North Atlantic Drilling revenues halved

February 25, 2016

North Atlantic Drilling (NADL), a provider of harsh environment drilling services formed as a subsidiary of Seadrill, has tightened its quarterly loss, but halved the revenues.

NADL on Thursday reported a drop in the company’s total operating revenues for the quarter to $150.4 million, compared to $291.2 million in 4Q 2014.

The offshore drilling contractor on Thursday also posted a quarterly net loss attributable to shareholders of $116.9 million, versus $480.1 million in 4Q 2014.

Excluding the loss on disposal recognized on reclassification of the West Rigel to an asset held for sale, the fourth quarter 2015 net loss was $30.9 million.

To remind, North Atlantic Drilling signed an amendment with Jurong Shipyard for the delivery of the semi-submersible drilling unit, the West Rigel.

During the fourth quarter, North Atlantic Drilling had four offshore drilling rigs in operation offshore Norway, one rig idle in the UK sector of the North Sea, and two idle rigs in Norway: the West Navigator and the West Venture.

The West Phoenix is currently idle in the UK, but being paid a portion of the total contract revenue until it resumes its operations with Total E&P UK Limited, starting mid-March 2016, through the end of August 2016.

Currently, the company’s revenue backlog is $0.7 billion.

Further scrapping expected

Overall marketed utilization in Norway and the UK is at approximately 70%, and, according to the offshore driller, it is likely that this will trend downwards for the remainder of the year.

“We continue to expect further scrapping of units as the significant investment to maintain the classing outweighs potential returns in the current market,” NADL said in the report.

The company’s longer term outlook remains that a rebalancing in the markets will occur in the next couple years, but timing and the extent of a potential recovery remains uncertain.

NADL says it is evaluating refinancing alternatives in light of industry and capital market conditions, and aims to communicate refinancing plans during the first half of this year.

Offshore Energy Today Staff