Diamond Offshore swings to loss on rig impairments

Diamond Offshore Drilling, Inc., a Houston-based offshore drilling contractor, today reported a net loss of $256 million, in the first quarter of 2015, compared to net income of $146 million, in the first quarter of 2014. Revenues in the first quarter of 2015 were $620 million, compared to revenues of $709 million in the first quarter of 2014.

Results for the quarter included a non-cash charge of $319 million after tax, or $2.33 per share, associated with the impairment of eight drilling units, three of which are to be retired and scrapped., the company has said.

The units to be retired are the mid-water semisubmersibles Ocean Saratoga, Ocean Worker and Ocean Yorktown, which are all cold stacked in the U.S. Gulf of Mexico. Other rigs included in the impairment group are the mid-water semisubmersibles Ocean Ambassador, Ocean General, Ocean Lexington, Ocean Nomad and the drillship Ocean Clipper.

Diamond Offshore also recognized a charge during the quarter of $4 million after tax, or $0.03 per share, related to restructuring and employee separation-related costs.

“We have continued to implement cost savings measures while maintaining our focus on safe operations and delivering performance for our clients,” said Marc Edwards, President and Chief Executive Officer. “Our first-quarter safety statistics were the best that we have recorded.”

“During the second quarter, our next two newbuild drillships will begin working in the Gulf of Mexico, and the yard will complete our fourth drillship, which will also be headed to the U.S., where all four of drillships will work on term contracts extending into 2019 or beyond,” added Edwards.

 

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