95% Operational Utilization and Excellent Safety Performance
ENSCO DS-8 Contracted with Total in Angola for Five-Year Term
ENSCO 121 Commenced Initial Contract with Wintershall in North Sea
ENSCO 122 Delivered Ahead of Schedule and On Budget
High-Grading Continues: Ordered Two ENSCO 140 Series Rigs, Sold One Jackup and Will Sell Five Floaters Now Held For Sale
$1.5 Billion Non-Cash Impairment Charge Taken for Eight Floaters: Four Held For Sale in Discontinued Operations and Four in Continuing Operations
LONDON–(BUSINESS WIRE)– Ensco plc (NYSE: ESV) today reported a loss of $5.07 per diluted share in second quarter 2014 compared to earnings of $1.55 per diluted share in second quarter 2013. The loss from discontinued operations for second quarter 2014, which includes a $546 million pre-tax loss on impairment for four floaters that are now held for sale, was $2.38 per share compared to a gain of $0.07 per share in second quarter 2013. The loss from continuing operations in second quarter 2014 was $2.69 per share, compared to earnings from continuing operations of $1.48 per share in second quarter 2013. Excluding a loss on impairment for four floaters in continuing operations totaling $992 million, or $4.27 per share, second quarter earnings from continuing operations were $1.58 per share, compared to $1.48 per share in second quarter 2013.
Chief Executive Officer and President Carl Trowell said, “Our focus on operational excellence and safety has yielded very good results with 95% operational utilization for the quarter and a total recordable incident rate year to date that is even better than our record safety performance in 2013. We ended the quarter with near-record revenue backlog for our jackup fleet given positive contracting across several regions, however, market conditions for floating rigs have become more challenging. We believe the fundamental drivers of long-term demand for newer, more technologically-advanced floaters are still favorable and our recent contracts for ENSCO DS-8 and ENSCO DS-9 are great examples. Regardless of what the market brings, Ensco’s strategy of offering differentiated rig designs and drilling services, coupled with our strong financial position, give us a competitive advantage.â€
Mr. Trowell continued, “Our capital projects team successfully managed the delivery of ENSCO 122 ahead of schedule and ENSCO 121 has commenced its initial contract for Wintershall in the North Sea. Given our positive outlook for key shallow water markets where Ensco has the number one position, we ordered two ENSCO 140 Series jackups. These rigs have enhanced operational capabilities as well as our patented Canti-Leverage AdvantageSM technology that will translate into significant logistical efficiencies and cost savings for customers.â€
“Fleet high-grading during the quarter also included our decision to sell five floaters with an average age of 32 years,†added Mr. Trowell. “This decision followed an in-depth review of our fleet given more challenging floater market conditions, particularly for older midwater rigs. These actions will allow us to more quickly reduce expenses and focus on our go-forward fleet of floaters that has an average age of just nine years. As part of our fleet review, we recorded a $1.5 billion non-cash impairment charge during the quarter for eight floaters.â€
Second Quarter Results
“The loss of $5.07 per diluted share in second quarter 2014 reflects write-downs to the carrying values of eight floaters following a comprehensive review of our fleet in light of more challenging market conditions,†said EVP and Chief Financial Officer Jay Swent. “When you exclude the impact of our decision to sell five rigs, the impairment charges and the gain on sale of ENSCO 85, earnings per share were $1.35 in second quarter 2014.â€
As detailed below, impairment charges in continuing operations and discontinued operations totaled $6.47 per share in second quarter 2014. Depreciation expense was reduced by a total of $0.04 per share in connection with these impairment charges and there was a $0.01 per share gain on the sale of ENSCO 85. Excluding these items from the reported loss of $5.07 per diluted share, earnings were $1.35 per share in second quarter 2014.
Mr. Swent continued, “Since the $1.5 billion impairment charge is a non-cash item, it did not reduce cash flows from operating activities that totaled nearly $1 billion for the first six months of 2014.â€
For detailed report visit: http://www.enscoplc.com/Newsroom/Press-Releases/Press-Release-Details/2014/Ensco-plc-Reports-Second-Quarter-2014-Results/default.aspx
Source: Ensco plc
Ensco plc
Sean O’Neill, 713-430-4607
Vice President – Investor Relations and Communications
or
Nick Georgas, 713-430-4490
Manager – Investor Relations
