Exhibit 99.1
INDEX TO THE DRILLING COMPANY OF 1972 A/S FINANCIAL STATEMENTS
1
THE DRILLING COMPANY OF 1972 A/S
CONSOLIDATED INCOME STATEMENTS
For the 9 months ended September 30, | ||||||||||||
Notes | 2022 | 2021 | ||||||||||
USD million | ||||||||||||
Revenue | 1.1, 1.2 | 816 | 946 | |||||||||
Cost of sales (exclusive of depreciation and amortisation shown separately below) | (657 | ) | (669 | ) | ||||||||
Special items | 1.3 | (19 | ) | (14 | ) | |||||||
Depreciation and amortisation | (142 | ) | (167 | ) | ||||||||
Impairment reversals (losses), net | 1.4 | (117 | ) | 11 | ||||||||
Gain/(loss) on sale of non-current assets | 1.5 | — | 18 | |||||||||
Share of results in joint ventures | (1 | ) | (1 | ) | ||||||||
|
|
|
| |||||||||
Profit/loss before financial items | (120 | ) | 124 | |||||||||
Financial expenses | (52 | ) | (55 | ) | ||||||||
Financial income | 8 | 9 | ||||||||||
|
|
|
| |||||||||
Profit/loss before tax | (164 | ) | 78 | |||||||||
Tax | (22 | ) | (18 | ) | ||||||||
|
|
|
| |||||||||
Profit/loss for the period | (186 | ) | 60 | |||||||||
|
|
|
| |||||||||
Earnings in USD per share of DKK 10 for the period | 1.6 | (4.5 | ) | 1.5 | ||||||||
Diluted earnings in USD per share of DKK 10 for the period | 1.6 | (4.5 | ) | 1.4 |
The accompanying notes are an integral part of these consolidated financial statements
2
THE DRILLING COMPANY OF 1972 A/S
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the 9 months ended September 30, | ||||||||
2022 | 2021 | |||||||
USD million | ||||||||
Profit/loss for the period | (186 | ) | 60 | |||||
Cash flow hedges: | ||||||||
Value adjustment of hedges | 1 | (5 | ) | |||||
Reclassified to income statement | 16 | 8 | ||||||
|
|
|
| |||||
Total items that have or will be reclassified to the income statement | 17 | 3 | ||||||
|
|
|
| |||||
Other comprehensive income, net of tax | 17 | 3 | ||||||
|
|
|
| |||||
Total comprehensive income for the period | (169 | ) | 63 | |||||
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements
3
THE DRILLING COMPANY OF 1972 A/S
CONSOLIDATED CASH FLOW STATEMENTS
For the 9 months ended September 30, | ||||||||
2022 | 2021 | |||||||
USD million | ||||||||
Profit/loss before financial items | (120 | ) | 124 | |||||
Depreciation, amortisation and impairment reversals (losses), net | 259 | 156 | ||||||
Gain/loss on sale of non-current assets | — | (18 | ) | |||||
Change in working capital | (56 | ) | (43 | ) | ||||
Change in provisions | (1 | ) | (11 | ) | ||||
Other non-cash items | 4 | 4 | ||||||
Taxes paid | (35 | ) | (23 | ) | ||||
|
|
|
| |||||
Cash flow from operating activities | 51 | 189 | ||||||
|
|
|
| |||||
Purchase of intangible assets and property, plant and equipment | (105 | ) | (61 | ) | ||||
Sale of property, plant and equipment | 42 | 32 | ||||||
Other financial investments | — | (1 | ) | |||||
|
|
|
| |||||
Cash flow used for investing activities | (63 | ) | (30 | ) | ||||
|
|
|
| |||||
Interest received | 1 | — | ||||||
Interest paid | (30 | ) | (41 | ) | ||||
Repayment of borrowings | (329 | ) | (115 | ) | ||||
|
|
|
| |||||
Cash flow used for financing activities | (358 | ) | (156 | ) | ||||
|
|
|
| |||||
Net cash flow for the period | (370 | ) | 3 | |||||
|
|
|
| |||||
Cash and bank balances 1 January | 557 | 226 | ||||||
Currency translation effect on cash and bank balances | (6 | ) | (2 | ) | ||||
|
|
|
| |||||
Cash and bank balances, end of period | 181 | 227 | ||||||
|
|
|
|
Cash and bank balances at September 30, 2022 include USD 20 million (September 30, 2021: USD 23 million) that relates to cash and bank balances in countries with exchange control or other restrictions. These funds are not readily available for general use by Maersk Drilling.
