UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: May 4,  2017
Commission File Number 001-35345

PACIFIC DRILLING S.A.

8-10, Avenue de la Gare
L-1610 Luxembourg
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
 
Form 20-F  ☒	    	Form 40-F  ☐	
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
 
Yes  ☐	    	No  ☒	
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
 
Yes  ☐	    	No  ☒	
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form, is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes  ☐	    	No  ☒	
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

 

INFORMATION CONTAINED IN THIS FORM 6-K REPORT
 
On May 4, 2017, we issued a press release announcing our financial results for the first quarter ended March 31,  2017. A copy of that release is attached to this report on Form 6-K as Exhibit 99.1.
 
Also on May 4, 2017, we posted to our website our updated Fleet Status Report dated May 4, 2017. A copy of that report is attached to this report on Form 6-K as Exhibit 99.2.
 
The press release shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless the Company specifically incorporates the information by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934.
 
By filing this report on Form 6-K and furnishing this information, the Company makes no admission as to the materiality of any information contained in this report. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although the Company may do so from time to time as management believes is warranted.
 
Certain expectations and projections regarding the Company’s future performance referenced in the press release or the Fleet Status Update are forward-looking statements. These expectations and projections are based on currently available competitive, financial, and economic data and are subject to future events and uncertainties. In addition to the above cautionary statements, all forward-looking statements contained herein should be read in conjunction with the Company’s SEC filings, including the risk factors described therein, and other public announcements.

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ay	 	 	
 	Pacific Drilling S.A.	
 	(Registrant)	
 	 	
Dated:       May 4, 2017	By	/s/ Lisa Manget Buchanan	
 	 	Lisa Manget Buchanan	
 	 	SVP, General Counsel & Secretary	

EXHIBIT INDEX
 
The following exhibits are filed as part of this Form 6-K:

Exhibit	    	Description	
99.1	 	Press Release Announcing First Quarter 2017 Results	
99.2	 	Fleet Status Report as of May 4, 2017	

Exhibit 99.1 

 
Pacific Drilling Announces First-Quarter 2017 Results
	·		Revenues for first-quarter of $105.5 million with a revenue efficiency (a) of 98.0%	
	·		Net Loss of $99.8 million, resulting in $4.69 loss per diluted share	
	·		Operating and G&A costs of $82.9 million, a reduction of 11.9% from a year ago	
	·		Cash flow from operations for first-quarter of $28.7 million	
LUXEMBOURG (May 4, 2017) - Pacific Drilling S.A. (NYSE: PACD) today announced net loss for first-quarter 2017 of $99.8 million or $4.69 per diluted share, compared to net loss of $43.0 million or $2.03 per diluted share for fourth-quarter 2016, and net loss of $2.5 million or $0.12 per diluted share for first-quarter 2016.
 
CEO Chris Beckett said, "We delivered another quarter of solid operational performance with a first-quarter revenue efficiency of 98% and we continued to benefit from strong cost control. Market conditions are still challenging, although we have experienced an uptick in tenders and inquiries versus 2016. This supports our previously stated expectation of demand improvement through 2017 partially offsetting increased supply from rigs rolling off contract, which we believe will eventually lead to improving utilization in 2018.”

First-Quarter 2017 Operational and Financial Commentary
 
Contract drilling revenue for first-quarter 2017 was $105.5 million, which included $31.1 million of deferred revenue amortization, compared to fourth-quarter 2016 contract drilling revenue of $178.0 million, which included $29.4 million of deferred revenue amortization. The decrease in revenues resulted primarily from the Pacific Scirocco being offhire throughout the first-quarter and the Pacific Santa Ana completing its contract in January 2017, partially offset by the Pacific Bora going back to work in February 2017 compared to being offhire throughout the fourth-quarter 2016. During first-quarter 2017, our operating fleet achieved average revenue efficiency of 98.0%.
 
Operating expenses for first-quarter 2017 were $60.4 million as compared to $66.5 million for fourth-quarter 2016. Operating expenses for first-quarter 2017 included $3.3 million in amortization of deferred costs, $1.4 million in reimbursable expenses, and $6.7 million in shore-based and other support costs.  The reduction in operating expenses was primarily the result of lower costs throughout the fleet due to reduced activity, as well as the continued benefits of our cost saving measures.
 
