Ensco swings to loss in first quarter

UK drilling contractor Ensco went from black to red during the first quarter of 2017 as its revenues dropped by 42 percent due to decline in rig utilization and dayrates. 

The driller on Wednesday posted a net loss of $25.7 million, compared to $175.3 million profit in the year-before period.

Revenues were $471 million in first quarter 2017, a 42% drop compared to $814 million a year ago, primarily due to a decline in reported utilization to 58% from 65% in first quarter 2016 as well as previously announced sales of rigs that operated a year ago. The average day rate for the fleet declined to $156,000 in first quarter 2017 from $208,000 in first quarter 2016.

Contract drilling expense declined to $278 million in first quarter 2017 from $364 million a year ago as lower personnel expense and other activity-based costs due to fewer rig operating days more than offset rig reactivation and contract preparation costs.

Ensco’s floater revenues were $285 million in first quarter 2017 compared to $513 million a year ago. This year-to-year decline in revenues was mostly due to fewer rig operating days and a decline in the average day rate to $337,000 from $365,000 a year ago. The sale of Ensco 6003 and Ensco 6004, both of which operated during first quarter 2016, also contributed to lower year-to-year revenues. Reported utilization was 47% compared to 64% a year ago.

Jack-up revenues were $172 million in first quarter 2017 compared to $278 million a year ago, mostly due to a decline in average day rates to $86,000 from $118,000 last year and fewer rig operating days. Reported utilization was 64% compared to 66% in first quarter 2016.

The driller recently won a four-year contract extension for one of its jack-up rigs in the North Sea.

Offshore Energy Today Staff

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Posted on April 27, 2017 with tags , .

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