Offshore drilling contractor Rowan Companies returned to profit in the third quarter of 2016 but saw a drop in revenues due to idle and rigs operating with lower dayrates as well as lower utilization.
The driller on Tuesday posted a net income of $5.5 million, compared to a net loss of $239.4 million in the third quarter of 2015. Net income for the current quarter included a $34.3 million (after tax) non-cash asset impairment charge and a $1.4 million (after tax) credit from a litigation-related matter.
The net loss for the prior-year quarter included a $273.8 million (after tax) non-cash asset impairment charge and a $75.3 million income tax charge related to a valuation allowance on the company’s net U.S. deferred tax assets, and a $1.7 million (after tax) charge related to a legal settlement.
Rowan’s revenues were $379.4 million in the third quarter of 2016, a decrease of 30% and revenues of $545.4 million in the prior-year quarter driven by a 39% decline in the Deepwater segment and a 25% decline in the Jack-up segment.
The Deepwater decline resulted from Rowan Relentless being idle following early termination from Freeport-McMoRan in May and Rowan Resolute operating at a reduced day rate due to the blend and extend amendment to its contract, partially offset by the strong performance of the Rowan Reliance, which experienced lower levels of downtime in the current quarter. Jack-up revenues were impacted by lower utilization and lower dayrates.
The driller’s total rig utilization during the third quarter of 2016 dropped to 69% from 82% in the prior-year quarter. Utilization of deepwater rigs decreased by 21% in 3Q 2016 totaling 75% while the utilization of jack-up rigs dropped by 12% amounting to 68% in the third quarter of 2016.
Offshore Energy Today Staff