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• The Company reported Adjusted EBITDA of $104.7 million for the first quarter of 2013, as compared to $50.7 million for the first quarter of 2012.(1) Recent Events - On February 28, 2013, the Company signed definitive documentation for a $1.35 billion syndicated secured term loan facility to partially finance the construction costs of the newbuilding drillships Ocean Rig Mylos, Ocean Rig Skyros and Ocean Rig Athena, scheduled for delivery in August 2013, October 2013 and November 2013, respectively. The facility has a five-year term and a repayment profile of approximately 11 years and bears interest at LIBOR plus a margin. George Economou, Chairman and Chief Executive Officer of the Company commented: "During the first quarter of 2013, our results were adversely impacted by the scheduled drydock, for contract-related upgrades, of the Leiv Eiriksson which commenced drilling operations for Rig Management Consortium offshore Norway on April 15th 2013. During the quarter, we also experienced certain blowout preventer- related downtime with respect to Eirik Raude and the Ocean Rig Mykonos which resulted in low operating efficiency for those two units. Our remaining four ultra-deepwater (“UDW”) units performed at an average of 97% operating efficiency during the quarter, which we find satisfactory. In 2013, our focus has turned to the relocation of our day-to-day management functions to Athens, the integration of our three newbuilding drillships – the Ocean Rig Mylos, Ocean Rig Skyros and Ocean Rig Athena- into our fleet and the reduction of our operating expenses and increasing operating efficiency. I am pleased with the progress we have made year to date. I expect the new structure, with management headquarters in Athens, will help us manage our costs and increase our operating efficiency by utilizing our local hubs in Brazil, Angola and Norway. Our on-the-water fleet is expected to grow this year by three 7th generation UDW drillships as we take delivery of the Ocean Rig Mylos, Ocean Rig Skyros and Ocean Rig Athena. We plan to leverage our experience gained in 2011, when we took delivery of four UDW units, to successfully integrate in our fleet the three newbuilding drillships. Although we expect a minor delay of a couple of weeks in the delivery of the Ocean Rig Mylos, to August 2013, we have already ramped up onshore operations to accommodate all three of the newbuilding units. In addition, we have already completed over 70% of our essential crewing needs for the three units. We believe the outlook for the UDW drilling industry is very positive given the high level of demand we are continuing to witness, and the emergence of new drilling areas in East Africa and the Asia/Pacific region coming into focus. We currently have only one unit available for employment in late 2013, Ocean Rig Skyros, and we believe its employment prospects are very promising. We will continue to build on the Ocean Rig story and execute our plans to ensure long-term value creation for all our stakeholders.” Financial Review: 2013 First Quarter The Company recorded a net income of $6.4 million, or $0.05 basic and diluted earnings per share, for the three-month period ended March 31, 2013, as compared to a net loss of $46.3 million, or $0.35 basic and diluted losses per share, for the three-month period ended March 31, 2012. Adjusted EBITDA was $104.7 million for the first quarter of 2013, as compared to $50.7 million for the same period in 2012. (1) Revenues from drilling contracts increased by $83.4 million to $246.4 million for the threemonth period ended March 31, 2013, as compared to $163.0 million for the same period in 2012. Rig operating expenses increased to $120.8 million and total depreciation and amortization decreased to $53.4 million, for the three-month period ended March 31, 2013, from $85.3 million and $54.7 million, respectively, for the three-month period ended March 31, 2012. Total general and administrative expenses increased to $22.5 million in the first quarter of 2013 from $17.7 million during the comparative period in 2012. (1) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for a reconciliation to net income. Drill Rigs Holdings Inc - Supplemental Information Leiv Eiriksson The Leiv Eiriksson completed its scheduled drydock for equipment and winterization upgrades related to its contract with the consortium managed by Rig Management Norway and commenced, as expected, drilling operations under the three-year contract on April 15, 2013. During the first quarter of 2013, and until it commenced drilling operations, the Leiv Eiriksson was earning zero revenue and the majority of the operating expenses relating to such rig were capitalized. We believe that the significant investment in equipment and winterization upgrades will enable the Leiv Eiriksson to achieve high operating efficiency and will ensure its employment marketability for years to come. Eirik Raude The Eirik Raude commenced on January 1, 2013 drilling operations under the contract with European Hydrocarbons. During the initial phase of the drilling contract, testing revealed that the blow out preventer, or BOP, bonnets were defective and not performing up to specifications. The equipment replacement took 21 days, during which time the unit was earning zero revenue and operating expenses were accounted for on an “as incurred” basis. The unit then drilled for 27 days completing the first well of the two well contract. On March 3, 2013, European Hydrocarbons unilaterally cancelled the contract paying a termination fee of approximately $14.5 million. The Eirik Raude mobilized to Ireland and commenced drilling operations under its contract with ExxonMobil o n April 21, 2013. Following the completion of the ExxonMobil contract, the Eirik Raude is scheduled to commence mobilization from Ireland to offshore West Africa to commence a 4 to 6 wells contract with Lukoil in the third quarter of 2013. About Ocean Rig Ocean Rig is an international offshore drilling contractor providing oilfield services for offshore oil and gas exploration, development and production drilling, and specializing in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. The company owns and operates 10 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 8 ultra deepwater drillships, 3 of which are scheduled to be delivered to the Company during 2013 and 1 of which is scheduled to be delivered during 2015. Ocean Rig’s common stock is listed on the NASDAQ Global Select Market where it trades under the symbol “ORIG”. Visit the Company’s website at www.ocean-rig.com Ocean Rig press release |
Ocean Rig Udw Inc. reports financial and operating