Ocean Rig Records Net Loss in 4Q 2012

Ocean Rig,  an international offshore drilling contractor, recorded a net loss of $71.0 million, or $0.54 basic and diluted loss per share, for the three-month period ended December 31, 2012, as compared to a net income of $36.5 million, or $0.28 basic and diluted earnings per share, for the three-month period ended December 31, 2011.

Adjusted EBITDA was $75.4 million for the fourth quarter of 2012, as compared to $128.8 million for the same period in 2011.

Revenues from drilling contracts decreased by $7.9 million to $229.8 million for the three-month period ended December 31, 2012, as compared to $237.7 million for the same period in 2011.

Rig operating expenses and total depreciation and amortization increased to $173.1 million and $56.5 million, respectively, for the three-month period ended December 31, 2012, from $93.1 million and $54.5 million,  espectively, for the three-month period ended December 31, 2011. Total general and administrative expenses increased to $23.5 million in the third quarter of 2012 from $15.1 million during the comparative period in 2011.

George Economou, Chairman and Chief Executive Officer of the Company commented:
“During the fourth quarter of 2012, our drilling units operated at acceptable levels of efficiency but our results were adversely impacted by the scheduled drydock of the Eirik Raude which was completed in the fourth quarter of 2012. All-in-all, in 2012 we experienced various delays mobilizing to drilling locations and acceptance testing took longer than projected for our long-term contracts in Brazil. In addition, we had several short term contracts that resulted in more frequent mobilization and certain of our rigs travelled long distances between drilling locations. Despite the mobilization delays and the Eirik Raude’s 10 year class survey, we achieved an 89% utilization rate over available drilling days fleet wide and a 91% utilization rate over available drilling days for our four operating drillships.

“Currently, the vast majority of our drilling units are either drilling under, or soon scheduled to commence long-term contracts. Following the completion of certain upgrades to the Leiv Eiriksson in early 2013, we expect all six of our drilling units to be operating efficiently in their respective locations throughout the remainder of 2013. In addition, in 2014 we will enjoy the additional revenue contribution from our three newbuilding drillships scheduled to be delivered in 2013. 3
“We have recently received a letter of award for a three-year contract to drill offshore West Africa for the Ocean Rig Apollo or a similar drillship. Assuming this contract materializes, our total backlog will reach approximately 5.1 billion over three years and will provide Ocean Rig with substantial cash flow visibility and growth.
“On the financing front, we are pleased to have signed definitive documentation for a $1.35 billion credit facility to fund the installments and other expenses due on delivery of our three 2013 newbuildings. The lending syndicate is impressive and consists of DNB Bank, Nordea Bank, Eksportkredit/GIEK, Import-Export Bank of Korea, SEB, Swedbank, ABN AMRO and DVB Bank. We are proud that such institutions continue to place their faith in our Company. We are also seeing early interest from commercial lenders to finance our fourth newbuilding drillship to be delivered in the first quarter of 2015.

“Given strong industry fundamentals, we expect to further increase our already substantial backlog by entering into contracts for our remaining units. We are focused on maintaining the highest level of operating efficiency and containing our costs within the industry’s challenging operating environment.”

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Press Release, March 7, 2013