Monday, August 27, 2012

SeaDrill [SDRL] Releases 2nd Quarter 2012 Earnings Report

COT fund favorite SeaDrill released their 2nd quarter 2012 earnings report. Sending it higher pre market Monday morning......


* Seadrill generates second quarter 2012 EBITDA*) of US$634 million.

* Seadrill reports second quarter 2012 net income of US$554 million and earnings per share of US$1.12.

* Seadrill increases the ordinary quarterly cash dividend by US$0.02 to US$0.84.

* Seadrill commences operations with the ultra deepwater newbuilds West Capricorn and West Leo in the Gulf of Mexico and Ghana respectively.

* North Atlantic Drilling Ltd (NADL) secures a two year extension for the semi-submersible rig West Alpha, with a total revenue potential of US$410 million.

Subsequent events

* Seadrill secures a commitment for 19 rig years for the ultra deepwater newbuilds West Auriga and West Vela, and an ultra-deepwater unit to be announced, with a total revenue potential of US$4 billion.

*Seadrill secures a commitment for a five-year contract for the ultra-deepwater drillship West Polaris with a total revenue potential of US$1.1 billion.

* Seadrill secures an aggregated seven-year commitment for the ultra-deepwater drillships West Gemini and West Capella with a total revenue potential of US$1.6 billion. The contracts are subject to formal approvals to be received no later than end of October.

* Seadrill refinances a credit facility of US$585 million related to the majority of our tender rig fleet increasing the nominal amount to US$900 million and also including one additional newbuild unit. The new facility increases liquidity by US$588 million.

* Seadrill Partners LLC (the MLP) submits its first draft to the SEC for review. * Seadrill reduces its ownership in SapuraKencana to 6.4%, releasing proceeds of approximately US$200 million.

*) EBITDA is defined as earnings before interest, depreciation and amortization equal to operating profit plus depreciation and amortization.

Condensed consolidated income statements, second quarter and six months 2012 results

Consolidated revenues for the second quarter of 2012 amounted to US$1,122 million compared to US$1,050 million in the first quarter 2012.

Operating profit for the quarter was US$483 million compared to US$456 million in the preceding quarter.
Net financial items for the quarter showed a gain of US$114 million compared to a gain of US$24 million in the previous quarter, as we in the second quarter recorded an accounting gain of US$169 million largely related to the merger of SapuraCrest Petroleum Bhd (SapuraCrest) and Kencana Petroleum Bhd (Kencana). In addition we recorded a gain on sales of 300 million shares in SapuraKencana of US$84 million.

Income taxes for the second quarter were US$43 million, up from US$41 million in the previous quarter.
Net income for the quarter was US$554 million or basic earnings per share of US$1.12.

Chief Executive Officer in Seadrill Management AS Alf C Thorkildsen says in a comment, "We are pleased to deliver another strong quarter, reflecting our solid operational performance. Since our last reporting we have secured new contracts with an estimated revenue potential of US$7.6 billion, reflecting both our clients satisfaction with our operations and the strong demand for high-specification quality equipment. In reflection of our strong operational performance, record high orderbacklog and the strong market outlook we are pleased to announce a quarterly cash dividend of US$0.84."

Click here to get the entire 2nd quarter earnings report

Look for 3rd quarter results November 30th 2012

Analyst contact
Rune Magnus Lundetræ
Chief Financial Officer
Seadrill Management AS      +47 51 30 99 19

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