Drilling contractor Paragon Offshore posted a net loss for the second quarter of 2016 compared to a profit in the year-ago quarter amid a sharp drop in revenues.
Paragon Offshore reported the second quarter 2016 net loss of $25.1 million, as compared to second quarter 2015 net income of $47.3 million.
The company’s total revenues for the second quarter of 2016 were $184.9 million, compared to $393.24 million in the corresponding period of 2015.
Randall D. Stilley, President and Chief Executive Officer, said: “Utilization of the fleet declined and we responded quickly by stacking idle assets and lowering our contract drilling services costs by 19 percent compared to the first quarter of 2016. We also kept a tight control over capital expenditures and increased our cash balance to approximately $890 million, outperforming our expectations.”
Paragon reported that utilization for its marketed rig fleet, which excludes available days related to rigs that were stacked and not marketed during the quarter, declined to 38 percent for the second quarter of 2016 compared to 53 percent for the first quarter of 2016.
Paragon’s total contract backlog at June 30, 2016, was approximately $472 million compared to $806 million at March 31, 2016.
The decrease in marketed utilization in the second quarter of 2016 reflects the reduced number of operating days in the second quarter as both the Paragon MSS1 and Paragon MSS2 semi-sub rigs completed contracts during the quarter.
“We expect continued volatility in commodity prices throughout the remainder of 2016,” Stilley said.