Songa Offshore, an offshore drilling contractor listed on the Oslo exchange, on Friday reported a net profit of $17 million for the second quarter of the year. For comparison, Songa Offshore posted a net loss of $9 million in the second quarter of 2014. Also, the company has forecasted drillers will be facing tough time in the next two years.
The company’s revenue fell to $122 million, down from $151 million a year ago. Songa Offshore explained the drop in revenue as the absence of revenue contribution from Songa Venus and Songa Mercur rigs that were sold in July 2014.
Songa Offshore currently has three rigs, with all three operating for Statoil. The three rigs had an operational efficiency of 100.0% in the second quarter 2015. The average earnings efficiency was 98.6% for the period.
Apart from the rigs in operation, the company will soon expand its fleet with four Cat D drilling rigs, built by Daewoo Shipbuilding Marine Engineering in South Korea. Namely, Songa Equinox and Songa Endurance are expected to start their respective 8-year contracts (plus options) with Statoil in the third quarter of 2015.
Providing its view of the drilling market, Songa Offshore said: “The Brent Crude Oil price is currently trading below USD 50 per barrel after a period in second quarter 2015 where it traded around the USD 60-65 range.
“Visibility in the North Sea drilling market is still low and the competition for the few tenders in the market is fierce. Songa Offshore is of the view that 2016 and 2017 will be two challenging years for the industry.”
Of the three Songa Offshore rigs currently drilling in Norway, Songa Trym will be the first to see its contract expire, at the end of the first quarter of 2016.
Songa Dee will follow in the third quarter of 2016, and Songa Delta at the end of the third quarter. Statoil has options to extend the contracts for all three rigs.
Offshore Energy Today Staff