Songa Offshore, an Oslo-listed offshore drilling contractor, has returned to profit in the first quarter of 2016.
The company’s profit for the period was $10 million, an improvement from a net loss of 11 million in the first quarter a year ago. Revenue also rose to $137 million, up from 108 million a year ago.
Operating revenue for the first quarter 2016 was $122.6 million, compared to $94.4 million for the first quarter 2015.
The increase is primarily due to the revenue contribution from Songa Equinox and Songa Endurance drilling rigs of $31.7 million and $25.2 million respectively, which were delivered in late 2015. This was partly offset by the absence of revenue contribution from Songa Trym semi-submersible drilling rig of $30.8 million.
Songa Trym was stacked in the quarter and is being marketed for new work. Apart from Songa Trym, all the company’s rigs work for Statoil on the Norwegian Continental Shelf.
Providing its take on the rig market outlook, Songa Offshore said the North Sea drilling market continues to be challenging with a poor number of tenders in the Norway and UK markets. As a result, Songa said, more rigs have come off contract and been stacked during the quarter.
“Visibility is still low and the competition for the few tenders in the market is fierce. Songa Offshore continues to be of the view that 2016 and 2017 will be two challenging years for the industry,” the company said.
Offshore Energy Today Staff