Maersk Drilling has posted an increase in profits in 2Q to US$218 million ($117m in 2014) despite three rigs being idle in the period.
Maersk said the result was thanks to strong operational performance, fleet growth, general cost savings and its 2014 Venezuelan business divestment.
“We are very pleased with the result given the adverse market conditions. Our focus on operational performance and cost savings continue to pay off and it enhanced our strong foundation for our future competitiveness. Meanwhile, we continue to improve our safety performance,” says Claus V. Hemmingsen, CEO in Maersk Drilling and member of the Executive Board in the Maersk Group.
At the end of 2Q 2015, Maersk Drilling’s forward contract coverage was 83% for the rest of 2015, 61% for 2016 and 32% for 2017. The total revenue backlog by the end 2Q 2015 amounted to $5.3 billion ($7 billion in the same period last year). In addition, Maersk Drilling has in July and August secured additional contracts adding more than $660 million to the backlog.
“We are proud that we are able to continue to strengthen our backlog in the challenging market,” says Claus V. Hemmingsen.
However, Maersk said it would be reassessing its profit and growth targets. The firm said: "The turbulence in the oil price has had a negative influence in the oil and offshore markets and countries dependent on oil. This has changed the outlook for Maersk Drilling and previously announced profit and growth targets will be replaced by plans adapting to the current environment.
"Maersk Drilling expects a significantly higher underlying result for 2015 than in 2014 ($471 million) due to more rigs in operation, solid forward contract coverage for the rest of the year as well as the initiated cost reduction and efficiency enhancement program, which delivered a saving of 5% excluding positive rate of exchange effects on the operating cost level compared to 2Q 2014."
Image: The Maersk Integrator jackup.
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