,010 | |
Carrying Amount | Secured Debt | Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | ||
Debt Instrument [Line Items] | ||
Debt fair value | 645,357 | |
Carrying Amount | Callable Bond | 2019 Second Lien Callable Bond | ||
Debt Instrument [Line Items] | ||
Debt fair value | 101,000 | |
Estimated Fair Value [Member] | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt fair value | 594,636 | |
Estimated Fair Value [Member] | Senior Notes | 6.75% Senior Notes due July 15, 2022 | ||
Debt Instrument [Line Items] | ||
Debt fair value | 275,115 | |
Estimated Fair Value [Member] | Senior Notes | 7.25% Senior Notes due August 15, 2024 | ||
Debt Instrument [Line Items] | ||
Debt fair value | 319,521 | |
Estimated Fair Value [Member] | Secured Debt | Term Loan Facility, bearing interest at 3.75%, net of unamortized discount | ||
Debt Instrument [Line Items] | ||
Debt fair value | 523,250 | |
Estimated Fair Value [Member] | Callable Bond | 2019 Second Lien Callable Bond | ||
Debt Instrument [Line Items] | ||
Debt fair value | 101,000 |
Gain_on_Contract_SettlementsEx1
Gain on Contract Settlements/Extinguishment, Net - Additional Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2013 |
Noble Corporation PLC | ||||
Gain Contingencies [Line Items] | ||||
Gain related to settlement | $45 | |||
Predecessor | ||||
Gain Contingencies [Line Items] | ||||
Gain related to settlement | 5 | 23 | ||
Gain on contract termination | $2 |
Income_Taxes_Income_Before_Tax
Income Taxes - Income Before Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
United States | $70,949 | $114,314 | $65,574 |
Non-U.S. | -648,360 | 331,596 | 109,351 |
Income (loss) before income taxes | ($577,411) | $445,910 | $174,925 |
Income_Taxes_Income_Tax_Provis
Income Taxes - Income Tax Provision (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | ||||
Current - United States | $45,754 | $20,732 | $14,637 | |
Current - Non-U.S. | 43,115 | 55,691 | 49,108 | |
Deferred - United States | -30,391 | 13,425 | -13,179 | |
Deferred - Non-U.S. | 10,916 | -4,243 | -1,878 | |
Total | $50,600 | $69,394 | $85,605 | $48,688 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Details) (USD $) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes [Line Items] | ||||
Effective tax rate | -12.00% | 19.20% | 27.80% | |
Pre-tax loss | ($577,411,000) | $445,910,000 | $174,925,000 | |
Loss on impairment | 1,100,000,000 | 1,059,487,000 | 43,688,000 | 0 |
Deferred tax assets | 26,201,000 | 26,201,000 | 43,409,000 | |
Deferred tax asset valuation allowance | 0 | 0 | 8,672,000 | |
Interest and penalties resulting in income tax expense | 2,000,000 | 1,000,000 | 4,000,000 | |
Reserve for uncertain tax positions, excluding interest and penalties | 40,196,000 | 40,196,000 | 36,490,000 | |
Unrecognized tax benefits that would impact effective tax rate | 40,000,000 | 40,000,000 | ||
Her Majesty's Revenue and Customs (HMRC) | ||||
Income Taxes [Line Items] | ||||
Statutory tax rate for the United Kingdom | 21.00% | |||
Mexican Tax Authority | Mexico | ||||
Income Taxes [Line Items] | ||||
Net operating loss carryforward with expiration | $13,000,000 | $13,000,000 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Statutory and Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Effect of: | |||
Tax rates which are different than the U.K. and Swiss rates | -15.30% | 17.40% | 28.00% |
Tax effect from asset impairment | 4.30% | 0.00% | 0.00% |
Change in valuation allowance | 0.00% | 2.00% | 0.00% |
Reserve for (resolution of) tax authority audits | -1.00% | -0.20% | -0.20% |
Total | -12.00% | 19.20% | 27.80% |
Income_Taxes_Components_of_Net
Income Taxes - Components of Net Deferred Taxes (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets | ||
Accrued expenses not currently deductible | $3,556 | $0 |
Net operating loss carry forwards | 22,645 | 43,409 |
Deferred tax assets | 26,201 | 43,409 |
Less: Valuation allowance | 0 | -8,672 |
Net deferred tax assets | 26,201 | 34,737 |
Deferred tax liabilities | ||
Excess of net book basis over remaining tax basis of Property and equipment | -58,844 | -122,581 |
Deferred taxes on unremitted earnings | -6,043 | 0 |
Contract market valuation | -5,434 | 0 |
Other | -838 | 0 |
