Singapore’s Ezion is slashing 2017 capex and delaying delivery of four service rigs to stop the cash outflow amid the tough offshore oil and gas environment.
The company said on Thursday it would reduce its originally planned capital expenditure by approximately $270 million with the indefinite postponement of deliveries of four Service ordered back in 2014.
Ezion said the the decision to „indefinitely postpone“ the service rigs came after a „careful deliberation“ by the group amidst the continued challenges faced by the marine and offshore oil and gas industry to conserve the cash position of the Group, Ezion said.
“The indefinite postponement of the Service Rigs would reduce the significant cash outflows required to take delivery of the service rigs and also the burden of the additional financial liabilities on the balance sheet with the drawing of additional bank loans required for taking delivery of the service rigs,“ Ezion added.
The group’s revenue for the fourth quarter of 2016 decreased by $12.1 million to $72.6 million as compared to the corresponding fourth quarter of 2015.
The company said the revenue fell due to a reduction in charter rates and delays in the completion of the modifications and upgrade of its service rigs due to unexpected technical issues and longer lead time for delivery of certain critical equipment.
The company’s net loss for the quarter deepened. The loss was $66,6 million in 4Q 2016, compared to a loss of $63,5 million in 2015.
Offshore Energy Today Staff