OREANDA-NEWS. Paragon Offshore plc ("Paragon") (OTC: PGNPQ) today reported a fourth quarter 2015 net loss of $23.3 million, or a loss of $0.27 per diluted share, as compared to fourth quarter 2014 net income of $2.8 million, or $0.03 per diluted share. Results for the fourth quarter 2015 included a $28.8 million, or $0.33 per share, non-cash asset impairment charge related to fixed assets under construction and capital spare parts, a net gain on sale of assets of $0.5 million, or $0.01 per share, and a $2.1 million, or $0.02 per share, tax benefit as a result of the impairment.

Excluding the above charge, gain, and tax benefit, Paragon's adjusted net income for the fourth quarter 2015 was $3.0 million, or $0.03 per diluted share (for a reconciliation to net income for all "adjusted" metrics, see the Reconciliation of GAAP to Non-GAAP Financial Measures Table). Results for the fourth quarter 2014 included a $130.5 million, or $1.47 per diluted share, non-cash impairment charge related to four cold-stacked units each of which the company decided to scrap. Fourth quarter 2014 results also included an $11.7 million, or $0.13 per diluted share, gain related to the repurchase of an aggregate principal amount of $35.2 million of the company's senior unsecured notes. Excluding the impairment, the tax impact of the loss on the impairment, and the gain, Paragon's adjusted net income for the fourth quarter 2014 was $80.3 million, or $0.90 per diluted share.

For the twelve month period ending December 31, 2015, Paragon reported a loss of $999.6 million, or $11.65 per diluted share, on revenues of $1.5 billion compared to a net loss of $646.7 million, or a loss of $7.63 per diluted share, on revenues of $2.0 billion for the twelve month period ending December 31, 2014. Results for the full year 2015 included non-cash impairment charges of $1.2 billion as well as gains totaling $17.6 million related to the sale of assets and the repurchase of the company's senior unsecured notes. Excluding these items, Paragon's adjusted net income for full year 2015 was $95.7 million, or $1.04 per diluted share. This compares to net income for full year 2014 of $351.8 million, or $4.07 per diluted share, after adjusting 2014 results for non-cash impairment charges of $1.1 billion primarily related to four cold-stacked units and gains of $18.7 million related to the repurchase of the company's senior unsecured notes.

For the fourth quarter 2015, adjusted EBITDA, defined as net income (loss) before taxes, less interest expense, interest income, depreciation, losses on impairments, sale of assets and extinguishments of debt, was $95.9 million, compared to $140.3 million in the third quarter of 2015. For the twelve month period ending December 31, 2015, adjusted EBITDA was $561.3 million compared to $942.3 million for the full year 2014.

"Paragon responded to the deteriorating environment in the fourth quarter by reducing costs and advancing our efforts to strengthen the balance sheet," said Randall D. Stilley, President and Chief Executive Officer. "We lowered contract drilling costs in the fourth quarter by 18 percent and general and administrative costs by 20 percent, exclusive of restructuring costs, compared to the previous quarter. We also continued to reduce capital spending. Our restructuring efforts were rewarded as we were able to reach the recently announced agreements with debtholders to eliminate more than $1.1 billion in debt while preserving the flexibility to navigate this downturn."

Total revenues for the fourth quarter of 2015 were $299.6 million compared to $369.0 million in the third quarter of 2015. Paragon reported utilization for its marketed rig fleet, which excludes available days related to rigs that were stacked and not marketed during the quarter, as 56 percent for the fourth quarter of 2015 compared to 69 percent for the third quarter of 2015. Average daily revenues decreased three percent in the fourth quarter of 2015 to $140,000 per rig compared to the previous quarter average of $144,000 per rig. Contract drilling services costs declined 18 percent in the fourth quarter to $156.8 million compared to $190.5 million in the third quarter of 2015.

General and administrative ("G&A") costs for the fourth quarter 2015 totaled $17.6 million compared to $12.8 million for the third quarter of 2015 and $24.1 million for the fourth quarter of 2014. Restructuring costs totaled $8.2 million in the fourth quarter 2015 compared to $1.2 million in the third quarter 2015. Excluding restructuring costs, G&A costs were $9.3 million and $11.7 million for the fourth and third quarters of 2015, respectively. For the full year 2015, G&A costs totaled $50.1 million excluding $9.4 million in restructuring costs compared to $62.1 million for full year 2014.

Net cash from operating activities was $97.0 million in the fourth quarter of 2015 as compared to $79.7 million for the third quarter of 2015. Capital expenditures in the fourth quarter totaled $46.2 million, and $202.9 million for the full year. At December 31, 2015, liquidity, defined as cash and cash equivalents plus availability under the company's revolving credit facility, totaled $775.8 million while the company's leverage ratio, the ratio of the company's net debt to trailing twelve months EBITDA as defined in the company's revolving credit facility, was 3.78 at December 31, 2015.