Diamond Offshore: OGX Owes Us $36 Million

Diamond Offshore OGX Owes Us $36 Million

Diamond Offshore Drilling Inc, a Houston based drilling contractor, is having difficulties with collecting cash from Brazilian oil company OGX.

According to a drilling report issued by Diamond Offshore last week, the company has informed OGX that it is “delinquent in its payment obligations under the Ocean Quest contract and unless cured, we will have the right to terminate this contract.”

The drilling contractor added that it was looking at other contracting opportunities to substitute for OGX if the contract is terminated. Also, the contract Diamond has with OGX for the Ocean Star rig has been sublet to Queiroz Galvão for the duration of the existing contract with OGX. The contract is expected to expire in February 2014.

“OGX owed us a receivable balance of $22.7 million at June 30, 2013 and, as previously disclosed, our estimated revenues from OGX for 3Q 2013 are approximately $36 million, all of which is currently unpaid,” Diamond Offshore informed.

OGX, the debt-stricken oil company, owned by Eike Batista, is going through some tough times. Last month, the company reported a massive quarterly net loss of R$4.7 billion (around USD 2 billion).

The results were impacted by expenses of R$3.6 billion (around USD 1.54 billion) related to the impairment of the investments carried out in Tubarão Azul, Tubarão Tigre, Tubarão Gato and Tubarão Areia fields as it was concluded that their development would not be economically viable. The company then, consequently, called off the construction of FPSO OSX-4 and FPSO OSX-5, as well as WHP-1, WHP-3 and WHP-4 by OSX,  resulting in a cash disbursement of approximately US$449 million in compensation to OSX.

Last Thursday, the board of OGX fired Roberto Bernardes Monteiro, its Chief Financial Officer and Investor Relations Officer. Both positions are now vacant until the election of a new director. The new director will be decided on at a board of directors meeting. The date for the meeting has not been set yet.

 

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Offshore Energy Today Staff, September 23, 2013

 

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