SDRL - Seadrill announces second quarter 2013 results

Highlights

• Seadrill reports its best operating results and net income ever and generated second quarter 2013 EBITDA*⁾ of US$665 million
• Seadrill reports second quarter 2013 net income of US$1,750 million and earnings per share of US$3.68
• Seadrill increases the ordinary quarterly cash dividend by 3 cents to US$0.91
• Economic utilization for floaters increased to 94% in Q2 2013 from 92% in Q1 2013
• Economic utilization for the jack-up fleet in Q2 2013 was 98%, down from 99% in Q1 2013
• Seadrill secured a three-year contract for the newbuild drillship West Neptune with a total estimated revenue potential of US$662 million
• Seadrill realized a gain of US$1,256 million from the sale of the tender rig division to SapuraKencana Petroleum for a total consideration of US$2.9 billion
• Seadrill completed the sale of the tender rig T-15 to Seadrill Partners LLC (SDLP) for a total consideration of US$210 million
• Seadrill ordered two jack-ups for a total estimated project price of US$230 million per rig, with deliveries in 4Q 2015 and 1Q 2016
• Seadrill and SapuraKencana joint project secured an eight year contract for three Pipe Laying Support Vessels with a total estimated revenue potential of US$2.7 billion
• North Atlantic Drilling completes sale and leaseback transaction for the newbuild harsh environment jack-up West Linus for US$600 million

Subsequent events

• Seadrill appoints Per Wullf as CEO to take over from Fredrik Halvorsen
• Seadrill orders four ultra-deepwater drillships for an estimated project price below US$600 million per rig, with deliveries scheduled for the second half of 2015
• Seadrill orders two jack-ups for an estimated project price of US$230 million per rig, with deliveries in the second and third quarters of 2016, respectively
• Seadrill reaches 50.1% ownership in Sevan Drilling and launches mandatory offer for all outstanding shares which closed on August 22, 2013
• Seadrill secures a 180 day contract for the newbuild ultra-deepwater drillship West Tellus with a total estimated revenue potential of US$150 million
• Seadrill secures a 2.5 year contract for the jack-up rig West Freedom with a total estimated revenue potential of US$222 million
• Seadrill secures a one year contract extension with Talisman in Malaysia for the jack-up rig West Vigilant at US$167,000 per day
• North Atlantic Drilling is awarded an extension of the current drilling contract, in addition to a new drilling contract for West Navigator, securing employment to December 2014 with a total estimated revenue potential of US$98 million

Consolidated financial information
Second quarter 2013 results

Consolidated revenues for the second quarter of 2013 were US$1,268 million compared to US$1,265 million in the first quarter of 2013.  The increase was despite the sale of the tender rig business, which operated for only 30 days in the quarter, resulting in a US$100 million revenue decline from 1Q 2013.  Overall improvement in fleet performance more than offset this revenue reduction.

Operating profit for the quarter was US$507 million compared to US$552 million in the preceding quarter.  The decrease is driven by gain on sale of the West Janus in the first quarter, offset by lower operating and SG&A expenses during the second quarter.

Net financial and other items for the quarter showed a gain of US$1,292 million compared to a loss of US$68 million in the previous quarter. The gain is primarily related to the sale of the tender rig business and positive impacts from interest rate swap movements.

Income taxes for the second quarter were US$49 million, an increase of US$5 million from the previous quarter.

Net income for the quarter was US$1,750 million representing basic and diluted earnings per share of US$3.68 and US$3.53, respectively.

Balance sheet
As of June 30, 2013, total assets were US$21,801 million, an increase of US$595 million compared to March 31, 2013.

Total current assets increased to US$2,978 million from US$2,350 million over the course of the quarter, primarily driven by an increase in marketable securities and other current assets, offset by a decrease in amounts due from related party and the sale of the tender rig business.  

Total non-current assets increased to US$18,823 million from US$18,856 million primarily due to yard payments on the West Auriga, West Vela, T-16, and West Mira, offset by the sale of the tender rig business.

Total current liabilities decreased to US$4,397 million from US$4,782 million largely due to decreases in short term debt to related party and liabilities associated with sale the tender rig business, offset by an increase in the current portion of long-term debt.

Long-term interest bearing debt increased to US$8,521 million from US$7,883 million over the course of the quarter and total net interest bearing debt decreased to US$11,186 million from US$11,674 million.  The decrease is primarily due to repayments of related party debt.

Total equity increased to US$7,840 million from US$6,530 million as of June 30, 2013. The increase is primarily driven by net income for the quarter, offset by dividends paid.

Cash flow
As of June 30, 2013, cash and cash equivalents were US$437 million, an increase of US$109 million compared to the previous quarter.

Net cash from operating activities for the six month period ended June 30, 2013 was US$671 million and net cash used in investing activities for the same period was US$444 million.  Net cash used in financing activities was US$108 million.

Media contact
Rune Magnus Lundetræ
Chief Financial Officer
Seadrill Management Ltd.
+44 (0) 7766 071010   

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