Awilco Drilling, a UK-based driller operating two drilling rigs, has reported a rise in its third quarter 2015 revenue and profit. However, half of its drilling fleet is currently out of work.
Revenue in the quarter was $90.4 million, up from $74 million in the third quarter a year ago. Worth noting, most of the revenue last year came from rig contracts, while this year, 3Q revenue was split between contract revenue (approximately $38.8 million) and $51 million in “other revenue”, coming from an early release payment for one of its rigs.
The driller, which owns two semi-submersible drilling rigs, the WilPhoenix and the WilHunter, posted a net profit of $57.7 million for the quarter, up from $38.1 million in the corresponding quarter a year ago.
During the quarter, the company’s fleet utilisation dropped to 60%, as Hess oil company on July 20 terminated the contract for Awilco’s WilHunter drilling rig. The rig hasn’t worked since, and it remains hot stacked in Invergordon, Scotland.
Awilco’s second rig, the WilPhoenix, was in continued operations for Apache in the UK North Sea, where it remained through the end of the quarter.
Providing its view on the market outlook the drilling firm said it would be tougher to obtain new work in the upcoming period due to an oversupply in the rig market and the industry downturn.
“The absence of new requirements means that units coming off contract are forced into layup. Very low tendering activity would indicate that the fleet of available units is likely to increase further in 2016,” Awilco said in a statement.
In its presentation, Awilco said that the WilHunter rig will be in warm stack mode until April next year, when the rig is expected to undergo its special periodic survey.
The company said that timing of WilHunter SPS will depend on when sufficient follow-on work is secured, with the cost of SPS estimated at $20 million. Awilco said it would review the warm stack status periodically, and focus on securing new work for the rig.
As for the WilPhoenix, the rig is on a firm contract with Apache until the end of 4Q 2017. Apache also has options to extend the contract for 27 more months. The WilPhoenix is currently not drilling as it is on its way to the yard, to “accommodate customer’s operational preference.” Awilco expects the rig to stay in the yard for 60-70 days.
Offshore Energy Today Staff
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