The accompanying notes are an integral part of these consolidated financial statements
4
THE DRILLING COMPANY OF 1972 A/S
September 30, | ||||||||||||
Note | 2022 | 2021 | ||||||||||
USD million | ||||||||||||
Assets | ||||||||||||
Intangible assets | 19 | 12 | ||||||||||
Property, plant and equipment | 2,615 | 2,812 | ||||||||||
Right-of-use assets | 19 | 25 | ||||||||||
Financial non-current assets | 13 | 5 | ||||||||||
Deferred tax | 18 | 18 | ||||||||||
|
|
|
| |||||||||
Total non-current assets | 2,684 | 2,872 | ||||||||||
|
|
|
| |||||||||
Trade receivables | 232 | 260 | ||||||||||
Tax receivables | 4 | 21 | ||||||||||
Other receivables | 60 | 58 | ||||||||||
Prepayments | 54 | 59 | ||||||||||
|
|
|
| |||||||||
Receivables, etc. | 350 | 398 | ||||||||||
|
|
|
| |||||||||
Cash and bank balances | 181 | 227 | ||||||||||
Assets held for sale | 1.5 | — | 139 | |||||||||
|
|
|
| |||||||||
Total current assets | 531 | 764 | ||||||||||
|
|
|
| |||||||||
Total assets | 3,215 | 3,636 | ||||||||||
|
|
|
| |||||||||
Equity and liabilities | ||||||||||||
Share capital | 63 | 63 | ||||||||||
Reserves and retained earnings | 2,092 | 2,020 | ||||||||||
|
|
|
| |||||||||
Total equity | 2,155 | 2,083 | ||||||||||
|
|
|
| |||||||||
Borrowings, non-current1 | 600 | 1,039 | ||||||||||
Provisions | 9 | 5 | ||||||||||
Deferred tax | 29 | 15 | ||||||||||
Derivatives | — | 22 | ||||||||||
|
|
|
| |||||||||
Other non-current liabilities | 38 | 42 | ||||||||||
|
|
|
| |||||||||
Total non-current liabilities | 638 | 1,081 | ||||||||||
|
|
|
| |||||||||
Borrowings, current | 135 | 136 | ||||||||||
Provisions | 2 | 4 | ||||||||||
Trade payables | 134 | 172 | ||||||||||
Tax payables | 63 | 68 | ||||||||||
Other payables | 61 | 54 | ||||||||||
Deferred income | 27 | 38 | ||||||||||
|
|
|
| |||||||||
Other current liabilities | 287 | 336 | ||||||||||
|
|
|
| |||||||||
Total current liabilities | 422 | 472 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 1,060 | 1,553 | ||||||||||
|
|
|
| |||||||||
Total equity and liabilities | 3,215 | 3,636 | ||||||||||
|
|
|
|
1 | Maersk Drilling made a voluntary loan repayment of USD 226 million in March 2022. |
The accompanying notes are an integral part of these consolidated financial statements
5
THE DRILLING COMPANY OF 1972 A/S
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital | Hedge Reserve | Retained Earnings | Total Equity | |||||||||||||
USD million | ||||||||||||||||
Equity January 1, 2022 | 63 | (22 | ) | 2,279 | 2,320 | |||||||||||
Other comprehensive income, net of tax | — | 17 | — | 17 | ||||||||||||
Loss for the period | — | — | (186 | ) | (186 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income for the period | — | 17 | (186 | ) | (169 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Value of share-based payments | — | — | 4 | 4 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total transactions with shareholders | — | — | 4 | 4 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Equity September 30, 2022 | 63 | (5 | ) | 2,097 | 2,155 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Equity January 1, 2021 | 63 | (30 | ) | 1,984 | 2,017 | |||||||||||
Other comprehensive income, net of tax | — | 3 | — | 3 | ||||||||||||
Profit for the period | — | — | 60 | 60 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income for the period | — | 3 | 60 | 63 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Value of share-based payments | — | — | 3 | 3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total transactions with shareholders | — | — | 3 | 3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Equity September 30, 2021 | 63 | (27 | ) | 2,047 | 2,083 | |||||||||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements
6
For the 9 months ended September 30, | ||||||||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||||||||
North Sea | International | Unallocated Activities | Total | North Sea | International | Unallocated Activities | Total | |||||||||||||||||||||||||
USD million | ||||||||||||||||||||||||||||||||
Revenue | 338 | 451 | 27 | 816 | 496 | 429 | 21 | 946 | ||||||||||||||||||||||||
EBITDA before special items | 84 | 66 | — | — | 200 | 68 | — | — | ||||||||||||||||||||||||
Depreciation and amortisation | (67 | ) | (62 | ) | (13 | ) | (142 | ) | (96 | ) | (63 | ) | (8 | ) | (167 | ) | ||||||||||||||||
Impairment reversals (losses), net | — | (99 | ) | (18 | ) | (117 | ) | 11 | — | — | 11 | |||||||||||||||||||||
Investments in non-current assets | 37 | 53 | 12 | 102 | 22 | 28 | 10 | 60 | ||||||||||||||||||||||||
Non-current assets(1) | 1,578 | 1,030 | 26 | 2,634 | 1,615 | 1,126 | 83 | 2,824 |
(1) | Comprises intangible assets and property, plant and equipment. |
The allocation of business activities into segments is in line with the internal management reporting provided to the chief operating decision maker which is Executive Management. Management has organised its business around the North Sea segment which utilises Jack-up rigs and an International segment which utilises semi-submersible rigs and drillships. The organisation is based on differences in the requirements of the drilling equipment due to geographical conditions and regulatory considerations. In general, rigs will be deployed in the operating areas for which they are designed, we therefore typically refer to them as “two different operating segments”. Jack-up rigs and floaters typically form separate segments as they are used for drilling programmes at different water depths. No operating segments have been aggregated.
EBITDA before special items reconciles to the consolidated income statements as follows:
For the 9 months ended September 30, | ||||||||
2022 | 2021 | |||||||
USD million | ||||||||
Profit/Loss for the period | (186 | ) | 60 | |||||
Adjustments: | ||||||||
Tax expenses | 22 | 18 | ||||||
Financial expenses | 52 | 55 | ||||||
Financial income | (8 | ) | (9 | ) | ||||
Share of results in joint ventures | 1 | 1 | ||||||
Gain (loss) on sale of non-current assets | — | (18 | ) | |||||
Impairment reversals (losses), net | 117 | (11 | ) | |||||
Depreciation and amortisation | 142 | 167 | ||||||
Special items | 19 | 14 | ||||||
EBITDA from unallocated activities | (9 | ) | (9 | ) | ||||
|
|
|
| |||||
EBITDA before special items and unallocated activities | 150 | 268 | ||||||
|
|
|
|
7
1.2 Revenue
Revenue from drilling activities typically comprise fixed amounts for each day the rig is under contract differentiated by the activities undertaken (“day rate revenue”) and other revenue components such as lump sum payments for rig mobilisation and demobilisation and payments for investments in equipment or rig upgrades required to meet the operational needs of the drilling campaign, both of which are amortised over the contract period; bonuses linked to performance in terms of time, efficiency or drilling outcome measures such as reservoir targeting; or payments for third-party services to be delivered by Maersk Drilling.
