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Beskrivning

LandFörenade Arabemiraten
ListaOB Match
SektorTjänster
IndustriShipping & Offshore
Shelf Drilling är verksamma inom olje- och gasbranschen. Bolaget förvaltar och äger ett flertal oljeriggar, så kallade jackup-riggar till sjöss. Störst verksamhet återfinns inom MENAM-regionen, vilket inkluderar Mellanöstern, Nordafrika och Medelhavet. Kunderna återfinns inom den industriella sektorn. Huvudkontoret ligger i Dubai, Förenade Arabemiraten.
2020-03-02 07:22:44
PRESS RELEASE

SHELF DRILLING REPORTS FOURTH QUARTER 2019 RESULTS

Dubai, UAE, March 2, 2020 – Shelf Drilling, Ltd. (“Shelf Drilling” and, together
with its subsidiaries, the “Company”, OSE: SHLF) announces results for the
fourth quarter and full year of 2019 ending December 31. The results highlights
will be presented by audio conference call on March 2, 2020 at 6:00 pm Dubai
time / 3:00 pm Oslo time. Dial-in details for the call are included in the press
release posted on February 18, 2020.

David Mullen, Chief Executive Officer, commented: “In 2019, the Company achieved
its best ever safety and operating results, further improving our long-term
track record and delivering on our commitment to our customers. As anticipated
in the previous quarter, we realized a significant increase in sequential
revenue of 21%, attributable to the start-up of seven new contracts across all
our geographies, and a high level of fall through to EBITDA.”
 
Mullen added: “The jack-up market continues to recover from cyclical lows as
demonstrated by our leading performance in securing new contracts and
extensions. In the fourth quarter, we more than doubled our backlog to $2.0
billion through awards equating to approximately 45 rig-years resulting in a
book-to-bill of 2.8 times for the full year 2019. At year-end, 31 of our 32
jack-ups were contracted for a utilization level of 97%. We further expanded our
premium jack-up fleet with the acquisition in January 2020 of the Shelf Drilling
Enterprise, which was immediately contracted for a 21-month initial term. We
remain focused on delivering safe and reliable services to our customers and
believe our recent backlog additions position us well to generate improving
financial results in 2020.”

Fourth Quarter Highlights

• Q4 2019 Revenue of $159.8 million, a 21% sequential increase compared to Q3
2019.
• Q4 2019 Adjusted EBITDA of $55.7 million, representing a margin of 35%.
• Full Year 2019 Revenue of $576.2 million and Adjusted EBITDA of $177.5
million. Adjusted EBITDA margin was 31%.
• Q4 2019 Net loss of $70.3 million. Full Year 2019 Net loss of $149.5 million.
• In Q4 2019, the Company recorded a non-cash impairment charge of $58.0 million
on long-lived assets, mainly five stacked rigs that have been inactive for two
years or more.
• Q4 2019 Capital Expenditures and Deferred Costs totaled $45.8 million. Full
Year 2019 Capital Expenditures and Deferred Costs were $300.1 million, including
$203.2 million associated with rig acquisitions.
• The Company’s cash and cash equivalents balance at December 31, 2019 was $26.1
million.
• The Company’s total debt at December 31, 2019 was $924.5 million, including
$35.0 million drawn on the Company’s revolving credit facility.
• A total of seven new contracts commenced in Q4 2019. This included the Shelf
Drilling Scepter and the Shelf Drilling Achiever, which completed their contract
preparation and started new contracts in December 2019 in Thailand and Saudi
Arabia, respectively. 
• $2.0 billion in contract backlog at December 31, 2019 across 31 contracted
rigs, up from $977 million and 29 contracted rigs at September 30, 2019. The
company added $1.2 billion of total awards during Q4 2019.
  o Long-term extensions on four jack-up rigs in direct continuation of their
respective current contracts in Saudi Arabia. The High Island II, High Island IV
and Main Pass I rigs were each awarded a 10-year extension, while the Main Pass
IV rig was awarded a 5-year extension.
  o An award for a three-year contract for the Trident II jack-up rig for
operations in India.
  o A three-year contract extension on the High Island VII jack-up rig in direct
continuation of its current contract for drilling operations in the United Arab
Emirates. 
  o A six months extension on the Rig 141 jack-up rig in direct continuation of
its current contract for operations in Egypt.
  o A one-well contract on the Baltic jack-up rig for operations in Nigeria.
  o A one-year extension on the Trident XIV jack-up rig in direct continuation
of its current contract for workover operations offshore Nigeria.
• In December 2019, the Company entered into an agreement with a subsidiary of
Maersk Drilling to purchase the Maersk Completer premium jack-up drilling rig
for a purchase price of $38 million. The purchase and acceptance of the rig was
completed on January 7, 2020 and the rig was renamed Shelf Drilling Enterprise.
Later in January 2020, the Company secured a 21-month contract, with a total
value of $59 million, expected to commence in August 2020 for operations in the
Gulf of Thailand. Including the purchase price, subsequent reactivation and
contract-specific upgrades, the estimated all-in delivered cost of the rig is
$81 million.
• In February 2020, the Company completed a private offering of $80 million
aggregate principal amount of 8.750% senior secured notes due 2024, the proceeds
of which will be used to finance the acquisition and deployment costs associated
with the Shelf Drilling Enterprise.
• Q1 2020 Revenue guidance of $173 to $181 million up from $159.8 million in Q4
2019.