General and administrative expenses for first-quarter 2017 were $22.5 million, compared to $18.9 million for fourth-quarter 2016. Excluding certain legal and financial advisory fees of $6.1 million in first-quarter 2017 and $7.1 million in fourth-quarter 2016, our corporate overhead expenses (b) for first-quarter 2017 were $16.4 million, compared to $11.8 million for fourth-quarter 2016. The increase in corporate overhead expenses in the first-quarter 2017 is primarily due to

 
 
the timing of expense recognition of incentive awards, including certain performance-based awards. These expenses are expected to decrease in each of the remaining quarters of 2017.
 
EBITDA (c) for first-quarter 2017 was $21.9 million, compared to EBITDA of $92.9 million in the fourth- quarter 2016.
 
Income tax expense for first-quarter 2017 was $2.1 million, as compared to $14.5 million for fourth-quarter 2016, primarily as a result of the application of quarterly tax accounting required under U.S. GAAP during fourth-quarter 2016.
 
For first-quarter 2017, cash flow from operations was $28.7 million. Cash balances, including $8.5 million in restricted cash, totaled $507.4 million as of March 31, 2017, and total outstanding debt was $3.0 billion.
 
On March 16, 2017, we reported the expiration of certain non-disclosure agreements we had entered into with an ad hoc group of holders of our capital markets indebtedness. CFO Paul Reese commented, “While currently, there is no consensus as to the form or structure of any restructuring, we continue to be engaged in discussions with all of our stakeholders, including our largest shareholder, our bank lenders and the ad hoc group, regarding a restructuring of our existing capital structure to be sustainable in the longer term.”
 
The company will not be holding an earnings conference call this quarter.
 
Footnotes
 
(a)  Revenue efficiency is defined as actual contractual dayrate revenue (excluding mobilization fees, upgrade reimbursements and other revenue sources) divided by the maximum amount of contractual dayrate revenue that could have been earned during such period.
 
(b)   Corporate overhead expenses is a non-GAAP financial measure.  For a definition of corporate overhead expenses and a reconciliation to general and administrative expenses, please refer to the schedule included in this release.
 
(c)   EBITDA is a non-GAAP financial measure. For a definition of EBITDA and a reconciliation to net income, please refer to the schedules included in this release.

About Pacific Drilling
 
With its best-in-class drillships and highly experienced team, Pacific Drilling is committed to becoming the industry’s preferred high-specification, floating-rig drilling contractor. Pacific Drilling’s fleet of seven drillships represents one of the youngest and most technologically advanced fleets in the world. For more information about Pacific Drilling, including our current Fleet Status, please visit our website at www.pacificdrilling.com.
 
Forward-Looking Statements
 
Certain statements and information contained in this press release constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are generally identifiable by the use of words such as “believe,” “estimate,” “expect,” “forecast,” “our ability to,” “plan,” “potential,” “projected,” “target,”  “would,” or other similar words, which are generally not historical in nature.
 
Our forward-looking statements express our current expectations or forecasts of possible future results or events, including our future financial and operational performance; revenue efficiency levels; market outlook; forecasts of trends; future client contract opportunities; contract dayrates; our business strategies and plans and objectives of management; estimated duration of client contracts; backlog; our ability to repay our debt; our expectations regarding potential future covenant defaults on our long-term debt; expected capital expenditures and projected costs and savings. 
 
Although we believe that the assumptions and expectations reflected in our forward-looking statements are reasonable and made in good faith, these statements are not guarantees and actual future results may differ materially due to a variety of factors. These statements are subject to a number of risks and uncertainties, many of which are beyond our control.

