Drilling contractor Awilco Drilling posted zero revenues for Q1 this year and a net loss of US18.7 million, thanks to one rig being out of work and another undergoing work.
While the firm has work for one of its two semisubmersible rigs, the prospect for going more work remains "bleak" in the UK North Sea the firm says. What's more, it says the market recovery seems to be pushed even further out in time, thanks to continued cuts in exploration spending.
"The increased number of available rigs is expected to continue through 2016 and potentially beyond," Awilco says in its Q1 results. Increased rig attrition, i.e. units being taken out of the market, would be positive for a future rebalancing, it says. But, there are some glimmers of hope, with the recent oil price increase to around $45/bbl seeing the first signs of higher enquiry and tender activity for 2017 and 2018.
In the short-term, the rig surplus has increased in 2016, Awilco says, with three Transocean rigs cold stacked (Transocean Prospect, Sedco 711, and Sedco 714), three Diamond Offshore rigs cold stacked (Ocean Nomad, Ocean Princess, and Ocean Vanguard), one Dolphin Drilling rig cold stacked (Borgny Dolphin).
More rigs are due to come off contract through the year, including Transocean's Sedco 704 and Sedco 712, Dolphin's Byford Dolphin, Stena's Stena Spey, and Seadrill's West Phoenix.
Others have firm contracts due to end, but with possible extension options, which could be taken up. These are Transocean's Paul B. Loyd, Jr., Diamond Offshore's Ocean Valiant and Ocean Patriot, and Dolphin Drilling's Blackford Dolphin.
Odfjell's Deepsea Stavanger is due to be warmed stacked from the start of August, according to Awilco, which has used data from IHS-Petrodata and its own data.
Awilco has two rigs, the WilHunter, which is currently warm stacked without work, and the WilPhoenix, which has been undergoing a special periodic survey and BOP installation.
Despite the WilHunter having no work, the WilPhoenix is due to resume work for Apache in the North Sea, giving Awilco a US$258 million contract backlog.
The WilPhoenix special periodic survey and BOP installation were completed under budget, at $16 million and $22.5 million respectively.
WilPhoenix starts a contract with Apache this month, up to Q1 2018, with 27 month options.
Timing of the WilHunter special periodic survey will depend on when sufficient follow-on work is secured, says Awilco. The rig is currently warm stacked with downsized crew.
Subscribe
