Drilling giant Transocean swung back into profit in Q1 2016, despite revenues having hemorrhaged compared to Q1 2015.
Rig utilization was 51% in Q1, compared with 60% in the prior quarter, and 79% in the same period last year. Utilization is lowest in the ultra-deepwater floater segment, at 50%, compared with 68% in the same period last year. Deepwater floaters and high-specification jackups are holding up the best with 60% utilization for both in Q1, still down from 85% and 99% respectively in the same period last year.
Low utilization rates have hit the firm's revenues, which were down at US$1.34 billion, compared to $2 billion in the same period last year. Net income was $255 million, compared with a loss of $469 million in the the same period last year.
The firm has cut its general and administrative expenses down from $58 million in Q4 2015 to $43 million, as part of ongoing restructuring efforts. Capital expenditure has also been cut, totaling $368 million, down from $665 million in the prior quarter. The decline was primarily due to reduced spending associated with the company's newbuild program, Transocean said.
"Despite the challenging environment, the Transocean team delivered strong operating performance, and solid financial results, adding over $200 million to our cash balance in the first quarter of 2016," said President and Chief Executive Officer Jeremy Thigpen. "As we work through the second quarter, and the balance of the year, we will continue to prepare ourselves for the eventual industry recovery by taking the necessary steps to both maximize internal efficiencies, and further differentiate Transocean in the eyes of our customers through superior safety and operational performance."
Transocean owns or has partial ownership interests in, and operates a fleet of 60 mobile offshore drilling units consisting of 28 ultra-deepwater floaters, seven harsh-environment semisubmersibles, five deepwater semisubmersibles, 10 midwater semisubmersibles and 10 high-specification jackups. In addition, the company has six ultra-deepwater drillships and five high-specification jackups under construction or under contract to be constructed.
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