U.S. offshore driller Rowan Companies returned to quarterly profit despite lower revenues helped by the sale of rigs to a joint venture with Saudi Aramco.
For the fourth quarter 2017 Rowan reported a net income of $112 million compared to a net loss of $24.4 million in the fourth quarter of 2016.
The net income for the current quarter included a $151.7 million gain on the sale of assets to ARO Drilling. The net loss for the prior-year quarter included a $33.6 million loss on extinguishment of $463.9 million of debt.
ARO Drilling is a 50/50 joint venture between Rowan and Saudi oil company Saudi Aramco created to own, operate, and manage offshore drilling rigs in Saudi Arabia. Rowan contributed three of its rigs to the JV with plans to add two more at the end of 2018.
ARO Drilling generated revenue and net income of $48.6 million and $1.7 million, respectively, for the period October 17, 2017 to December 31, 2017.
For the fourth quarter 2017 Rowan’s revenues decreased to $296.7 million compared to revenues of $351.8 million in the prior-year quarter.
Tom Burke, President and Chief Executive Officer, commented, “While the market is showing signs of improvement, we remain mindful of the importance of operational integrity and cost focus.”
When it comes to Rowan’s fleet utilization, the deepwater section of the fleet tumbled from 75% in 4Q 2016 to 34% in last year’s fourth quarter. Jack-up fleet utilization went up from 63% to 77%. This means Rowan’s total fleet utilization in 4Q 2017 was 70% compared to 65% in the prior year quarter.
Offshore Energy Today Staff