Northern Offshore reported net income for the three months ended December 31, 2009 of US $17.4 million, or US $0.11 per diluted share, on revenues of US $69.2 million. This compares to net income of US $16.6 million, or US $0.11 per diluted share, for the fourth quarter of 2008, on revenues of US $73.5 million.
Results for the fourth quarter of 2009 include a US $1.1 million charge related to an executive separation agreement. Fourth quarter 2008 results included a US $2.2 million bad debt expense. Excluding these items from the respective periods, fourth quarter 2009 net income would have been US $18.5 million or US $0.12 per diluted share compared to net income of US $18.8 million or US $0.12 per diluted share for the same quarter of the prior year.
Full year 2009 net income increased 17 percent from the prior year. For the year ended December 31, 2009, net income was US $75.1 million or US $0.49 per diluted share. This compares to net income for the year ended December 31, 2008 of US $64.1 million or US $0.42 per diluted share. Excluding the US $1.1 million charge discussed above and a US $3.7 million bad debt expense taken in the first quarter, the company would have reported net income of US$79.9 million or US $0.52 per diluted share for the full year of 2009. This compares to net income of US $69.3 million or US $0.45 per diluted share for 2008, excluding the US $2.2 million bad debt expense discussed above and a US $3.0 million charge associated with a terminated transaction during the third quarter of 2008. Revenues in 2009 were US $279.2 million, slightly higher than the US $276.2 million reported in 2008.
Fourth Quarter Analysis
Revenues for the three months ended December 31, 2009 decreased US $4.3 million compared to the same period of 2008. This decrease was primarily due to lower utilization of the jackups Energy Exerter and Energy Enhancer, which were idle during the 2009 fourth quarter, and lower dayrates for the jackup Energy Endeavour. Partially offsetting this decline were revenue from the drillship Energy Searcher, which had been idle in the fourth quarter of the previous year, earnings from the company's recently announced management contract in the Caspian region, as well as tariff revenue from the floating production facility Northern Producer, which was undergoing shipyard upgrades in 2008.
Drilling and production expenses for the fourth quarter of 2009 were US $6.8 million lower compared to the same period of 2008 due to lower utilization of the jackup fleet in the 2009 quarter. This was partially offset by higher expenses associated with the utilization of the drillship Energy Searcher. Amortization of drilling contract intangibles declined US $2.0 million from the previous year quarter as intangibles were fully amortized in the third quarter of 2009. Interest expense decreased US $2.9 million compared to the prior year quarter due primarily to the reduction in principal balance of the Bank Term Loan and lower interest rates.
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