George Economou, Chairman and Chief Executive Officer of the Company commented:
"Adjusted for one-time factors, Ocean Rig reported solid results for the quarter, with our drilling units operating at acceptable levels of efficiency. The scheduled drydock of the Eirik Raude, which is scheduled to be completed in the fourth quarter of 2012, combined with costs mainly associated with two of our units preparing to work in Angola resulted in higher operating expenses. Following the completion of certain upgrades to the Leiv Eiriksson early next year, we look forward to having all six of our drilling units operating efficiently in their respective locations throughout the remainder of 2013. In addition, in 2014 we will enjoy the additional revenue contribution from our three newbuilding drillships scheduled to be delivered in 2013.
We have recently been awarded two three-year drilling contracts for the Ocean Rig Poseidon and the Ocean Rig Athena and still have one letter of intent for a drilling contract for the Eirik Raude. Assuming this contract materializes, our total backlog will reach approximately $4.5 billion over three years and will provide Ocean Rig with substantial cash flow visibility and growth.
During the quarter, our wholly-owned subsidiary, Drill Rigs Holdings, issued $800.0 million in senior secured notes to refinance indebtedness maturing in the second half of next year. We also continued to work with our banks and commenced the syndication process for a $1.35 billion credit facility to fund the installments and other expenses due on delivery of our three 2013 newbuildings. The syndication is progressing smoothly and we expect to finalize it early next year. We also placed an order with Samsung for an additional newbuilding to be delivered in the first quarter of 2015.
We believe the outlook for the ultra-deepwater drilling industry is very positive given the high level of demand we are continuing to witness for our units from all over the world. Oil company capital expenditures for 2012 and 2013 are projected to grow at a double-digit rate with most of this directed at exploration and production. An increasing number of large discoveries have also been announced in deepwater and ultra-deepwater in several new oil and gas provinces, which we believe will provide long-term demand for drilling units into the foreseeable future.
Given strong industry fundamentals and the fact that there are very few ultra-deepwater units available in 2013, we expect to further increase our already substantial backlog by entering into contracts for our two remaining units available in 2013. We continue to build on the Ocean Rig story and have positioned the company to build further on this strong platform to become the preferred contractor in the ultra deepwater sector."
Financial Review: 2012 Third Quarter
The Company recorded a net loss of $12.2 million, or $0.09 basic and diluted loss per share, for the three-month period ended September 30, 2012, as compared to a net income of $49.1 million, or $0.37 basic and diluted earnings per share, for the three-month period ended September 30, 2011. Adjusted EBITDA was $122.5 million for the third quarter of 2012, as compared to $132.6 million for the same period in 2011. (1)
Revenues from drilling contracts increased by $59.7 million to $285.7 million for the three-month period ended September 30, 2012, as compared to $226.0 million for the same period in 2011.
Most Popular Stories
- 2013 Tech Gift Guide: iPad Mini Still Hot; Chromecast a Great Low-Cost Option
- Dell Offers Undisclosed Number of Employee Buyouts
- Authorities Close to Deal with JPMorgan Chase over Madoff Response
- Apple Activates Customer-Tracking iBeacon
- It's No Yolk: Food-tech Startups Take Aim at Replacing Eggs
- Saab Gets Back into the Game; U.S. Auto Sales Soar
- A Biography of Jonathan Ive, Apple's Creative Chief
- US Consumer Borrowing Rose $18.2B in Oct.
- 2014 World Cup Official Noisemakers Quieter than Vuvuzelas
- Unjustified?: Justin Timberlake's Grammy snub