For revenue, geographical information is based on geographical location where earned. The geographical split and types of revenue are as follows:
For the 9 months ended September 30, 2022 | ||||||||||||||||
North Sea | International | Other | Total | |||||||||||||
USD million | ||||||||||||||||
Geographical split | ||||||||||||||||
Denmark | 26 | — | 2 | 28 | ||||||||||||
Norway | 228 | — | 1 | 229 | ||||||||||||
The Netherlands | 33 | — | — | 33 | ||||||||||||
United Kingdom | 51 | — | — | 51 | ||||||||||||
Angola | — | 1 | — | — | ||||||||||||
Australia | — | 93 | — | 93 | ||||||||||||
Brazil | — | 41 | — | 41 | ||||||||||||
Ghana | — | 76 | — | 76 | ||||||||||||
Guyana | — | 12 | — | 12 | ||||||||||||
Malaysia | — | 55 | — | 55 | ||||||||||||
Namibia | — | 13 | — | 13 | ||||||||||||
Sao Tome | — | 34 | — | 34 | ||||||||||||
Suriname | — | 82 | — | 82 | ||||||||||||
Trinidad | — | 41 | — | 41 | ||||||||||||
Brunei | — | — | 24 | 24 | ||||||||||||
Other | — | 3 | — | 3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 338 | 451 | 27 | 816 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Composition of revenue | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Day rate revenue | 279 | 362 | 20 | 661 | ||||||||||||
Other revenue | 59 | 89 | 7 | 155 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 338 | 451 | 27 | 816 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Type of revenue | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||
Services component | 211 | 338 | 19 | 568 | ||||||||||||
Lease component | 127 | 113 | 8 | 248 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 338 | 451 | 27 | 816 | ||||||||||||
|
|
|
|
|
|
|
|
8
For the 9 months ended September 30, 2021 | ||||||||||||||||
North Sea | International | Other | Total | |||||||||||||
USD million | ||||||||||||||||
Geographical split | ||||||||||||||||
Denmark | 7 | — | 2 | 9 | ||||||||||||
Norway | 372 | — | — | 372 | ||||||||||||
The Netherlands | 20 | — | — | 20 | ||||||||||||
United Kingdom | 97 | — | — | 97 | ||||||||||||
Angola | — | 67 | — | 67 | ||||||||||||
Australia | — | 75 | — | 75 | ||||||||||||
Azerbaijan | — | 37 | — | 37 | ||||||||||||
Brazil | — | — | — | — | ||||||||||||
Ghana | — | 44 | — | 44 | ||||||||||||
Guyana | — | 16 | — | 16 | ||||||||||||
Suriname | — | 97 | — | 97 | ||||||||||||
Trinidad | — | 49 | — | 49 | ||||||||||||
Brunei | — | 19 | 19 | 38 | ||||||||||||
Other | — | 25 | — | 25 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 496 | 429 | 21 | 946 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Composition of revenue | ||||||||||||||||
Day rate revenue | 399 | 339 | 19 | 757 | ||||||||||||
Other revenue | 97 | 90 | 2 | 189 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 496 | 429 | 21 | 946 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Type of revenue | ||||||||||||||||
Services component | 260 | 296 | 15 | 571 | ||||||||||||
Lease component | 236 | 133 | 6 | 375 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 496 | 429 | 21 | 946 | ||||||||||||
|
|
|
|
|
|
|
|
At September 30, 2022, the revenue backlog of contracted future service and lease revenue amounted to USD 2.2 billion (December 31, 2021: USD 1.9 billion).