2

 

Important factors that could cause actual results to differ materially from our expectations include: the global oil and gas market and its impact on demand for our services; the offshore drilling market, including reduced capital expenditures by our clients; changes in worldwide oil and gas supply and demand; rig availability and supply and demand for high-specification drillships and other drilling rigs competing with our fleet; costs related to stacking of rigs; our ability to enter into and negotiate favorable terms for new drilling contracts or extensions; possible cancellation, renegotiation, termination or suspension of drilling contracts as a result of market changes or other reasons; our substantial level of indebtedness; our ability to obtain waivers or amendments to our maximum leverage ratio covenant at the end of the third quarter of 2017 if necessary, or with respect to other potential future debt covenant defaults; our ability to continue as a going concern and any potential bankruptcy proceeding; our ability to repay debt and adequacy of and access to sources of liquidity; and the other risk factors described in our filings with the SEC, including our Annual Report on Form 20-F and Current Reports on Form 6-K. These documents are available through our website at www.pacificdrilling.com or through the SEC’s Electronic Data and Analysis Retrieval System at www.sec.gov.
 
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Contact:	Johannes (John) P. Boots	 	
 	Pacific Drilling SA	 	
 	+352 26 84 57 81	 	
 	 	 	
 	Investor@pacificdrilling.com	 	

 

PACIFIC DRILLING S.A. AND SUBSIDIARIES 
 
Condensed Consolidated Statements of Operations
(in thousands, except per share information) (unaudited)

 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	
 	    	March 31, 	    	December 31, 	    	March 31, 	
 	    	2017	    	2016	    	2016	
Revenues	 	 	 	 	 	 	 	 	 	
Contract drilling	 	$	105,509	    	$	177,957	    	$	205,378	
Costs and expenses	 	 	 	 	 	 	 	 	 	
Operating expenses	 	 	(60,448)	 	 	(66,547)	 	 	(78,973)	
General and administrative expenses	 	 	(22,461)	 	 	(18,908)	 	 	(15,126)	
Depreciation expense	 	 	(69,631)	 	 	(69,881)	 	 	(68,076)	
 	 	 	(152,540)	 	 	(155,336)	 	 	(162,175)	
Operating income (loss)	 	 	(47,031)	 	 	22,621	 	 	43,203	
Other income (expense)	 	 	 	 	 	 	 	 	 	
Interest expense	 	 	(50,011)	 	 	(51,547)	 	 	(45,493)	
Other income (expense)	 	 	(729)	 	 	419	 	 	1,632	
Loss before income taxes	 	 	(97,771)	 	 	(28,507)	 	 	(658)	
Income tax expense	 	 	(2,076)	 	 	(14,529)	 	 	(1,853)	
Net loss	 	$	(99,847)	 	$	(43,036)	 	$	(2,511)	
Loss per common share, basic	 	$	(4.69)	 	$	(2.03)	 	$	(0.12)	
Weighted average number of common shares, basic	 	 	21,273	 	 	21,184	 	 	21,121	
Loss per common share, diluted	 	$	(4.69)	 	$	(2.03)	 	$	(0.12)	
Weighted average number of common shares, diluted	 	 	21,273	 	 	21,184	 	 	21,121	

PACIFIC DRILLING S.A. AND SUBSIDIARIES 
 
Condensed Consolidated Balance Sheets
(in thousands, except par value) (unaudited)

 

 	 	March 31, 	 	December 31, 	 	
 	    	2017	    	2016	 	
Assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	498,890	 	$	585,980	 	
Restricted cash	 	 	8,505	 	 	40,188	 	
Accounts receivable	 	 	40,411	 	 	94,622	 	
Materials and supplies	 	 	94,482	 	 	95,679	 	
Deferred costs, current	 	 	10,183	 	 	10,454	 	
Prepaid expenses and other current assets	 	 	8,505	 	 	13,892	 	
Total current assets	 	 	660,976	 	 	840,815	 	
Property and equipment, net	 	 	4,848,409	 	 	4,909,873	 	
Long-term receivable	 	 	202,575	 	 	202,575	 	
Other assets	 	 	46,942	 	 	44,944	 	
Total assets	 	$	5,758,902	 	$	5,998,207	 	
 	 	 	 	 	 	 	 	
