Pacific Drilling Announces Third-Quarter 2016 Results

Pacific Drilling S.A. (NYSE: PACD) today announced net income for third-quarter 2016 of $0.2 million or $0.01 per diluted share, compared to net income of $8.2 million or $0.39 per diluted share for second-quarter 2016 and net income of $41.0 million or $1.95 per diluted share for third-quarter 2015.

CEO Chris Beckett said, "Our operating fleet continues to deliver excellent operational performance with a third-quarter revenue efficiency of 97%, and a year-to-date revenue efficiency of 98%, which coupled with strong cost control resulted in an Adjusted EBITDA margin of 53.8% in third-quarter 2016. Our operational performance is being recognized by our clients and led to Pacific Scirocco restarting operations in Nigeria for Total on October 3, 2016. Although we have seen an increase in market inquiries, and anticipate award of short term projects in the near-term, the market conditions continue to be very challenging. We do not anticipate recovery of the dayrate environment for several years, but remain convinced of the long-term potential of the platform and asset base we have built."

Third-Quarter 2016 Operational and Financial Commentary

Contract drilling revenue for third-quarter 2016 was $182.4 million, which included $12.3 million of deferred revenue amortization, compared to second-quarter 2016 contract drilling revenue of $203.7 million, which included $12.7 million of deferred revenue amortization. Contract drilling revenue decreased in the third-quarter primarily as a result of the Pacific Bora operating at a lower dayrate to finish its well in progress after completion of the primary contract term.

During the three months ended September 30, 2016, our operating fleet achieved average revenue efficiency of 97.0%. Operating expenses for third-quarter 2016 were $68.5 million, compared to $76.0 million for second-quarter 2016. The reduction in operating expenses was primarily the result of decreased costs across most of the rigs in our fleet and shore-based and other support costs. Operating expenses for third-quarter 2016 included $3.8 million in reimbursable costs, $6.6 million in shore-based and other support costs, and $3.8 million in amortization of deferred costs.

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