Songa Offshore returns to profit, doubles revenues

Songa Offshore, an international midwater drilling contractor, has returned to profit and doubled its revenues in the fourth quarter of 2015 when compared to the same period the year before. 

The drilling contractor came back from a loss of $51 million in the 4Q 2014 to a $34 million profit in the fourth quarter of 2015.

Songa Offshore’s revenues jumped from $79.5 million in the fourth quarter of 2014, to $159 million in the corresponding quarter of 2015.

The increase is due to Songa Trym contract cancellation fee from Statoil of $41.1 million, revenue contribution from Songa Equinox from December 7, and from Songa Dee being out of service for the SPS for a period in the fourth quarter 2014. Songa Trym is now stacked.

During the fourth quarter 2015, the company incurred an impairment charge of $0.6 million related to scrapping of obsolete fleet spare parts.

Cat D rigs

Two of Songa’s Cat D rigs, Songa Equinox and Songa Endurance, are already operating for the Norwegian oil company Statoil offshore Norway, and the company’s third Cat D rig, Songa Encourage, is currently in Las Palmas for fuelling, crew change and installation of the remaining third party equipment.

Songa Encourage, was delivered from DSME on 16 December 2015.

The rig is scheduled to arrive in Norway mid-March 2016. Upon arrival in Norway, the Songa Encourage will carry out the same acceptance tests as Songa Equinox and Songa Endurance, and it is expected to start drilling operation in April 2016.

The construction progress for Songa’s fourth cat D rig, Songa Enabler, as per end of January 2016 was 94.4%. Delivery of Songa Enabler is scheduled late March 2016 and the rig is expected to start drilling operations in the third quarter of 2016.

All four of Songa’s Cat D rigs are contracted to Statoil.

Next two years will be challenging

The North Sea drilling market continues to be very challenging with a limited number of tenders in the NCS and UK markets. According to the company’s 4Q report, Songa Offshore continues to be of the view that 2016 and 2017 will be two challenging years for the industry as visibility is still low and the competition for the few tenders in the market is fierce.

Offshore Energy Today Staff