Deferred tax liabilities | -71,159 | -122,581 |
Net deferred tax liabilities | ($44,958) | ($87,844) |
Income_Taxes_Reconciliation_of1
Income Taxes - Reconciliation of Reserve for Uncertain Tax Positions (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross balance at January 1, | $32,336 | $37,969 | $44,188 |
Additions based on tax positions related to the current year | 4,442 | 532 | 536 |
Additions for tax positions of prior years | 1,424 | 4,599 | 2,430 |
Reductions for tax positions of prior years | -7,298 | -214 | 0 |
Expiration of statutes | -1,225 | -2,712 | -3,130 |
Tax settlements | 0 | -7,838 | -6,055 |
Gross balance at December 31, | 29,679 | 32,336 | 37,969 |
Related tax benefits | 0 | -1,983 | -6,590 |
Net balance at December 31, | $29,679 | $30,353 | $31,379 |
Income_Taxes_Liabilities_Relat
Income Taxes - Liabilities Related to Unrecognized Tax Benefits (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits, excluding interest and penalties | $29,679 | $30,353 | $31,379 |
Interest and penalties included in Other liabilities | 10,517 | 6,137 | |
Unrecognized tax benefits, including interest and penalties | $40,196 | $36,490 |
Employee_Benefit_Plans_Additio
Employee Benefit Plans - Additional Information (Details) (USD $) | 5 Months Ended | 12 Months Ended | 0 Months Ended |
Dec. 31, 2014 | Dec. 31, 2014 | Aug. 01, 2014 | |
pension_plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension expense | $6,000,000 | ||
Other postretirement benefit expense | 2,000,000 | ||
Non-U.S. Defined Benefit Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Estimated amortization related to prior service cost (less than) | 1,000,000 | ||
Estimated amortization related to actuarial loss (less than) | 1,000,000 | ||
Employer contributions to non-U.S. pension plans | 6,565,000 | ||
Non-U.S. Defined Benefit Plan | Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected contributions next fiscal year | $5,000,000 | ||
Non-U.S. Defined Benefit Plan | Predecessor | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Number of defined benefit pension plans at spin-off | 2 | ||
Non-U.S. Defined Benefit Plan | Debt Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan target asset allocation (as a percent) | 100.00% |
Employee_Benefit_Plans_Reconci
Employee Benefit Plans - Reconciliation of Changes in Projected Benefit Obligations for Non-US Plan (Details) (Non-U.S. Defined Benefit Plan, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Non-U.S. Defined Benefit Plan | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |
Benefit obligation at beginning of year | $95,101 |
Service cost | 4,819 |
Interest cost | 2,601 |
Actuarial loss (gain) | 39,499 |
Amendments | -139 |
Benefits paid | -1,240 |
Plan participants' contribution | 512 |
Foreign exchange rate changes | -14,806 |
Other: curtailment | -1,985 |
Benefit obligation at end of year | $124,362 |
Employee_Benefit_Plans_Reconci1
Employee Benefit Plans - Reconciliation of the Changes in Fair Value of Plan Assets (Details) (Non-U.S. Defined Benefit Plan, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Non-U.S. Defined Benefit Plan | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |
Fair value of plan assets at beginning of year | $97,453 |
Actual return on plan assets | 38,252 |
Employer contribution | 6,565 |
Benefits paid | -833 |
Plan participants' contribution | 512 |
Expenses paid | -407 |
Foreign exchange rate changes | -15,951 |
Fair value of plan assets at end of year | $125,591 |
Employee_Benefit_Plans_Funded_
Employee Benefit Plans - Funded Status of the Plans (Details) (Non-U.S. Defined Benefit Plan, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Non-U.S. Defined Benefit Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Funded status | $1,229 |
Employee_Benefit_Plans_Amounts
Employee Benefit Plans - Amounts Recognized in the Consolidated Balance Sheets (Details) (Non-U.S. Defined Benefit Plan, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Non-U.S. Defined Benefit Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Other assets (noncurrent) | $1,229 |
Accumulated other comprehensive loss recognized in financial statements | 22,911 |
Net amount recognized | $24,140 |
