Amid positive Q3 results, Houston-based Diamond Offshore is sending one of its vessels to the scrap yard after Brazil’s Petroleo Brasileiro (Petrobras) cut contracts short for two of its vessels, resulting in an extension for another contract.
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The Ocean Clipper. Image from Diamond. |
Petrobras ended its contract for both the Ocean Alliance semisubmersible and Ocean Clipper drillship on 30 October, which will represent a US$91 million loss to Diamond’s revenue backlog. Once returning from Brazil, the Ocean Alliance will be cold-stacked, and the Ocean Clipper will be retired and scrapped.
In return, Diamond Offshore and Petrobras entered into a deal to add on 875 days in the Ocean Courage semisubmersible contract. According to Diamond, the additional term will be at a rate of $380,000 per day, representing revenue backlog of $333 million, and will extend the contract into mid-2020.
One year ago, Diamond Offshore announced its plans to retire and scrap six of its mid-water semisubmersible rigs including the Ocean Epoch, Ocean New Era, Ocean Whittington, Ocean Concord, Ocean Yatzy, and Ocean Winner.
The company’s Ocean Guardian semisubmersible was awarded a one-year contract in the UK North Sea beginning in March 2016 at a rate of $220,000 per day.
As for its Q3 2015 results, the company reported a major increase of nearly 157% in its net income of $136 million, from $53 million in Q3 2014.
Revenue came in at $610 million for the period, representing a 17% drop from $738 million in Q3 2014.
"I am pleased with our solid third quarter results, which demonstrate Diamond Offshore's ability to execute on managing our costs and controlling downtime," Marc Edwards, Diamond president and CEO said. "During the quarter, our three newbuild drillships delivered operational efficiency of 99.3%, which directly benefits our topline and improves project economics for our clients."
Diamond Offshore has a fleet of 33 offshore drilling rigs, including one rig under construction. Its fleet consists of 23 semisubmersibles, one of which is under construction, four dynamically positioned drillships, and six jackups.
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