PRESS RELEASE
SHELF DRILLING REPORTS FOURTH QUARTER 2024 RESULTS
Dubai, UAE, March 3, 2025 - Shelf Drilling, Ltd. ("Shelf Drilling", "SDL" and,
together with its subsidiaries, the "Company", OSE: SHLF) announces results for
the fourth quarter and full year of 2024 ended December 31. The results
highlights will be presented by audio conference call on March 3, 2025 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 21, 2025 and on page 3 of this release.
Greg O'Brien, Chief Executive Officer, commented: "Our Adjusted EBITDA for the
fourth quarter of 2024 was $85 million, representing an increase of 23% over the
previous quarter, after excluding the acceleration of mobilization revenue in Q3
for two suspended rigs in Saudi Arabia. The increase was mostly driven by higher
revenue in Nigeria and Norway, following the commencement of new contracts in
Q4."
O'Brien added: "The fourth quarter of 2024 concluded a year marked by
significant and unexpected challenges for Shelf Drilling, including rig
suspensions in Saudi Arabia and a start-up delay in Norway. I am extremely proud
of the responses from our entire team, redeploying assets and securing new
backlog, identifying innovative ways to reduce costs and preserve cash, while
continuing to deliver best-in-class services to our customers. Two of the
suspended rigs in Saudi Arabia were quickly redeployed to Nigeria and started
new long-term contracts in the last quarter of 2024, while another two rigs are
now being mobilized to West Africa for programs in the region. The recently
announced alliance with Arabian Drilling will create additional opportunities in
our core markets.
While we continue to see short-term pressure on dayrates following multiple
rounds of rig suspensions in Saudi Arabia in 2024, we remain very confident in
the long-term outlook for jack-up supply and demand. We firmly believe that the
constructive backdrop for oil and gas, combined with our strong customer
relations and unique operating platform, will enable us to drive long-term value
for our stakeholders."
Fourth Quarter Highlights and Subsequent Events
o Q4 2024 adjusted revenues of $225.4 million.
o Q4 2024 adjusted EBITDA of $85.0 million, representing an adjusted EBITDA
margin of 38%, including $16.7 million adjusted EBITDA from Shelf Drilling
(North Sea), Ltd. ("SDNS") and $68.3 million from the rest of the business.
o Full year 2024 adjusted revenues of $972.4 million, adjusted EBITDA of $350.7
million and adjusted EBITDA margin of 36%.
o Full year 2024 net income attributable to controlling interest of $81.4
million, including $24.1 million in Q4 2024.
o Full year 2024 capital expenditures and deferred costs totaled $152.4 million,
including $31.0 million in Q4 2024.
o The Company's cash and cash equivalents balance at December 31, 2024 was
$152.3 million.
o In February 2025, the Company announced that it had entered into a memorandum
of understanding to form a strategic alliance with Arabian Drilling Company for
the deployment of premium jack-up rigs internationally and to unlock new
opportunities in our core markets.
o Key rig developments include:
- Two-year new contract for the Main Pass IV in Nigeria commenced in December
2024.
- Sale of Main Pass I for $11.0 million, which was completed in January 2025.
- Trident VIII insurance claim resolution and rig retirement expected to be
completed in Q1 2025.
- One-year contract extension for the Shelf Drilling Scepter in Nigeria ending
in July 2026.
- Return to operations for Trident XVI in Egypt in February 2025.
- Shelf Drilling Victory and High Island II mobilizing to West Africa for new
contract opportunities.
o Financial guidance for the full year 2025 is included in "2025 Financial
Guidance" section of the Q4 2024 results highlights presentation on our website.
Fourth Quarter Results
Adjusted revenues were $225.4 million in Q4 2024 compared to $264.7 million in
Q3 2024. The $39.3 million (15%) sequential decrease in adjusted revenues was
driven by the $45.2 million acceleration of mobilization revenue in Q3 2024 on
two rigs for which operations were suspended in Saudi Arabia, partially offset
by higher average earned dayrates and higher effective utilization in Q4 2024.
Effective utilization increased to 80% in Q4 2024 from 77% in Q3 2024, primarily
due to the commencement of new contracts for three rigs in Vietnam, West Africa
and Norway from mid-Q3 2024 to late Q4 2024. Average earned dayrate increased to
$87.5 thousand in Q4 2024 from $81.8 thousand in Q3 2024 mainly due to one rig
in Norway and two rigs in West Africa starting new contracts.
Total operating and maintenance expenses decreased by $3.1 million (2%) in Q4
2024 to $129.5 million compared to $132.6 million in Q3 2024. The sequential
decrease was primarily due to lower mobilization costs for one rig in West
Africa that commenced a new contract in Q4 2024 and lower operating costs for
one rig in West Africa that was sold in Q3 2024.
General and administrative expenses decreased by $0.8 million in Q4 2024 to
$15.8 million as compared to $16.6 million in Q3 2024. The sequential decrease
was primarily due to a decrease in compensation and benefit expenses partially
offset by an increase in provision for credit losses.
Adjusted EBITDA for Q4 2024 was $85.0 million compared to $114.2 million for Q3
2024. The adjusted EBITDA margin of 38% for Q4 2024 decreased as compared to 43%
in Q3 2024. The significant decrease in adjusted EBITDA resulted primarily from
the acceleration of mobilization revenues on two suspended rigs in Saudi Arabia
in Q3 2024. The adjusted EBITDA for SDNS increased sequentially to $16.7 million
from $(4.9) million primarily due to the commencement of new contracts in
Vietnam and Norway in August and November 2024, respectively.
Capital expenditures and deferred costs of $31.0 million in Q4 2024 decreased by
$3.9 million from $34.9 million in Q3 2024. This sequential decrease was
primarily due to lower planned maintenance and shipyard costs for one rig in
Saudi Arabia and lower contract preparation expenditures for two rigs that
commenced new contracts in late Q3 and Q4 2024 in West Africa. This was
partially offset by increased spending on fleet spares and for one rig in Norway
that commenced a new contract in Q4 2024.
Q4 2024 ending cash and cash equivalents balance was $152.3 million. The
decrease of $67.8 million from $220.1 million at the end of Q3 2024 was
primarily due to higher debt service payments ($37.5 million of principal
payment and $69.0 million of interest payments) in Q4 2024 and a $30.1 million
payment for the purchase of the remaining 40% shares from the former SDNS
shareholders in Q4 2024. This was partially offset by cash insurance proceeds of
$44.0 million for the Trident VIII that was declared a total constructive loss
by the Company's insurance underwriters in October 2024 following its structural
damage in April 2024.
The Form 10-K Equivalent, which includes the consolidated financial statements,
and a corresponding slide presentation to address the results highlights for Q4
2024 are available on the Company's website.
For further queries, please contact:
Douglas Stewart, Executive Vice President and Chief Financial Officer
Shelf Drilling, Ltd.
Tel.: +971 4567 3400
Email : douglas.stewart@shelfdrilling.com
Dial in Details for the Audio Conference call
Participants will receive conference access information only when they register
for the conference via the link below:
Online Registration:
https://register.vevent.com/register/BI0f1d9107a5f741c3b49f5454a0b2e7bc
Participants must register for the call using online registration. Upon
registering, each participant will be provided with call details.
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, Mediterranean and North Sea. 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, users of this information 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.