Rig impairments drag Paragon Offshore deeper into red

Drilling contractor Paragon Offshore posted a deeper net loss for the fourth quarter 2016 compared to the prior-year fourth quarter due to jack-up rig impairments.

The driller on Friday reported fourth quarter 2016 net loss of $244.4 million, as compared to fourth quarter 2015 net loss of $23.3 million.

According to the company, results for the fourth quarter of 2016 included a $129.9 million non-cash asset impairment charge primarily related to six jack-ups and other capital spares.

Paragon’s total revenues for the fourth quarter of 2016 were $61 million compared to $125.1 million in the third quarter of 2016. In the fourth quarter of 2015, the driller’s revenues amounted to $299.6 million.

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 22 percent for the fourth quarter of 2016 compared to 34 percent for the third quarter of 2016.

Average daily revenues declined 21 percent in the fourth quarter of 2016 to $86,000 per day compared to the previous quarter average of $109,000 per day. Contract drilling services costs declined 16 percent in the fourth quarter of 2016 to $71.3 million compared to $85.1 million in the third quarter of 2016.

Paragon’s total contract backlog at December 31, 2016 was approximately $242 million compared to $365 million at September 30, 2016.

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