|
First Quarter 2012 Financial Highlights • For the first quarter of 2012, the Company reported a net loss of $46.3 million, or $0.35 basic and diluted loss per share. The loss is largely attributed to downtime and mobilization related to the commencement of new contracts. Included in the first quarter of 2012 results are charges relating to an out-of-court settlement and associated legal costs for $6.4 million, or $0.05 per share. As has been previously disclosed, a legal claim was made by the Company's manager in Angola for the reimbursement of import/export duties levied by the Angolan government for the period 2002 to 2007 when the Leiv Eiriksson operated in Angola. An agreement has been reached for an amount paid by the Company in full and final settlement of the London High Court proceedings. Excluding the above items, the Company’s net results would have amounted to a net loss of $39.9 million or $0.30 per share. • The Company reported Adjusted EBITDA of $52.1 million for the first quarter of 2012 as compared to $61.5 million for the first quarter of 2011.(1) Recent Events • On May 15, 2012 the Ocean Rig Corcovado completed the general testing of equipment as required by Petroleo Brazilieiro S.A., and has commenced revenue-generating drilling operations in Brazil. • On May 14 and May 9, 2012, the Company signed amendments under its $990 million senior secured credit facilities and $800 million senior secured term loan agreement, respectively, to, among other things, allow: Ocean Rig UDW Inc. to pay dividends in an amount up to 50% of its net income subject to certain conditions being met; allow borrowers, which are subsidiaries of the Company, to pay dividends to Ocean Rig UDW Inc., as long as certain conditions are met; and remove all cross-default or cross-acceleration clauses relating to the debt of DryShips Inc. • On May 10, 2012 the Company signed definitive documentation for the Ocean Rig Olympia with Total E&P Angola (“Total”). The contract is for a three-year period for drilling offshore West Africa, with an estimated backlog of approximately $652 million. Total has the option to extend the contract for two periods of one year each. George Economou, Chairman and Chief Executive Officer of the Company commented: 
“The build out of Ocean Rig continues as all six rigs are now operating on contracts. The short term
contracts we had taken during 2010 and 2011 will all play out over the next twelve months, after
which all the rigs will be on long-term contracts. This year we have entered into two three-year
contracts with Total, solely on the Ocean Rig Olympia and as lead operator on the Leiv Eiriksson
contract. With these contracts our total backlog has increased to $2.9 billion and provides good cash
flow visibility.“During the quarter we also streamlined our bank debt covenants to allow for dividends of the parent company and remove the ring fencing of our various lending facilities. In addition, we have now removed all cross-default provisions relating to the debt of DryShips creating a clear separation of the credit profile of Ocean Rig. “We believe the outlook for the ultra deepwater drilling industry is very positive given the high level of demand we are seeing from all over the globe. Capital expenditures from oil companies are expected to increase by close to 15% this year and a major portion of this will be targeted towards exploration and development. An increasing number of large discoveries have also been announced in deepwater and ultra deepwater in several new oil and gas provinces, which should provide longterm demand for rigs into the foreseeable future. Given strong industry fundamentals and the fact that there are virtually no available units in 2012 we expect to further increase our backlog by entering into long term contracts for our three 2013 newbuilding drillships, the Eirik Raude and the Ocean Rig Poseidon.” Financial Review: 2012 First Quarter The Company recorded net loss of $46.3 million, or $0.35 basic and diluted loss per share, for the three-month period ended March 31, 2012, as compared to net income of $28.9 million, or $0.22 basic and diluted earnings per share, for the three-month period ended March 31, 2011. Adjusted EBITDA was $52.1 million for the first quarter of 2012 as compared to $61.5 million for the same period in 2011. Revenues from drilling contracts increased by $53.7 million to $163.0 million for the three-month period ended March 31, 2012, as compared to $109.3 million for the same period in 2011. Rig operating expenses and total depreciation and amortization increased to $85.3 million and $54.7 million, respectively, for the three-month period ended March 31, 2012, from $41.9 million and $28.2 million, respectively, for the three-month period ended December 31, 2011. Total general and administrative expenses increased to $16.3 million in the first quarter of 2012 from $7.2 million during the comparative period in 2011. (1) Adjusted EBITDA is a non-GAAP measure, please see later in this press release for a reconciliation to net income. Full report at: www.ocean-rig.com Ocean Rig press release |
Ocean Rig UDW Inc. Reports Financial and Operating