Pacific Drilling swings to loss in 1Q

Pacific Drilling, a Luxembourg-headquartered offshore drilling contractor, reported a net loss of $2.5 million in the first quarter of 2016, down from a net profit of $51.7 million in the corresponding period of 2015.

Contract revenue for first-quarter 2016 was $205.4 million, which included $12.7 million of deferred revenue amortization, compared to fourth-quarter 2015 contract drilling revenue of $267.6 million, which included $20.4 million of deferred revenue amortization.

Contract drilling revenue decreased in the first-quarter primarily as a result of the Pacific Khamsin drillship being idle during first-quarter 2016.

Pacific Drilling said that during the quarter its operating fleet achieved average revenue efficiency of 97.7 percent, a further improvement from fourth-quarter 2015’s previous record high of 97.3 percent.

However, it’s worth noting that Pacific Drilling had only four of its seven drillships active during the quarter.

The company said its operating expenses for first-quarter 2016 were $79.0 million, compared to $104.9 million for fourth-quarter 2015. The reduction in operating expenses was primarily the result of the Pacific Khamsin being idle during first-quarter 2016.

Capital expenditures for the three months ended March 31, 2016 were $28.6 million and primarily consisted of the purchases of fleet spare equipment committed to in prior years to support our operations.

Direct rig-related daily operating expenses for operating rigs, excluding reimbursable costs, averaged $145,800 per rig in first-quarter 2016, down from an average of $150,300 per operating rig in fourth-quarter 2015. The reduction in direct rig-related daily operating expenses was primarily the result of continued fleet-wide cost saving measures, the company explained.

Direct rig-related daily operating expenses for our three idle rigs averaged $36,500 per rig in first-quarter 2016. This includes the Pacific Khamsin, which transitioned from full operating mode to smart-stacked mode during the first-quarter 2016, Pacific Drilling said.

CFO Paul Reese said: “During first-quarter 2016, we continued to reduce our daily operating expenses and net debt, which is consistent with our objective to strengthen our balance sheet in the current difficult market environment.”

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