Exhibit 99.1
FOR IMMEDIATE RELEASE | CONTACT: Les Van Dyke | |
Director, Investor Relations | ||
(281) 492-5370 |
DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
FIRST QUARTER 2006 RESULTS
FIRST QUARTER 2006 RESULTS
Houston, Texas, April 26, 2006 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the first quarter of 2006 of $145.3 million, or $1.06 per share on a diluted basis, compared with net income of $30.1 million, or $0.23 per share on a diluted basis, in the same period a year earlier. Revenues for the first quarter of 2006 were $447.7 million, compared with revenues of $258.8 million for the first quarter of 2005.
The improvement in operating results reflects record-high average dayrates and rig utilization for the Company’s entire fleet. For the first quarter of 2006, fleet-wide marketed utilization of our rigs averaged approximately 97%, compared to approximately 91% during the first quarter of 2005. Currently, approximately 88% of our fleet is contracted or committed in 2006 and about 56% of our fleet is contracted or committed in 2007. Additionally, we are continuing to build backlog into 2008, 2009 and 2010, with a total of approximately 68 rig years contracted or committed. This backlog is expected to result in maximum total revenue of approximately $5 billion over the life of those contracts, and compares with about $1 billion in backlog revenue at this time a year ago.
Larry Dickerson, President and Chief Operating Officer, noted, “The entire market remains robust, and virtually all of the fundamental market conditions that defined 2005 appear to remain in place for 2006. We are confident in our market position and our ability to participate in future market improvements.”
Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. Commitments represent Letters of Intent that are subject to customary conditions, including the execution of a definitive agreement. Maximum contract revenue stated above assumes 100% rig utilization. Generally, rig utilization rates approach 95-98% during contracted periods; however, utilization rates can be adversely impacted by additional downtime due to unscheduled repairs, maintenance and weather.
As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its first quarter 2006 earnings release conference call. The live broadcast of our quarterly conference call will be available online atwww.diamondoffshore.com on April 26, 2006, beginning at 9:00 a.m. Central Daylight Savings Time. The online replay will follow immediately and continue for the remainder of the first calendar quarter after the original call. Please go to the web site at least 15 minutes before the broadcast to register, download and install any necessary audio software.
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Statements in this press release contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, but are not limited to, statements concerning existing contracts, commitments and backlog, fleet enhancements, access to new markets, future earnings, future cash flows, market conditions, future market improvements, future growth in demand for equipment types or in any region and future contracts. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated or projected, including, among others, the risk that full rig utilization may not be achieved during a contract period, the risk that factors outside of the Company’s control may adversely impact the amount of profit realized from a contract, the risk that the markets for the Company’s services will not continue to improve, the risk that the Company’s market position may deteriorate, or the risk that the Company may not be able to participate fully in any future market improvements. A discussion of additional risk factors that could impact these areas and the Company’s overall business and financial performance can be found in the Company’s reports and other filings with the Securities and Exchange Commission. These factors include, among others, general economic and business conditions, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company’s control. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended | ||||||||
March 31, | ||||||||
2006 | 2005 | |||||||