Employee_Benefit_Plans_Amounts1
Employee Benefit Plans - Amounts Recognized in Other Comprehensive Loss (Details) (Non-U.S. Defined Benefit Plan, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Non-U.S. Defined Benefit Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Actuarial loss (gain) | $20,539 |
Prior service cost (credit) | 2,063 |
Deferred income tax | 309 |
Accumulated other comprehensive loss | $22,911 |
Employee_Benefit_Plans_Pension
Employee Benefit Plans - Pension Costs (Details) (Non-U.S. Defined Benefit Plan, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Non-U.S. Defined Benefit Plan | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |
Service cost | $4,819 |
Interest cost | 2,601 |
Return on plan assets | -2,625 |
Amortization of Prior Service Cost | -16 |
Amortization of transition obligation | 0 |
Amortization net actuarial loss (gain) | 1,077 |
Net curtailment (gain) | -66 |
Net Pension Expense | $5,790 |
Employee_Benefit_Plans_Disaggr
Employee Benefit Plans - Disaggregated Plan Information (Details) (Non-U.S. Defined Benefit Plan, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Non-U.S. Defined Benefit Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Projected benefit obligation | $124,362 | $95,101 |
Accumulated benefit obligation | 119,632 | |
Fair value of plan assets | $125,591 | $97,453 |
Employee_Benefit_Plans_Key_Pla
Employee Benefit Plans - Key Plan Assumptions (Details) (Non-U.S. Defined Benefit Plan) | 12 Months Ended |
Dec. 31, 2014 | |
Weighted Average Assumptions Used to Determine Benefit Obligations | |
Rate of compensation increase | 3.60% |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | |
Rate of compensation increase | 3.60% |
Minimum | |
Weighted Average Assumptions Used to Determine Benefit Obligations | |
Discount rate | 2.30% |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | |
Discount rate | 2.70% |
Expected long-term return on plan assets | 2.70% |
Maximum | |
Weighted Average Assumptions Used to Determine Benefit Obligations | |
Discount rate | 2.40% |
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | |
Discount rate | 3.90% |
Expected long-term return on plan assets | 2.80% |
Employee_Benefit_Plans_Fair_Va
Employee Benefit Plans - Fair Value of Pension Plans (Details) (Non-U.S. Defined Benefit Plan, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $125,591 | $97,453 |
Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 32,477 | |
Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 93,115 | 68,280 |
Corporate Bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 32,476 | |
Corporate Bonds | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Corporate Bonds | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 32,477 | |
Corporate Bonds | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 93,115 | |
Other | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Other | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
Other | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $93,115 |
Employee_Benefit_Plans_Defined
Employee Benefit Plans - Defined Benefit Plan Assets, Level 3 Reconciliation (Details) (Non-U.S. Defined Benefit Plan, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] [Abstract] | |
Fair value of plan assets at beginning of year | $97,453 |
Return on plan assets | 38,252 |
Fair value of plan assets at end of year | 125,591 |
Level 3 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] [Abstract] | |
Fair value of plan assets at beginning of year | 68,280 |
Assets sold/benefits paid | -735 |
Return on plan assets | 25,570 |
Fair value of plan assets at end of year | $93,115 |
Employee_Benefit_Plans_Future_
Employee Benefit Plans - Future Estimated Benefit Payments (Details) (Non-U.S. Defined Benefit Plan, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Non-U.S. Defined Benefit Plan | |
Estimated benefit payments | |
Total | $18,490 |
2015 | 868 |
2016 | 993 |
2017 | 1,168 |
2018 | 1,390 |
2019 | 1,618 |
Five Years Thereafter | $12,453 |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Jun. 13, 2014 | Dec. 31, 2013 | |
2018 Senior Secured Credit Facility | Line of Credit | Prospector Offshore Drilling S.A. | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Minimum percentage of debt required to hedge | 50.00% | ||
