Northern Offshore has reported net income for the three months ended September 30, 2008 of US $15.5 million, or US $0.10 per diluted share.
Excluding a US $3.0 million after-tax charge associated with the terminated transaction to acquire two North Sea semisubmersible drilling rigs, the Company would have reported net income of US $18.5 million or US $0.12 per diluted share. This compares to a net loss of US $1.8 million, or a loss of US $0.01 per diluted share, for the third quarter of 2007. Revenues for the third quarter of 2008 were US $74.9 million compared to
For the nine months ended September 30, 2008, net income was US $47.5 million or US $0.31 per diluted share. Excluding the US $3.0 million charge discussed above, the Company would have reported net income of US $50.5 million or US $0.33 per diluted share. For the same period in the prior year, net income was US $40.1 million or US $0.27 per share. Revenues for the first nine months of 2008 were US $199.8 million compared to US $132.5 million for the same period in 2007.
Northern Offshore President and CEO, Marion Woolie, commented, "The third quarter started out very strong and ended with extraordinary volatility in the credit and energy markets. I believe our experienced management team is well equipped to navigate through these uncertain times as well as capitalize on opportunities that may arise."
Third Quarter Analysis
Revenues for the three months ended September 30, 2008 increased US $26.7 million to US $74.9 million compared to US $48.2 million for the same period of 2007. The increase in revenue for the third quarter of 2008 included the impact of higher dayrates for the three jackup rigs acquired from A.P. Moller Maersk A/S in mid June 2007 and higher utilization and dayrate for the Energy Driller which commenced a three-year contract with Oil & Natural Gas Corporation Limited on July 11, 2008. This revenue growth was partially offset by lower utilization of the drillship Energy Searcher as the rig completed its contract with P.T. Easco Sepanjang in late June and was idle during the third quarter.
Operating expenses for the third quarter of 2008 were a little lower compared to the same period of 2007 and DD&A was slightly higher primarily due to the impact of upgrades to the Energy Driller for its three-year contract with ONGC. Excluding the US $3 million charge related to the terminated transaction discussed above, general and administrative expenses increased US $3.2 million as compared to the same period of 2007 due primarily to establishment and staffing of offices in Houston and Aberdeen.
Amortization of drilling contract intangibles decreased US $2.8 million in the current quarter when compared to the same period last year as the Energy Exerter and Energy Enhancer completed their contracts with Maersk Olie og Gas AS in April and September, respectfully. Additionally, interest expense decreased US $2.3 million compared to the prior year quarter primarily due to the reduction of the principal balance under the Secured Term Loan Facility and lower interest rates.
The Energy Driller commenced its three-year contract with ONGC on July 11, 2008. The Energy Enhancer "Safety Case" was approved by the U.K. Health and Safety Executive, positioning the company to operate the rig in the U.K. sector of the North Sea. Upon completion of its contract in early September, the Energy Enhancer commenced its first operations under Northern Offshore management, which were in the U.K. North Sea.
As recently announced, the Energy Exerter's backlog has been extended into the second quarter of 2009 with the Aegean Energy S.A. contract, and the Energy Searcher obtained a one-year contract with the Joint Operating Company Vietgazprom starting as early as the second quarter of 2009.
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