Noble Corporation reported first quarter 2015 net income from continuing operations attributable to Noble Corporation of $178 million, or $0.72 per diluted share.
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The results compared to a loss from continuing operations in the fourth quarter of 2014 of $595 million, or $2.38 per diluted share. Fourth quarter 2014 results included an after-tax charge of $713 million, or $2.86 per diluted share, related to the impairment of three rigs and the company's total goodwill balance.
Excluding the fourth quarter impairment charge, net income from continuing operations would have been $119 million, or $0.47 per diluted share. For the first quarter of 2014, net income from continuing operations was $155 million, or $0.60 per diluted share. Revenues for the first quarter of 2015 totaled $804 million compared to $805 million in the fourth quarter of 2014 and $795 million in the first quarter of 2014.
Contract drilling services revenues in the first quarter of 2015 totaled $779 million compared to revenues of $788 million in the fourth quarter of 2014. The modest decline was due primarily to a decrease in fleet operating days following the company's decision in the fourth quarter to retire three semisubmersibles, the Noble Paul Wolff, Noble Jim Thompson and Noble Driller. The Noble Jim Thompson and Noble Driller remained active into early 2015.
The decline in revenues related to rig retirements was partially offset by an improvement in revenue efficiency, as fleet downtime fell to under 4 percent in the first quarter compared to 7 percent in the fourth quarter. Fleet utilization improved to 86 percent in the first quarter, up from 82 percent in the fourth quarter, due primarily to the three rig retirements, while average daily revenues in the first quarter increased to $340,000 compared to $330,700 in the fourth quarter.
Contract drilling services operating costs declined $69 million, or 18 percent, in the first quarter to $322 million compared to $391 million in the fourth quarter. The favorable variance was due largely to lower repair and maintenance expenses, lower labor and other rig operating expenses coupled with the retirement of the three semisubmersibles.
The meaningful reduction in contract drilling operating costs resulted in an improvement in the contract drilling services margin in the first quarter of 2015, which rose to 59 percent compared to 50 percent in the fourth quarter of 2014.
Net cash from operating activities totaled $369 million in the first quarter of 2015 compared to $390 million in the fourth quarter of 2014. Capital expenditures in the first quarter were $89 million and are expected to decline to approximately $585 million in 2015 when compared to an average of approximately $2.1 billion per year for the last three years.
The expected decline this year in capital expenditures reflects lower expenditures associated with newbuild projects. The company's remaining newbuild project, the ultra-high-specification jackup Noble Lloyd Noble, is expected to be delivered from the shipyard during the second quarter of 2016 and will contribute approximately $450 million to our 2016 estimated capital expenditures.
The company reported total debt at March 31, 2015 of $4.9 billion, unchanged from the level at December 31, 2014. Debt to total capital was 40 percent, also unchanged over the same period. During the first quarter, Noble issued $1.1 billion of senior notes consisting of tranches of three-, 10- and 30-year maturities, with a weighted average coupon of 5.9 percent.
Net proceeds from the offering were used to repay amounts outstanding under the company's credit facilities and commercial paper program. Liquidity, defined as cash and cash equivalents and availability under revolving credit facilities, was $2.7 billion at the end of the quarter, up from $1.8 billion at December 31, 2014.
As previously reported, the company repurchased $100 million worth of its ordinary shares in January 2015 under an authorization granted by Noble shareholders in December 2014. The shares were repurchased at an average price of $16.10 per share.
The company recorded no further share repurchases following the activity in January. The repurchase activity reduced the company's shares outstanding and trading at March 31, 2015 to 242.0 million shares.
The company intends to take a cautious approach to future share repurchases at least until market conditions in the offshore drilling business stabilize. ■