Interest Rate Swap | Prospector Offshore Drilling S.A. | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Outstanding derivative contracts | $135,000,000 | ||
Fixed interest rate | 1.51% | ||
Interest Rate Swap | Prospector Offshore Drilling S.A. | Other current liabilities | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Interest rate swaps recorded in other current liabilities | 2,000,000 | ||
Interest Rate Swap | Prospector Offshore Drilling S.A. | Other noncurrent assets | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Interest rate swaps recorded in other long-term assets | 1,000,000 | ||
Interest Rate Swap | 2018 Senior Secured Credit Facility | Line of Credit | Prospector Offshore Drilling S.A. | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Long-term debt | 133,000,000 | ||
Interest Expense | Interest Rate Swap | Prospector Offshore Drilling S.A. | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Interest rate swaps recorded in interest expense net of amount capitalized | 78,000 | ||
Cash Flow Hedging | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Outstanding derivative contracts | 0 | ||
Unrealized gains (losses) related to forward contracts recorded in AOCI | 0 | ||
Cash Flow Hedging | Foreign Exchange Forward | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts entered and settled | 58,000,000 | ||
Outstanding derivative contracts | 0 | ||
Unrealized gains (losses) related to forward contracts recorded in AOCI | 0 | ||
Gain (loss) recognized in income statement as a result of ineffectiveness | 0 | ||
Cash Flow Hedging | Contract Drilling Services | Foreign Exchange Forward | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (loss) on derivative contracts reclassified from OCI | 14,000 | ||
Cash Flow Hedging | Gain (Loss) on Derivative Instruments | Foreign Exchange Forward | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (loss) recognized in income statement as a result of excluding amounts from hedge assessment | $0 |
Concentration_of_Market_and_Cr2
Concentration of Market and Credit Risk - Carrying Amount and Estimated Fair Value of Financial Instruments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Carrying Amount | |
Assets | |
Interest rate swaps | $531 |
Liabilities | |
Interest rate swaps | 1,530 |
Level 1 | |
Assets | |
Interest rate swaps | 0 |
Liabilities | |
Interest rate swaps | 0 |
Level 2 | |
Assets | |
Interest rate swaps | 531 |
Liabilities | |
Interest rate swaps | 1,530 |
Level 3 | |
Assets | |
Interest rate swaps | 0 |
Liabilities | |
Interest rate swaps | $0 |
Concentration_of_Market_and_Cr3
Concentration of Market and Credit Risk - Additional Information (Details) (Customer Concentration Risk [Member], Operating Revenue [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
PetrC3leos Mexicanos | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Percent of operating revenues contributed by major customers | 16.00% | 19.00% | 21.00% |
Petrobras [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Percent of operating revenues contributed by major customers | 23.00% | 17.00% | 18.00% |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - Components of and Changes in Accumulated Other Comprehensive Loss (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at December 31, 2013 | ($6) | ||
Activity during period: | |||
AOCL recorded in connection with Spin-Off | -30,449 | ||
AOCL recorded in connection with Prospector acquisition | -40 | ||
Other comprehensive loss before reclassification | -5,522 | ||
Amounts reclassified from AOCL | -1,127 | ||
Total other comprehensive income (loss), net | -6,649 | 179 | 1,743 |
Balance at December 31, 2014 | -37,144 | -6 | |
Gains / (Losses on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at December 31, 2013 | 0 | ||
Activity during period: | |||
AOCL recorded in connection with Spin-Off | 4,027 | ||
AOCL recorded in connection with Prospector acquisition | 0 | ||
Other comprehensive loss before reclassification | -4,041 | ||
Amounts reclassified from AOCL | 14 | ||
Total other comprehensive income (loss), net | -4,027 | ||
Balance at December 31, 2014 | 0 | ||
