BW Offshore: Q4 2014 - Interim consolidated financial information
- Explosion onboard FPSO Cidade de São Mateus
- EBITDA of USD 104.1 million in Q4 2014 and USD 520.3 for the year 2014
- Stable operations with an uptime of 99.8% during the fourth quarter and 99.6% for the full year
- Contract extension for FPSO Umuroa and FPSO Abo
- Dividend payment of USD 0.02 per share
Operating revenues for Q4 2014 amounted to USD 264.8 million, an increase of USD 16.3 million compared to USD 248.5 million in Q3 2014. Operating expenses amounted to USD 160.6 million, an increase of USD 12.6 million compared to USD 148.0 million in the previous quarter.
EBITDA for Q4 2014 amounted to USD 104.1 million, a decrease of USD 16.2 million compared to USD 120.3 million in Q3 2014.
Net profit amounted to USD 12.7 million compared to USD 40.4 million in the previous quarter.
Main change compared to last quarter relates to a gain of USD 19.7 million booked in third quarter as a result of the acquisition of the remaining 50% share of FPSO Petróleo Nautipa from Yinson Production.
Total equity at 31 December 2014 amounted to USD 1,132.2 million, a decrease of USD 75.4 million compared to USD 1,207.6 million at 30 September 2014. Equity has decreased mainly as a result of unrealised losses on cash flow hedges during the quarter. The equity ratio was 30.9% at the end of the quarter, down from 33.9% last quarter.
Net debt amounted to USD 1,655.6 million at 31 December 2014, compared to USD 1,577.5 million at 30 September 2014. Total available liquidity as of 31 December 2014 amounted to USD 337.0 million.
Net cash inflow from operating activities was USD 133.2 million compared to USD 125.1 million in the previous quarter. Net cash outflow from investing activities was USD 168.5 million compared to USD 87.7 million in the previous quarter. Cash outflow on investing activities is mainly related to capitalisation on the Catcher project and capital expenditures for ongoing life extension activities. Most life extension activities are either covered on a cost plus basis or reimbursed through higher day rates. Net cash inflow from financing activities was USD 66.4 million compared to cash outflow of USD 49.3 million in the previous quarter.
PRELIMINARY RESULT 2014
BW Offshore recorded a full year EBITDA of USD 520.3 million compared to USD 443.1 million in 2013. The increase of USD 77.2 million (17%) is mainly due to the early termination fee received for Azurite, gain recognised from acquisition of the remaining 50% share in FPSO Petróleo Nautipa and reduced project expenses compared to last year.
Net result for the year amounted to USD 187.2 million compared to USD 81.4 million in 2013.
BW Offshore operates 18 units. The owned fleet consists of 14 FPSOs, one FSO and one VLCC tanker. All operating units experienced stable performance with an average uptime of 99.8% during the fourth quarter.
The Company operates the FPSO Peregrino for Statoil and Sinochem on the Peregrino oil field offshore Brazil and the FPSO P-63 owned by Petrobras and Chevron on the Papa Terra field offshore Brazil.
BW Offshore formally completed the transaction with Yinson Holding Berhad to take over remaining 50% of FPSO Petróleo Nautipa in October 2014 and has before the year end taken over all operations. Based on agreements in place, the vessel owning company has been consolidated as a subsidiary from the beginning of third quarter 2014.
During the quarter, BW Offshore signed a one year contract extention for the lease and operation of the FPSO Umuroa. The FPSO is operating on the Umuroa field offshore New Zealand for AWE. The firm period has been extended to fourth quarter 2016.
In December 2014, BW Offshore signed a Letter of Intent for a two years extention for FPSO Abo with Nigerian Agip Exploration Ltd, a subsidiary of ENI S.p.A. until fourth quarter 2016, with options for additional seven years (until fourth quarter 2023). The Company is currently performing life extension activities on the unit, which are being compensated on a reimbursable cost plus basis.
The termination from Murphy West Africa Limited for FDPSO Azurite was effective May 2014. The vessel is currently being marketed for new projects. The Company was compensated for the early termination of the contract. The compensation reflected the value of the remaining period of the original fixed term of the contract, and was recognised at time of termination.
The VLCC, BW Opal, is marketed for new projects. All other FPSOs and FSO are on contract per the end of the year. Continuation of the current low oil price may affect the likelihood of contract extensions being excercised for units coming to the end of their contracts going forward.
On 30 April 2014 BW Offshore signed a contract with Premier Oil for a FPSO to operate on the Catcher oil field in the UK North Sea. The field was by 31 December owned by Premier Oil (50% operator), Cairn Energy (30%) and MOL (20%). After the year end Dyas UK has acquired a 10% interest in the field from Cairn Energy. The firm charter period of the contract is seven years, with extension options of up to 18 years. Based on a field life of 10 years, the contract value is USD 2.3 billion including FPSO charter rate and opex.
During the last quarter of 2014, significant progress was made on engineering, procurement and construction activities. Notably fabrication on the turret mooring system is progressing well and a major topside fabrication contract has been awarded. BWO is regularly visiting and will continue to work closely with all subcontractors to ensure focus on cost and schedule.
The Company is also undertaking a number of modification and life extension activities on existing units. These activities are either covered on a cost plus basis or reimbursed through higher day rates.
The outlook for BW Offshore's products and services has changed recently due to the drop in oil price. The short term demand situation for new leased units is currently uncertain. BW Offshore still expects outsourcing of production to be a cost effective solution for oil companies to pursue oil development initiatives in the future.
BW Offshore's cash flow from the operating units is secure and mainly based on long term contracts with national and independent oil companies. The fleet of BW Offshore will continue to generate a healthy cash flow in the time ahead. The trend of continued production outside the initially planned period has so far continued as seen from the recent extensions.
The Board has declared a cash dividend of USD 0.02 per share for Q4 2014.
Please see the attachments for the full quarterly report and presentation.
BW Offshore hosts a presentation of the financial results at 09:00 (CET) today at Hotel Continental in Oslo, Norway. The presentation will be given by CFO Knut R. Sæthre. The presentation will be broadcasted via webcast, and will also be available for replay. Please visit www.bwoffshore.com for link and login details.
For further information, please contact:
Knut R. Sæthre, CFO, +47 9111 7876 (Media)
Kristian Flaten, Vice President IR and Corporate Finance, +47 9509 2322 (Investors/analysts)
About BW Offshore:
BW Offshore is a leading global provider of floating production services to the oil and gas industry. BW Offshore is the world's second largest contractor with a fleet of 14 FPSOs and 1 FSO represented in all major oil regions world-wide. The company also operates additional 2 FPSOs. BW Offshore has a long track record on project execution and operations, as well as a robust balance sheet and strong financial capabilities. In more than 30 years of production, BW Offshore has executed 38 FPSO and FSO projects. The company is listed on the Oslo Stock Exchange. Further information is also available on www.bwoffshore.com
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.