UK-based offshore drilling contractor Ensco saw its profit as well as revenues drop during the third quarter of 2016 mainly due to lower rig utilization.
According to its report on Wednesday, the drillers’s profit during the third quarter of 2016 dropped to $85.3 million, compared to $292 million in the prior-year third quarter.
Revenues were $548 million in the third quarter of 2016 compared to $1.012 billion a year ago. The drop in revenues was primarily due to a decline in reported utilization to 53% from 62% last year.
Ensco’s third quarter 2015 revenues included $129 million from early contract terminations. The average day rate for the fleet declined to $184,000 in third quarter 2016 from $232,000 a year ago.
Contract drilling expense declined 31% to $298 million from $434 million last year due to fewer rig operating days and disciplined expense management.
Ensco said has taken steps since mid-year 2016 to reduce the company’s expense base by reducing onshore support personnel and suspending a discretionary compensation plan. In aggregate, these actions are expected to reduce expenses by approximately $50 million on an annualized basis from second quarter 2016 levels.
Offshore Energy Today Staff