Defined Benefit Pension Items | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at December 31, 2013 | 0 | ||
Activity during period: | |||
AOCL recorded in connection with Spin-Off | -21,770 | ||
AOCL recorded in connection with Prospector acquisition | 0 | ||
Other comprehensive loss before reclassification | 0 | ||
Amounts reclassified from AOCL | -1,141 | ||
Total other comprehensive income (loss), net | -1,141 | ||
Balance at December 31, 2014 | -22,911 | ||
Foreign Currency Items | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at December 31, 2013 | -6 | ||
Activity during period: | |||
AOCL recorded in connection with Spin-Off | -12,706 | ||
AOCL recorded in connection with Prospector acquisition | -40 | ||
Other comprehensive loss before reclassification | -1,481 | ||
Amounts reclassified from AOCL | 0 | ||
Total other comprehensive income (loss), net | -1,481 | ||
Balance at December 31, 2014 | ($14,233) |
Deferred_Revenue_and_Costs_Add
Deferred Revenue and Costs - Additional Information (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Other Current Liabilities and Other Noncurrent Liabilities | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred Revenue | $9 | $22 |
Prepaid and Other Current Assets and Noncurrent Other Assets | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred expenses under drilling contracts | $2 | $24 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Future Minimum Lease Payments (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2015 | $14,734,000 |
2016 | 10,871,000 |
2017 | 4,494,000 |
2018 | 2,596,000 |
2019 | 2,032,000 |
Thereafter | 3,462,000 |
Operating lease rent expense | $16,000,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Purchase Commitments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Purchase Obligation, Fiscal Year Maturity [Abstract] | |
2015 | $454,098 |
2016 | $199,161 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Additional Information (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
rig | |
Other Commitments [Line Items] | |
Shipyard and purchase commitments | 653,000,000 |
Letters of credit, amount outstanding | 21,000,000 |
Performance bonds | 110,000,000 |
Noble Corporation PLC | |
Other Commitments [Line Items] | |
Due from Noble | 33,261,000 |
Due to Noble | 76,387,000 |
Tax Audit Claims Primarily in Mexico and Brazil | Tax Audit Claims | |
Other Commitments [Line Items] | |
Taxes and other contingencies | 267,000,000 |
Claims subject to indemnity by Noble | 50,000,000 |
Tax Audit Claims Primarily in Mexico and Brazil | Tax Audit Claims in Mexico Result of Spin-Off | |
Other Commitments [Line Items] | |
Taxes and other contingencies | 37,000,000 |
PetrC3leos Mexicanos | Withholding Taxes | |
Other Commitments [Line Items] | |
Taxes and other contingencies | 106,000,000 |
Claims subject to indemnity by Noble | 30,000,000 |
Noble Corporation PLC | Brazil | |
Other Commitments [Line Items] | |
Number of Noble Rigs Operating in Brazil | 1 |
Commitments_and_Contingencies_4
Commitments and Contingencies - Balance Sheet Position of Balances Due From and To Noble (Details) (Noble Corporation PLC, USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Other Commitments [Line Items] | |
Due from Noble | $33,261 |
Due to Noble | 76,387 |
Other current assets | |
Other Commitments [Line Items] | |
Other current assets | 26,386 |
Other assets | |
Other Commitments [Line Items] | |
Other assets | 6,875 |
Accounts payable | |
Other Commitments [Line Items] | |
Due to Noble, current | 1,655 |
Other current liabilities | |
Other Commitments [Line Items] | |
Due to Noble, current | 51,169 |
Other liabilities | |
Other Commitments [Line Items] | |
Other liabilities | $23,563 |
Related_Parties_Including_Rela1
Related Parties (Including Relationship with Parent and Corporate Allocations) - Additional Information (Details) (Noble Corporation PLC, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transaction [Line Items] | |||
General and administrative | $25 | $58 | $53 |
Contract Drilling Services | |||
Related Party Transaction [Line Items] | |||
Contract drilling services | $70 | $147 | $113 |
Segment_and_Related_Informatio2