Liabilities and shareholders’ equity:	 	 	 	 	 	 	 	
Accounts payable	 	$	20,671	 	$	17,870	 	
Accrued expenses	 	 	37,020	 	 	45,881	 	
Long-term debt, current	 	 	467,802	 	 	496,790	 	
Accrued interest	 	 	33,059	 	 	14,164	 	
Deferred revenue, current	 	 	24,327	 	 	45,755	 	
Total current liabilities	 	 	582,879	 	 	620,460	 	
Long-term debt, net of current maturities	 	 	2,547,888	 	 	2,648,659	 	
Deferred revenue	 	 	27,430	 	 	32,233	 	
Other long-term liabilities	 	 	30,473	 	 	30,655	 	
Total long-term liabilities	 	 	2,605,791	 	 	2,711,547	 	
Shareholders’ equity:	 	 	 	 	 	 	 	
Common shares, $0.01 par value per share, 5,000,000 shares authorized, 22,551 shares issued and 21,284 and 21,184 shares outstanding as of March 31, 2017 and December 31, 2016, respectively	 	 	213	 	 	212	 	
Additional paid-in capital	 	 	2,362,458	 	 	2,360,398	 	
Accumulated other comprehensive loss	 	 	(17,375)	 	 	(19,193)	 	
Retained earnings	 	 	224,936	 	 	324,783	 	
Total shareholders’ equity	 	 	2,570,232	 	 	2,666,200	 	
Total liabilities and shareholders’ equity	 	$	5,758,902	 	$	5,998,207	 	

 

PACIFIC DRILLING S. A. AND SUBSIDIARIES 
 
Condensed Consolidated Statements of Cash Flows
(in thousands) (unaudited)

 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	
 	 	March 31, 	 	December 31, 	 	March 31, 	
 	 	2017	 	2016	 	2016	
 	    	 	 	    	 	 	    	 	 	
Cash flow from operating activities:	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(99,847)	 	$	(43,036)	 	$	(2,511)	
Adjustments to reconcile net loss to net cash provided by operating activities:	 	 	 	 	 	 	 	 	 	
Depreciation expense	 	 	69,631	 	 	69,881	 	 	68,076	
Amortization of deferred revenue	 	 	(31,079)	 	 	(29,413)	 	 	(12,658)	
Amortization of deferred costs	 	 	3,306	 	 	4,057	 	 	2,835	
Amortization of deferred financing costs	 	 	8,091	 	 	7,858	 	 	3,625	
Amortization of debt discount	 	 	305	 	 	208	 	 	323	
Deferred income taxes	 	 	908	 	 	12,693	 	 	1,715	
Share-based compensation expense	 	 	2,215	 	 	1,766	 	 	2,164	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	54,211	 	 	19,685	 	 	30,591	
Materials and supplies	 	 	1,197	 	 	1,588	 	 	2,010	
Prepaid expenses and other assets	 	 	(1,495)	 	 	(16,720)	 	 	(7,055)	
Accounts payable and accrued expenses	 	 	16,421	 	 	(23,013)	 	 	(2,412)	
Deferred revenue	 	 	4,848	 	 	35,175	 	 	 —	
Net cash provided by operating activities	 	 	28,712	 	 	40,729	 	 	86,703	
Cash flow from investing activities:	 	 	 	 	 	 	 	 	 	
Capital expenditures	 	 	(10,127)	 	 	(9,819)	 	 	(28,588)	
Net cash used in investing activities	 	 	(10,127)	 	 	(9,819)	 	 	(28,588)	
Cash flow from financing activities:	 	 	 	 	 	 	 	 	 	
Net payments from shares issued under share-based compensation plan	 	 	(154)	 	 	 —	 	 	 —	
Proceeds from long-term debt	 	 	 —	 	 	215,000	 	 	235,000	
Payments on long-term debt	 	 	(134,540)	 	 	(41,652)	 	 	(1,875)	
Payments for financing costs	 	 	(2,664)	 	 	(23,408)	 	 	 —	
Net cash provided by (used in) financing activities	 	 	(137,358)	 	 	149,940	 	 	233,125	
Net increase (decrease) in cash and cash equivalents	 	 	(118,773)	 	 	180,850	 	 	291,240	
Cash, cash equivalents and restricted cash, beginning of period	 	 	626,168	 	 	445,318	 	 	116,033	
Cash, cash equivalents and restricted cash, end of period	 	$	507,395	 	$	626,168	 	$	407,273	

 

EBITDA Reconciliation 
 
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered an alternative to net income, operating income, cash flow from operations or any other measure of financial performance presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and our calculation of EBITDA may not be comparable to that reported by other companies. EBITDA is included herein because it is used by management to measure the company's operations. Management believes that EBITDA presents useful information to investors regarding the company's operating performance.
 