Revenues: | ||||||||
Contract drilling | $ | 434,653 | $ | 250,022 | ||||
Revenues related to reimbursable expenses | 13,077 | 8,736 | ||||||
Total revenues | 447,730 | 258,758 | ||||||
Operating expenses: | ||||||||
Contract drilling | 174,206 | 148,214 | ||||||
Reimbursable expenses | 11,291 | 7,335 | ||||||
Depreciation | 49,582 | 45,472 | ||||||
General and administrative | 9,941 | 9,473 | ||||||
(Gain) loss on sale of assets | (233 | ) | 258 | |||||
Total operating expenses | 244,787 | 210,752 | ||||||
Operating income | 202,943 | 48,006 | ||||||
Other income (expense): | ||||||||
Interest income | 8,375 | 5,768 | ||||||
Interest expense | (6,806 | ) | (9,567 | ) | ||||
Loss on sale of marketable securities | (194 | ) | (1,274 | ) | ||||
Other, net | 2,373 | 425 | ||||||
Income before income tax expense | 206,691 | 43,358 | ||||||
Income tax expense | (61,370 | ) | (13,240 | ) | ||||
Net income | $ | 145,321 | $ | 30,118 | ||||
Earnings per share: | ||||||||
Basic | $ | 1.13 | $ | 0.23 | ||||
Diluted | $ | 1.06 | $ | 0.23 | ||||
Weighted average shares outstanding: | ||||||||
Common shares | 129,026 | 128,573 | ||||||
Dilutive potential common shares | 9,725 | 9,557 | ||||||
Total weighted average shares outstanding | 138,751 | 138,130 | ||||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
Three Months Ended | ||||||||
March 31, | ||||||||
2006 | 2005 | |||||||
REVENUES | ||||||||
High Specification Floaters | $ | 164,913 | $ | 94,111 | ||||
Intermediate Semisubmersibles | 174,065 | 94,981 | ||||||
Jack-ups | 95,675 | 60,704 | ||||||
Other | — | 226 | ||||||
Total Contract Drilling Revenue | $ | 434,653 | $ | 250,022 | ||||
Revenues Related to Reimbursable Expenses | $ | 13,077 | $ | 8,736 | ||||
CONTRACT DRILLING EXPENSE | ||||||||
High Specification Floaters | $ | 54,093 | $ | 44,034 | ||||
Intermediate Semisubmersibles | 86,606 | 75,093 | ||||||
Jack-ups | 32,208 | 27,906 | ||||||
Other | 1,299 | 1,181 | ||||||
Total Contract Drilling Expense | $ | 174,206 | $ | 148,214 | ||||
Reimbursable Expenses | $ | 11,291 | $ | 7,335 | ||||
OPERATING INCOME | ||||||||
High Specification Floaters | $ | 110,820 | $ | 50,077 | ||||
Intermediate Semisubmersibles | 87,459 | 19,888 | ||||||
Jack-ups | 63,467 | 32,798 | ||||||
Other | (1,299 | ) | (955 | ) | ||||
Reimbursables, net | 1,786 | 1,401 | ||||||
Depreciation Expense | (49,582 | ) | (45,472 | ) | ||||
General and Administrative Expense | (9,941 | ) | (9,473 | ) | ||||
Gain (loss) on Sale of Assets | 233 | (258 | ) | |||||
Total Operating Income | $ | 202,943 | $ | 48,006 | ||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, | December 31, | |||||||
2006 | 2005 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 256,950 | $ | 842,590 | ||||
Marketable securities | 351,421 | 2,281 | ||||||
Accounts receivable | 437,337 | 357,104 | ||||||
Rig inventory and supplies | 47,601 | 47,196 | ||||||
Prepaid expenses and other | 34,198 | 32,707 | ||||||
Total current assets | 1,127,507 | 1,281,878 | ||||||
Drilling and other property and equipment, net of accumulated depreciation | 2,405,161 | 2,302,020 | ||||||
Other assets | 22,604 | 23,024 | ||||||
Total assets | $ | 3,555,272 | $ | 3,606,922 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | $ | 269,659 | $ | 268,986 | ||||
Long-term debt | 969,309 | 977,654 | ||||||
Deferred tax liability | 450,064 | 445,094 | ||||||
Other liabilities | 67,149 | 61,861 | ||||||
Stockholders’ equity | 1,799,091 | 1,853,327 | ||||||
Total liabilities and stockholders’ equity | $ | 3,555,272 | $ | 3,606,922 | ||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
AVERAGE DAYRATES AND UTILIZATION
First Quarter | Fourth Quarter | First Quarter | ||||||||||||||||||||||
2006 | 2005 | 2005 | ||||||||||||||||||||||
Dayrate | Utilization | Dayrate | Utilization | Dayrate | Utilization | |||||||||||||||||||
(Dayrate in thousands) | ||||||||||||||||||||||||
High Specification Floaters | $ | 189 | 96 | % | $ | 181 | 86 | % | $ | 109 | 96 | % | ||||||||||||
Intermediate Semisubmersibles | $ | 104 | 98 | % | $ | 81 | 89 | % | $ | 65 | 83 | % | ||||||||||||
Jack-ups | $ | 85 | 96 | % | $ | 69 | 95 | % | $ | 48 | 96 | % |
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