At December 31, 2004, the Company's consolidated balance sheet reflected $2.4 billion in shareholders' equity, $191.6 million in cash and marketable debt securities, and $511.6 million in total debt. Net cash provided by operating activities for the year ended December 31, 2004 was $332.2 million.
The Company's premium fleet of offshore drilling rigs expanded to 60 in 2004, with the addition of three 300 foot independent leg cantilever jackups financed with net cash provided by operating activities. One unit is under a long-term contract, while a second unit is scheduled to commence a long-term contract in February 2005. The Company is currently upgrading the third jackup, which will substantially increase its operating capabilities and will cost approximately $30 million. Further, the Company recently announced a commitment for a two-year contract from Shell Exploration & Production Company for the Noble Clyde Boudreaux, an ultra-deepwater semisubmersible hull that once constructed will be capable of drilling in water depths of 10,000 feet. In addition, the Company has three ultra-deepwater hulls in inventory, ready for upgrade.
James C. Day, Chairman and Chief Executive Officer, said, "As markets continue to tighten, the ready availability of premium drilling assets is becoming a concern for the industry as exploration and production plans are being developed for 2006 and 2007."
Net income for the fourth quarter of 2004 increased 73 percent from the third quarter of 2004 as market conditions continued to improve in West Africa and the North Sea. By the middle of the fourth quarter, all six of the Company's jackups in Nigeria were operating. Upgrades to the Noble Homer Ferrington semisubmersible were completed during the fourth quarter and the unit was mobilized to West Africa for a long-term contract for ExxonMobil, which commenced in late November 2004. Both utilization and average dayrates on the Company's North Sea units continued to increase during the fourth quarter. Results for the fourth quarter of 2004 were also positively impacted by the favorable resolution of income tax audits, which resulted in a lower effective tax rate in the fourth quarter of 2004 as compared to the third quarter of 2004. The higher contract drilling costs for the fourth quarter of 2004 were the result of a 13 percent increase in operating days and costs associated with three shipyard projects. The Company's results for the third quarter of 2004 included a $5.8 million, or $.04 per diluted share, after-tax charge related to damage incurred on three of the Company's semisubmersibles in the U.S. Gulf of Mexico as a result of Hurricane Ivan.
Compared to the fourth quarter of 2003, net income for the fourth quarter of 2004 increased 75 percent due principally to higher utilization on international jackups, primarily in West Africa and the Middle East, and the favorable impact from the completion of the income tax audits. These items were partially offset by costs associated with three shipyard projects during the fourth quarter of 2004, lower average dayrates on our deepwater semisubmersibles in the U.S. Gulf of Mexico, and a gain on the sale of certain deepwater exploration properties in the fourth quarter of 2003.
The Company's Middle East operating division, which also includes India and the Mediterranean Sea, experienced an increase of 449 operating days from the fourth quarter of 2003. The increase in operating days was primarily due to the acquisition of the Noble Gene House and Noble Charlie Yester premium jackups in July 2003 and September 2003, respectively, and the mobilization of the Noble Carl Norberg premium jackup to the Mediterranean Sea from the U.S. Gulf of Mexico in December 2003. Following completion of upgrade programs, the Noble Charlie Yester and Noble Gene House commenced contracts in December 2003 and February 2004, respectively. In addition, the Noble Cees van Diemen, acquired in July 2004, commenced an 880-day contract in September 2004. Utilization of our West Africa jackups was also significantly higher in the fourth quarter of 2004 as compared to the same quarter in 2003, increasing to 97 percent in the recent quarter from 30 percent in the fourth quarter of 2003.
In Brazil, the Company's Noble Roger Eason drillship was in the shipyard all of 2004 undergoing planned maintenance and significant upgrades, including water depth increase to 7,200 feet. This upgrade project was recently completed and the unit is expected to commence in February 2005 its 700-day contract for Petrobras at a dayrate of $96,250, plus the opportunity for a performance bonus.
Offshore contract drilling services revenues from deepwater drilling units (capable of drilling in water depths of 4,000 feet or greater) accounted for approximately 29 percent and 38 percent of the Company's total contract drilling services revenues for the fourth quarter of 2004 and 2003, respectively. The Company currently operates six deepwater semisubmersibles in the Gulf of Mexico, one deepwater semisubmersible and three deepwater drillships offshore Brazil, and another deepwater semisubmersible in Nigeria. Contract drilling services revenues from international sources accounted for approximately 77 percent and 72 percent of the Company's total contract drilling services revenues for the fourth quarter of 2004 and 2003, respectively.
The average dayrate for the Company's international jackup rigs was $50,984 in the fourth quarter of 2004 compared to $50,379 in the fourth quarter of 2003. Utilization on these rigs improved to 97 percent in the recent quarter as compared to 74 percent in the fourth quarter of 2003. The average dayrate on the Company's deepwater assets in the U.S. Gulf of Mexico capable of drilling in water depths of 6,000 feet or greater decreased 10 percent to $98,767 in the fourth quarter of 2004 as compared to the fourth quarter of 2003. However, this market has continued to strengthen, and recent contracts on the Company's domestic deepwater semisubmersibles have generally been higher than the average for the fourth quarter of 2004. Utilization on these units was 91 percent during the fourth quarter of 2004 and 95 percent in the same quarter of the previous year. The average dayrate on the Company's domestic jackups increased 28 percent to $50,049 in the fourth quarter 2004 as compared to the fourth quarter of 2003. These units were fully utilized in the recent quarter as compared to utilization of 98 percent in the fourth quarter of 2003.
Day said, "We will continue to market our three semisubmersible hulls for ultra-deep projects starting in 2007 and 2008, as well as search for premium drilling assets to acquire. The Company has increased its fleet by 22 percent over the last three years."
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