Maersk Drilling sees positive impact from rig fleet growth

Maersk Drilling has delivered a profit of $168 million in the first quarter of 2015 compared to $116 million in the first quarter last year. 

The company says that the result was positively impacted by fleet growth and continued good operational performance, but partly offset by two rigs being idle.

The underlying profit for the quarter was $195m ($109m) generating a ROIC of 8.5% (8.1%).

“Maersk Drilling continues its strong operational performance, and once again deliver a good result. The result is especially impacted by the many new rigs that were added to our fleet during the last year, all of them have shown good operational performance, since commencing on their contracts,” says Claus V. Hemmingsen, CEO in Maersk Drilling and member of the Executive Board in the Maersk Group.

According to Maersk Drilling, in Q1 tendering activity for offshore drilling rigs remained low, as oil companies continue reducing their exploration & development activities, resulting in lower day rates and lower rig utilization across all segments.

“Due to the current environment, we launched a cost reduction and efficiency enhancement programme last year. So far the programme has delivered a 5% savings on the operating cost level in Q1 2015 compared to Q1 2014. Furthermore, our high forward contract coverage reduces the uncertainties in the short term making us well positioned for the new oil reality,” says Claus V. Hemmingsen.

At the end of Q1 2015, Maersk Drilling’s forward contract coverage was 86% for the rest of 2015, 61% for 2016 and 32% for 2017. The total revenue backlog by the end Q1 2015 amounted to $5.9bn ($7.4bn).

Maersk Drilling took delivery of one ultra-harsh environment jack-up rig and one ultra deepwater drillship in Q1 2015, both with long term contracts. Maersk Drilling has one ultra-harsh environment jack-up rig under construction to be delivered in 2016.

Outlook

Maersk Drilling still expects a higher underlying result for 2015 than in 2014 ($471m) due to more rigs in operation, solid forward contract coverage as well as the initiated cost reduction and efficiency enhancement programme.

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