PACIFIC DRILLING S.A. AND SUBSIDIARIES
 
Supplementary Data—Reconciliation of Net Loss to Non-GAAP EBITDA
(in thousands) (unaudited)

 	 	Three Months Ended	
 	 	March 31, 	 	December 31, 	 	March 31, 	
 	 	2017	 	2016	 	2016	
 	    	 	 	    	 	 	    	 	 	
Net loss	 	$	(99,847)	 	$	(43,036)	 	$	(2,511)	
Add:	 	 	 	 	 	 	 	 	 	
Interest expense	 	 	50,011	 	 	51,547	 	 	45,493	
Depreciation expense	 	 	69,631	 	 	69,881	 	 	68,076	
Income tax expense	 	 	2,076	 	 	14,529	 	 	1,853	
EBITDA	 	$	21,871	 	$	92,921	 	$	112,911	

 

Corporate Overhead Expenses Reconciliation 
 
Corporate overhead expenses is a non-GAAP financial measure defined as general and administrative expenses less certain unusual legal expenses related to our arbitration proceeding and patent litigation, as well as legal and financial advisory expenses related to our on-going debt restructuring efforts. We included corporate overhead herein because it is used by management to measure the company's ongoing corporate overhead. Management believes that ongoing corporate overhead expenses present useful information to investors regarding the financial impact of company's cost savings measures and optimization of overhead support structure during the periods presented below. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
 
PACIFIC DRILLING S.A. AND SUBSIDIARIES
 
Supplementary Data—Reconciliation of General and Administrative Expenses to Non-GAAP Corporate Overhead Expenses
(in thousands) (unaudited)

 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	
 	 	March 31, 	 	December 31, 	 	March 31, 	
 	 	2017	 	2016	 	2016	
General and administrative expenses	    	$	22,461	    	$	18,908	    	$	15,126	
Subtract:	 	 	 	 	 	 	 	 	 	
Legal and advisory expenses	 	 	(6,067)	 	 	(7,103)	 	 	(2,790)	
Corporate overhead expenses	 	$	16,394	 	$	11,805	 	$	12,336	

 

3

 
Exhibit 99.  2
 
	FLEET STATUS REPORT	
	NYSE: PACD	
 	As of May 4, 2017	
 	Updates noted in bold	

 	 	 	 	 	 	 	 	 	 	 	 	Contract	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Average Contract	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Contractual	 	Backlog Revenue	 	Availability/	
 	 	 	 	Water Depth	 	Drilling Depth	 	 	 	 	 	Start/Expected	 	 	 	Dayrate	 	Per Day	 	Expected	
Rig Name	 	Delivery	 	(ft)	 	(ft)	 	Customer	 	Location	 	Start	 	Term	 	(US$000's)	 	(US$000's)	 	Availability	
Pacific Bora	    	2010 	    	10,000 	    	37,500 	    	FASL	    	Nigeria	    	9-Feb-2017	    	(1)	    	195	    	195	    	(1)	
 	 	 	 	 	 	 	 	Erin	    	Nigeria	    	15-July-2017	    	(2)	    	195	    	195	    	(2)	
Pacific Scirocco	 	2011 	 	12,000 	 	40,000 	 	Hyperdynamics	 	In
Transit	 	30-May-2017	 	(3)	 	225	 	225	 	(3)	
Pacific Mistral	 	2011 	 	12,000 	 	37,500 	 	—	 	Aruba	 	—	 	—	 	—	 	—	 	Immediate	
Pacific Santa Ana	 	2011 	 	12,000 	 	40,000 	 	Chevron	 	USGoM	 	21-Mar-2012	 	4 years + 316 days	 	481	 	—	 	31-Jan-2017	
 	 	 	 	 	 	 	 	—	 	USGoM	 	—	 	—	 	—	 	—	 	Immediate	
Pacific Khamsin	 	2013 	 	12,000 	 	40,000 	 	—	 	Cyprus	 	—	 	—	 	—	 	—	 	Immediate	
Pacific Sharav	 	2014 	 	12,000 	 	40,000 	 	Chevron	 	USGoM	 	27-Aug-2014	 	5 years	 	551	 	605	 	Sep-19	
Pacific Meltem	 	2014 	 	12,000 	 	40,000 	 	—	 	Aruba	 	—	 	—	 	—	 	—	 	Immediate	
 
