Seadrill net income heads for the rock

Seadrill net income heads for the rock

Offshore driller Seadrill reported a drop in income and revenue for the second quarter of 2016.

The Oslo-listed company’s revenue fell to $868 million, a drop of around 24 percent when compared to the second quarter of 2015, when the company’s revenue was around $1.15 billion.

Revenue was hit by down primarily due to the West Castor and West Prospero rig contracts ending and dayrate reductions on a number of units, Seadrill said.

Net income was $276 million, down from $423 million achieved in the second quarter of last year.

Per Wullf, CEO and President of Seadrill Management Ltd., said: “There continues to be a significant supply overhang and the market conditions remain challenging, however, there is some volume returning to the spot market, although primarily for short-term work.”

Seadrill  said that although scrapping and stacking activity is addressing some of the overhang, it is still unclear as to the timeframe over which rates will improve materially. A better indication of demand in 2017 may emerge from the release of annual budgets later in the year, the company added.

The driller doesn’t expect its financials will improve in the third quarter, as eight of its drilling rigs are coming off contract, plus three will have a lower dayrate.

Offshore Energy Today

Related News:Seadrill gets Termination of Rig Contract

Offshore drilling contractor Seadrill has received another notice of termination for convenience from the current operator related to the contract for the West Hercules semi-sub rig.

According to Seadrill, the 2008-built West Hercules was originally contracted for drilling in Norway with North Atlantic Drilling who took over management of the rig in 2012.

On contract with Statoil since January 31, 2013, the rig has carried out an exploration campaign offshore Newfoundland in Canada for the past 18 months. The contract for West Hercules was originally to expire on January 31, 2017.

According to the original plan, the Aasta Hansteen licence was to take over the rig in the second quarter of 2016 for a drilling campaign to be started around July 1, 2016.

 

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