UK driller Awilco Drilling sank to a loss in the fourth quarter 2017 dragged down by an impairment charge related to the erosion of the contract backlog and continued downturn in the offshore drilling market.
Awilco Drilling on Thursday reported a loss for the fourth quarter 2017 of $23.8 million compared to a profit of $14.9 million in the prior-year quarter.
Revenues earned in the fourth quarter 2017 totaled $33.9 million compared to $35.1 million in the same period of 2016.
In the fourth quarter, Awilco Drilling incurred an impairment charge of $45 million, due to the erosion of the contract backlog and the continued downturn in both the UKCS and global drilling markets.
In 4Q 2017, the WilPhoenix was in continued operations for Apache North Sea at the Callater and Titan locations before moving to the Val D’Isere location where it remained through the end of the quarter.
Revenue efficiency for the quarter was 95.2% and contract utilization was 100%. At the end of December 2017, WilPhoenix had a total remaining contract backlog of approximately $41 million.
During the quarter, the company’s only other rig, the WilHunter, was cold stacked in Invergordon.
Awilco’s current firm contract backlog is $25 million, and WilPhoenix is committed until at least November 2019.
Awilco said that, while contract opportunities over the winter of 2018 into 2019 remain limited, a large number of inquiries in the quarter has matured into strong demand over the summer of 2018, with full utilization of the UK marketed fleet forecast.
According to the company, some operators will be forced to delay drilling plans and it remains to be seen if that will lead to higher levels of activity in the winter periods to come as the market recovery continues. Awilco also stated that overall outlook continues to improve.
In related news, Awilco announced that following revisions to the project schedule the letter of award from Alpha Petroleum Resources did not result in an agreed contract for WilPhoenix. At the same time, Awilco Drilling announced that it has signed a letter of intent with an undisclosed operator for the provision of WilPhoenix.
Offshore Energy Today Staff