Pacific Drilling’s third quarter profit plummets

Pacific Drilling, an offshore drilling contractor, on Sunday posted a drop in its third quarter 2015 profit versus the one made a year ago, and in the previous quarter of 2015. 

In its 3Q 2015 report, the drilling contractor posted a net income of $41 million in the third quarter 2015, compared to net income of $47.1 million for second quarter 2015, and net income of $48.1 million for third quarter 2014.

CEO Chris Beckett said, “Our fleet delivered yet another strong financial quarter with a record cash flow from operations of $154 million on the back of a strong EBITDA of $148 million from our fleet of five operating and two smart-stacked drillships.

Beckett reminded of Pacific Drilling’s decision to abolish the deal it had with the South Korean shipyard, Samsung Heavy Industries: “On October 29, 2015 we exercised our right to rescind the construction contract for the Pacific Zonda due to Samsung’s failure to timely deliver a vessel that substantially met the criteria required for completion of the vessel in accordance with the construction contract and its specifications. We will be seeking a refund of the installment payments we made of approximately $181 million.”

Beckett continued, “Unfortunately, our strong performance in the third quarter was overshadowed by the tragic loss of a team member on the Pacific Santa Ana on October 20, 2015. Our heartfelt condolences go out to the family of our colleague and those members of our Pacific Drilling family closely associated with him.”

Pacific Drilling’s contract drilling revenue for third-quarter 2015 was $260.2 million, which included $21.7 million of deferred revenue amortization, compared to the third quarter 2014 revenues of $279.64 million. The company has also recorded a drop when compared to second-quarter 2015 and the contract drilling revenue of $273.9 million, which included $21.5 million of deferred revenue amortization.

Contract drilling revenue decreased quarter over quarter as a result of time lost due to required repairs to the Pacific Khamsin blowout preventer during July and August, Pacific Drilling said in its 3Q report.

According to the company, during the three months ended September 30, 2015, Pacific Drilling’s operating fleet achieved average revenue efficiency of 90.8 percent.