(1) Folawiyo AJE Services Limited (“FASL”): two firm wells with one option well
(2) Erin Energy Corporation (“Erin”): one firm well with two option wells
(3)   The Pacific Scirocco  is in Côte d'Ivoire preparing for its contract with Hyperdynamics Corporation (“Hyperdynamics”) to operate in the Republic of Guinea for one firm well with three option wells.

 

 	 	Historical Actual	
Period	    	2Q2016	    	3Q2016	    	4Q2016	    	1Q2017	    	2Q2016 – 1Q2017 Average	
Operating Fleet Average Revenue Efficiency	 	99.0%	 	97.0%	 	99.2%	 	   98.0%	 	98.3%	

 
Page 1 of 2

 

	FLEET STATUS REPORT	
	NYSE: PACD	
 	As of May 4, 2017	
DEFINITIONS & DISCLAIMERS
Dayrate Definition: The dayrates reflected in this Fleet Status Report are the operating dayrates charged to customers, which may include estimated contractual adjustments for changes in operating costs and/or reimbursable cost adjustments for ongoing expenses such as crew, catering, insurance and taxes. The dayrates, however, do not include certain types of non-recurring revenues such as lump sum mobilization payments, revenues earned during mobilizations, revenues associated with contract preparation and other non-recurring reimbursable items such as mobilizations and capital enhancements. Routine and non-routine downtime may reduce the actual revenues recognized during the contract term.
Backlog Definition: Includes firm commitments only, which are represented by signed drilling contracts. We calculate our contract backlog by multiplying the contractual dayrate by the number of days committed under the contracts (excluding options to extend), assuming full utilization, and also include mobilization fees, upgrade reimbursements and other revenue sources, such as the standby rate during upgrades, as stipulated in the contract.
Revenue Efficiency Definition: Actual contractual dayrate revenue (excludes mobilization fees, upgrade reimbursements and other revenue sources) divided by the maximum amount of total contractual dayrate revenue that could have been earned during such period.
Forward Looking Statements: Certain statements and information contained in this Fleet Status Report constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are generally identifiable by the use of words such as “believe,” “estimate,” “expect,” “forecast,” “our ability to,” “plan,” “potential,” “projected,” “target,”  “would,” or other similar words, which are generally not historical in nature. The forward-looking statements speak only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.  Our forward-looking statements express our current expectations or forecasts of possible future results or events, including expectations for durations of contracts, payments to be made under terminated contracts, contract backlog, revenues and operating results, operating revenue efficiency and expected availability of vessels.
Although we believe that the assumptions and expectations reflected in our forward-looking statements are reasonable and made in good faith, these statements are not guarantees and actual future results may differ materially due to a variety of factors.  These statements are subject to a number of risks and uncertainties, many of which are beyond our control.
Important factors that could cause actual results to differ materially from our expectations include: the global oil and gas market and its impact on demand for our services; the offshore drilling market, including reduced capital expenditures by our clients; changes in worldwide oil and gas supply and demand; rig availability and supply and demand for high-specification drillships and other drilling rigs competing with our fleet; costs related to stacking of rigs; our ability to enter into and negotiate favorable terms for new drilling contracts or extensions; possible cancellation, renegotiation, termination or suspension of drilling contracts as a result of market changes or other reasons; our substantial level of indebtedness; our ability to obtain waivers or amendments to our maximum leverage ratio covenant at the end of the third quarter of 2017 if necessary, or with respect to other potential future debt covenant defaults; our ability to continue as a going concern and any potential bankruptcy proceeding; our ability to repay debt and adequacy of and access to sources of liquidity; and the other risk factors described in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 20-F and Current Reports on Form 6-K.  These documents are available through our website at www.pacificdrilling.com or through the SEC’s website at www.sec.gov.

 
Page 2 of 2