Seadrill Reports Consolidated Revenues for First Quarter of 2012

Seadrill, one of the largest drilling contractors in the world reported consolidated revenues for the first quarter of 2012 of US$1,050 million as compared to US$1,059 million in the fourth quarter 2011.

The company, that boasts with a versatile fleet of 63 units that comprises drillships, jack-up rigs, semi-submersible rigs and tender rigs reported operating profit for the quarter of US$456 million compared to US$436 million in the preceding quarter.

Net financial items for the quarter showed a gain of US$24 million compared to a loss of US$501 million in the previous quarter. The previous quarter included a US$463 million impairment charge on our 39.9 percent ownership in Archer. While this quarter includes a gain of US$91 million on derivative financial instruments compared to a gain of US$33 million in the previous quarter. US$63 million of the gain is related to the sale of our holdings in Ensco plc. The rest is related to unrealized gains on currency forward contracts, total return swap arrangements and interest rate swaps.

Income taxes for the first quarter were US$41 million unchanged from the fourth quarter. Net income for the quarter was US$439 million or basic earnings per share of US$0.89.

Chief Executive Officer in the Norwegian/Bermudan drilling contractor Alf C Thorkildsen says in a comment, “We are pleased to report another solid quarter for Seadrill reflecting a strong underlying operational performance.

Furthermore, the outlook and fundamentals for the oil and gas industry remain strong. Encouraging exploration successes in established as well as frontier basins are leading to an increasing backlog of appraisal and development drilling projects. These strong fundamentals support the expectation of continued strength in all sectors of the contract drilling industry for the foreseeable future. As a consequence we have ordered six newbuilds in the last three months and the Company now has 18 drilling units under construction. We remain bullish on the outlook for drilling services, in particular related to the demand for high-specification equipment.”

Seadrill, on May 4, ordered a new harsh environment semi-submersible drilling rig from Hyundai Samho Shipyard in South Korea. The company explained the move by the current strong demand for high specification drilling units and Seadrill’s wish to benefit from such market conditions.

With strong oil prices persisting, major energy companies are increasingly reinvesting their earnings in exploration and development of offshore oil and gas basins. Visiongain, a UK-based independent business information provider for the Telecoms, Pharmaceutical, Defence, Energy and Metals industries has calculated that capital expenditure in the Mobile Offshore Drlling Units (MODU) market will total $48.1bn in 2012.

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Offshore Nieuws  Staff, May 14, 2012; Image:  Seadrill