Northern Offshore, Ltd. reported a net income for three months ending on March 31, 2008 as being US$9.5 million, or US$0.06 per diluted share, compared to net income of US$25.3 million, or US$0.18 per diluted share for the first quarter of 2007. Revenues for the first quarter of 2008 were US$49.4 million compared to US$41.9 million for the first quarter of 2007.
Northern Offshore President and CEO, Marion Woolie, commented, "Offshore drilling markets remained strong throughout the first quarter. As we continue to fill our company with talented people, and build our revenue backlog, I believe we will add significant value for our shareholders."
Revenues for the three months ended March 31, 2008 increased US$7.5 million compared to the same period of 2007. Revenue in the 2008 quarter included US$35.5 million from the three jackup rigs the company acquired in June 2007. Offsetting this growth was lower revenue on the Energy Driller, a semisubmersible that was being upgraded for a three-year contract, and lower revenue from the Northern Producer, a floating production platform which came off contract in June 2007. The Northern Producer is currently undergoing preparation for a new life-of-field contract in the U.K. North Sea.
Operating, general and administrative and DD&A expenses all showed significant year-over-year increases as a result of the three jackup rigs acquired during 2007. Similarly, the amortization of drilling contract intangibles increased US$9.9 million and interest expense was up US$6.4 million due to the 2007 rig acquisitions.
Several key milestones were achieved since the beginning of the year, these include the floating production platform, Northern Producer, which was delivered to the client on March 1, 2008 and the company earned an early delivery bonus of US$4.0 million. This revenue will be amortized from the actual delivery date until September 7, 2008, the contractual delivery date. The Energy Driller which underwent an upgrade to 1000 ft water depth capability in preparation for a three-year contract with ONGC in India. The rig has been accepted by ONGC and is expected to commence drilling in early June, 2008.The Energy Exerter which completed its contract with Maersk Oil and Gas on April 11, 2008 and is now under contract to a subsidiary of Gazprom and preparing for its drilling program offshore northern Russia. In addition, the Energy Exerter safety case was approved by the U.K. Health and Safety Executive on May 21, 2008. This approval will position the company to operate the rig in the U.K. sector of the North Sea.Finally, a regional shorebased operations headquarters was established in Aberdeen, Scotland and will be responsible for managing all operations in the North Sea and Russia.
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