1.3 Special items
For the 9 months ended September 30, | ||||||||
2022 | 2021 | |||||||
USD million | ||||||||
Merger related costs | 16 | — | ||||||
Transformation and restructuring costs | — | 1 | ||||||
COVID-19 costs not recharged to customers | 3 | 13 | ||||||
|
|
|
| |||||
Special items, costs | 19 | 14 | ||||||
|
|
|
|
Special items comprise income and expenses that are not considered to be part of Maersk Drilling’s ordinary operations such as merger related costs, major restructuring projects and COVID-19 related costs. COVID-19 related costs are defined as additional costs triggered by the COVID-19 pandemic in the form of costs incurred to comply with local travel and quarantine rules and customer requirements, additional costs incurred with procuring testing kits for crews operating rigs, additional crew change costs for quarantine hotels, charter flights, per diems as well as additional costs to reimburse subcontractors in instances where they need to comply with quarantine regulations.
9
Special items incurred in the first nine months of 2022 comprised USD 16 million merger related costs and USD 3 million of COVID-19 related costs not recharged to customers. Special items incurred in the first nine months of 2021 comprised redundancy costs from the establishment of virtual rig teams and a new technical hub in Gdansk of USD 1 million and net COVID-19 related costs of USD 13 million.
1.4 Impairment test
2022
Maersk Explorer was cold stacked in May 2022 due to lack of commercial outlook and therefore it was impaired to estimated scrapping value. This resulted in an impairment loss of USD 99 million.
Apart from the USD 99 million impairment loss on Maersk Explorer and the USD 18 million impairment loss in connection with the sale of Maersk Convincer, no impairment triggers have been identified that would lead to an impairment test. Therefore, no further impairments were recognised in the first nine months ended September 30, 2022.
2021
In connection with the sale of Mærsk Gallant in May 2021, an impairment loss of USD 11 million has been reversed.
In connection with the valuation of the Company in a contemplated business combination, Maersk Drilling’s net assets were assessed by the accounting acquirer as part of this transaction at values below their carrying amounts as at September 30, 2021 and Management concluded that an impairment test needed to be performed.
An impairment test based on a value in use calculation was therefore performed, and the conclusion was that the impairment test did not lead to impairment or reversal of previously recognised impairments.
1.5 Sale of non-current assets
For the 9 months ended September 30, | ||||||||
2022 | 2021 | |||||||
USD million | ||||||||
Gains | — | 17 | ||||||
|
|
|
| |||||
Gains/losses on sale of non-current assets, net | — | 17 | ||||||
|
|
|
| |||||
Carrying amount of non-current assets | 42 | 15 | ||||||
Gain/loss on sale of non-current asset | — | 17 | ||||||
Cash advance from sale of non-current assets | — | — | ||||||
Change in payables from the sale | — | 1 | ||||||
|
|
|
| |||||
Cash flow from sale of non-current assets | 42 | 33 | ||||||
|
|
|
| |||||
Carrying amount of assets held for sale | — | 139 | ||||||
|
|
|
|
In April 2022, Maersk Drilling announced that it entered into an agreement to sell the jack-up rig Maersk Convincer to ADES Saudi Limited Company. The sales price was USD 42.5 million in an all cash transaction. Closing date was September 2022 after the completion of its current drilling programme with Brunei Shell Petroleum Company Sdn. Bhd. An impairment loss of USD 18 million was recognised after the sales agreement was announced and the rig was subsequently classified as asset held for sale.
During the second quarter of 2021, Maersk Drilling completed the divestment of the jack-up rigs Maersk Guardian (now named Guardian) and Mærsk Gallant (now named Gallant) to New Fortress Energy. The total sales price for the two rigs was USD 31 million in all-cash transactions. Additionally, USD 2 million were collected from the sale of spare parts owned by Mærsk Gallant.