Segment and Related Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $494,993 | $505,222 | $478,957 | $514,590 | $484,305 | $489,682 | $464,945 | $454,070 | $1,993,762 | $1,893,002 | $1,541,857 |
Identifiable Assets | 3,253,389 | 3,982,799 | 3,253,389 | 3,982,799 | |||||||
Number of reportable segments | 1 | ||||||||||
Mexico | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 326,352 | 367,732 | 320,436 | ||||||||
Identifiable Assets | 472,032 | 351,123 | 472,032 | 351,123 | |||||||
Brazil | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 488,884 | 312,287 | 284,061 | ||||||||
Identifiable Assets | 1,863,774 | 1,864,358 | 1,863,774 | 1,864,358 | |||||||
United Kingdom | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 193,908 | 245,789 | 141,435 | ||||||||
Identifiable Assets | 90,410 | 196,479 | 90,410 | 196,479 | |||||||
The Netherlands | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 284,651 | 179,768 | 210,577 | ||||||||
Identifiable Assets | 169,088 | 112,561 | 169,088 | 112,561 | |||||||
Qatar | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 94,320 | 139,891 | 74,889 | ||||||||
Identifiable Assets | 96,702 | 130,515 | 96,702 | 130,515 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 85,060 | 117,951 | 105,469 | ||||||||
Identifiable Assets | 94,391 | 712,713 | 94,391 | 712,713 | |||||||
United Arab Emirates | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 139,318 | 108,256 | 79,940 | ||||||||
Identifiable Assets | 228,284 | 152,699 | 228,284 | 152,699 | |||||||
Nigeria | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 0 | 107,750 | 148,961 | ||||||||
Identifiable Assets | 11,308 | 54,539 | 11,308 | 54,539 | |||||||
India | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 79,201 | 103,282 | 58,355 | ||||||||
Identifiable Assets | 135,909 | 200,799 | 135,909 | 200,799 | |||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 302,068 | 210,296 | 117,734 | ||||||||
Identifiable Assets | $91,491 | $207,013 | $91,491 | $207,013 |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information - Effect of Changes in Other Assets and Liabilities on Cash Flows from Operating Activities (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow Elements [Abstract] | |||
Accounts receivable | ($178,108) | ($34,582) | ($116,714) |
Other current assets | 42,922 | 22,181 | -2,941 |
Other assets | -33,637 | 16,451 | 39,484 |
Accounts payable | 25,890 | 8,530 | -12,485 |
Other current liabilities | 14,273 | 18,645 | 4,562 |
Other liabilities | -29,514 | -16,385 | -4,920 |
Net effect of changes in other assets and liabilities | ($158,174) | $14,840 | ($93,014) |
Supplemental_Cash_Flow_Informa3
Supplemental Cash Flow Information - Additional Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash paid during the period for: | |||
Interest, net of amounts capitalized | $21,109 | $5,791 | $3,856 |
U.S. and Non-U.S. income taxes | 85,248 | 76,423 | 63,745 |
Non-cash activities: | |||
Increase (decrease) in accounts payable and accrued liabilities related to capital expenditures | $1,230 | ($12,365) | ($8,463) |
Unaudited_Interim_Financial_Da2
Unaudited Interim Financial Data - Quarterly Financial Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating revenues | $494,993 | $505,222 | $478,957 | $514,590 | $484,305 | $489,682 | $464,945 | $454,070 | $1,993,762 | $1,893,002 | $1,541,857 |
Operating income (loss) | 4,311 | -796,421 | 119,972 | 147,461 | 57,761 | 187,240 | 106,143 | 102,601 | -524,677 | 453,745 | 176,712 |
Net income (loss) attributable to Paragon | -2,803 | 869,160 | -95,045 | -124,566 | -37,555 | -157,635 | -82,544 | -82,572 | 646,746 | -360,305 | -126,237 |
Earnings per share - basic and diluted (usd per share) | $0.03 | ($10.26) | $1.12 | $1.47 | $0.44 | $1.86 | $0.97 | $0.97 | ($7.63) | $4.25 | $1.49 |
Income Tax Expense (Benefit) | 50,600 | 69,394 | 85,605 | 48,688 | |||||||
Previously Reported | |||||||||||
Net income (loss) attributable to Paragon | 894,200 | ||||||||||
Income Tax Expense (Benefit) | 75,700 | ||||||||||
Tax Benefit Related to Impairment of Asset | Adjustment | |||||||||||
Additional non-cash tax benefit per diluted share (in dollars per share) | $0.28 | ||||||||||
Income Tax Expense (Benefit) | ($25,100) |