Fourth Quarter Results

Revenue was $159.8 million in Q4 2019 compared to $132.0 million in Q3 2019. The
$27.8 million (21.1%) increase in revenue was largely due to the start-up of
seven new contracts in India, Nigeria, Saudi Arabia and Thailand, the return to
operations of two rigs in Nigeria and one rig in Saudi Arabia after completing
planned out of service time during Q3 and the full quarter of operations of one
rig in Tunisia which started its contract at the end of Q3 2019. Effective
utilization increased to 80% in Q4 2019 from 65% in Q3 2019.

Total operating and maintenance expenses of $92.1 million in Q4 2019 were
largely comparable with Q3 2019 of $91.4 million.  An increase in operating
expenses in India for the contract preparation of one rig expected to commence a
three-year contract in Q2 2020 was partly offset by a decrease in operating
expenses in Nigeria and Saudi Arabia as a result of the completion of contract
preparation on one rig in Saudi Arabia and planned out of service time on two
rigs in Nigeria.

General and administrative expenses were $14.4 million in Q4 2019 compared to
$12.8 million in Q3 2019. 

Adjusted EBITDA for Q4 2019 was $55.7 million compared to $32.0 million for Q3
2019. The Adjusted EBITDA margin for Q4 2019 was 35% compared to 24% in Q3 2019.

The Company performed impairment testing at the end of Q4 2019, and as a result,
a $58.0 million loss on impairment of long-lived assets was recorded in December
2019. Eight of the Company’s rigs were impaired, of which three stacked rigs
were reported as held for sale. 

Capital expenditures and deferred costs of $45.8 million in Q4 2019 decreased by
$18.4 million from $64.2 million in Q3 2019. This included $27.7 million in Q4
2019 relating to the reactivation and operation readiness projects on the
acquired rigs, compared to $33.2 million in Q3 2019. Capital expenditures and
deferred costs excluding rig acquisitions decreased to $18.1 million in Q4 2019
from $31.0 million in Q3 2019 mainly due to a higher level of spending in Q3
2019 associated with a planned out of service project for a rig under contract
in Saudi Arabia and a contract preparation project for a rig in Tunisia, both of
which were completed in Q3 2019.

Q4 2019 ending cash balance of $26.1 million decreased by $19.6 million from
$45.7 million at the end of Q3 2019. This included a further drawdown of $15.0
million in Q4 2019 on the Company’s revolving credit facility. The decrease in
cash and additional drawdown on the Company’s revolving credit facility was
mainly due to outflows related to the deployment costs of the acquired rigs
(Shelf Drilling Scepter, Shelf Drilling Achiever and Shelf Drilling Journey).

The Consolidated Financial Statements and the Form 10-K equivalent are available
on our website. A corresponding slide presentation to address the results
highlights for Q4 2019 is also available on the Company website.


For further queries, please contact: 
Greg O'Brien, Executive Vice President and Chief Financial Officer 
Shelf Drilling, Ltd. 
Tel.: +971 4567 3616 
Email: greg.obrien@shelfdrilling.com


About Shelf Drilling 
Shelf Drilling is a leading international shallow water offshore drilling
contractor with rig operations across Middle East, Southeast Asia, India, West
Africa and the Mediterranean. Shelf Drilling was founded in 2012 and has
established itself as a leader within its industry through its fit-for-purpose
strategy and close working relationship with industry leading clients. The
Company is incorporated under the laws of the Cayman Islands with corporate
headquarters in Dubai, United Arab Emirates. The Company is listed on the Oslo
Stock Exchange under the ticker “SHLF”. 


Special Note Regarding Forward-Looking Statements
Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "believe", "expect", "anticipate",
“strategy”, "intends", "estimate", "will", "may", "continue", "should" and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the Company believes that these assumptions were
reasonable when made, these assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important
factors which are difficult or impossible to predict and may be beyond its
control. Such risks, uncertainties, contingencies and other important factors
could cause actual events to differ materially from the expectations expressed
or implied in this release by such forward-looking statements. Given these
factors, you should not place undue reliance on the forward-looking statements.

Additional information about Shelf Drilling can be found at
www.shelfdrilling.com.

This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.