In May 2021, Maersk Drilling further announced that it entered into an agreement to divest the combined drilling and production unit Mærsk Inspirer to Havila Sirius for a price of USD 373 million in an all-cash transaction. In connection with the sale announcement, Mærsk Inspirer was classified as held for sale and depreciation of the asset was ceased. The sale was completed in 2021.
10
1.6 Share capital and earnings per share
The share capital comprises 41,532,112 shares of DKK 10 each. At September 30, 2022, the Company holds 140,451 treasury shares (September 30, 2021: 241,397) and the average number of shares in circulation during the first half of 2022 was 41,341,188 (September 30, 2021: 41,289,832).
Earnings per share amounted to USD -4.5 (USD 1.5) and diluted earnings per share USD -4.5 (USD 1.4).
Earnings per share is equal to profit/loss for the period divided by the average number of shares in circulation or the average diluted number of shares in circulation.
At September 30, 2022 a potential dilution effect from 296,080 shares (September 30, 2021: 293,027 shares) outstanding under the long-term incentive programme are excluded in the calculation of diluted earnings per share as the inclusion would have resulted in a reduction in the loss per share, while in 2021 it was included.
1.7 Capital commitments
At September 30, 2022, capital commitments relating to rig upgrades and special periodic surveys amounted to USD 38 million (December 31, 2021: USD 38 million). Maersk Drilling does not have capital commitments related to new buildings.
1.8 Subsequent events
Noble and Maersk Drilling entered into a business combination agreement (the “Business Combination Agreement), which was announced on November 10, 2021, on August 8, 2022 and Noble published an offer document setting out the full terms and conditions to the voluntary public share exchange offer to be made to the shareholders of Maersk Drilling. The offer period commenced on August 10, 2022 and expired on September 8, 2022.
On October 3, 2022 (the “Closing Date”), pursuant to the Business Combination Agreement, Noble completed a voluntary tender exchange offer to Maersk Drilling’s shareholders and because Noble acquired more than 90% of the issued and outstanding shares of Maersk Drilling Noble redeemed all remaining Maersk Drilling shares not exchanged in the offer for, at the election of the holder, either ordinary shares of Noble or cash (or, for those holders that did not make an election, only cash), under Danish law by way of a compulsory purchase (the “Compulsory Purchase”), which was completed in early November 2022. Upon completion of the Compulsory Purchase, Maersk Drilling became a wholly owned subsidiary of Noble and Noble delisted Maersk Drilling from Nasdaq Copenhagen.
No other events have occurred after the balance sheet date which are expected to have a material impact on the consolidated financial statements.
1.9 Basis of preparation
These interim consolidated financial statements reflect the consolidated figures for The Drilling Company of 1972 A/S (the “Company”) and its subsidiaries (the “Group” or “Maersk Drilling”). All amounts in these interim consolidated financial statements are stated in United States Dollars (USD) and rounded to the nearest million.
11
Accounting policies
The accounting policies, areas of judgement and areas of significant estimates are consistent with those set out in the notes to Maersk Drilling’s consolidated financial statements for 2021.
New reporting requirements
New standards and amendments effective for the financial years 2022 and 2021 have not had any material impact on the accounting policies applied.
New standards, amendments and interpretations adopted in 2022 include:
• | IAS 16, Property, Plant and Equipment—Proceeds before intended use. The amendment prohibits deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
• | IAS 37, Onerous Contracts: The amendment clarifies which costs to include when determining whether a contract in onerous |
• | IFRS 3, Business Combinations: The amendment includes updates to references to follow the new Conceptual Framework. |
• | Annual Improvements to IFRS Standards 2018–2020: These improvements relate to clarifications and reliefs within IFRS 1, IFRS 9, IFRS 16 and IAS 41. |
New standards, amendments and interpretations adopted in 2021 include:
• | IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: IBOR reform, phase 2. A number of amendments which provide relief from modification accounting arising from changes in contractual cash flows on debt instruments and lease contracts and redesignation of designated hedge relationships as a consequence of the IBOR reform. |
12