Bermuda’s SeaDrill Bullish On Future
Seadrill’s newbuild semi-tender rig West Jaya was due to start work for BP late this month and another of the Bermuda company’s new harsh environment jackups, West Elara, should begin operations offshore Norway in December, on-line industry journal “Off-Shore” reports today [Nov.30].
The magazine — which covers trends and technology developments for offshore oil and gas operations — said the company has 14 rigs under construction, comprising five ultra-deepwater units, one harsh environment jackup, four premium benign environment jackups, three tender rigs, and one semi-tender rig.
In late December, Seadrill expects to receive the ultra-deepwater semi West Capricorn. However, delivery of another ultra-deepwater semi, West Leo, has been put back until January 2012. The other 12 rigs should be delivered later next year or in early 2013.
Seadrill’s new units and bullish outlook comes despite mixed third quarter results for 2011 which saw its net profits plunge after the firm took a hit from losses on interest rates swap contracts.
Net profit plunged to $58 million dollars in the third quarter from $352 million a year ago and against a consensus market forecast of $347 million, due to a $330 million loss on financial derivatives instruments.
“The market uncertainty has resulted in a significant drop in interest rate levels,” Seadrill’s chief executive Alf Thorkildsen said in a statement. “This has adversely impacted our earnings in the quarter as we have booked an unrealised loss on interest rate swaps that we entered into in order to cap our interest expenses at attractive long-term levels.”
At the operating level, the Bermuda firm — owned by tycoon John Fredriksen, one of the world’s 100 richest men — remains optimistic on the market for offshore rigs, used by energy firms to drill for oil and gas deposits under the seabed.
Seadrill has benefited from boom times in recent months despite global economic uncertainty, with high oil prices sustaining demand.
Its operating profit rose to $480 million dollars in the third quarter from $431 million a year earlier.
The firm said it expects a continuing booming rig market despite the turmoil on financial markets as energy firms continue to search for oil and gas in ever-more remote places.
“The market outlook for offshore drilling remains favourable as contracting activities increase in all market segments,” said the firm, adding that its order book had reached a record $13.5 billion.
Seadrill expected daily rates for ultra-deepwater rigs, which can drill at sea depths below 4,921 feet to pass the $550,000 mark within the next six months.
The company reiterated it was evaluating ways to expand the company further.
Seadrill raised its dividend for the quarter to $0.76 per share, against expectations of $0.74 in the poll, from $0.65 at the same time last year.
“At in time when there is turbulence in the financial markets we are very pleased to deliver one of our best quarterly operating profit ever reflecting solid performance and operation of our rig fleet,” said Mr. Thorkildsen.
