Diamond Offshore Drilling Swings to Profit on Ultra Deepwater Contracts, $DO up 5%

Deep Sea Driller Diamond Offshore Drilling $DO swung to profit in the second quarter 2017 on Monday buoyed by Ultra-Deepwater contracts. $DO is up 5% on the earnings. 

Deep Sea Driller Diamond Offshore Drilling $DO reported second quarter earnings for 2017 on Monday before the open, swinging to a profit after prior-year quarter’s huge losses. Drilling in the U.S. is operating at two speeds right now, shale drilling has been increasing all year, deep water drilling has been sideways after falling off the cliff with oil for the past three years.

Earnings: Net income was $16 million, or $0.12 per share, compared to a loss of $589.9MM, or $4.30 per share a year ago.  Q2 adjusted earnings per share $0.45, earnings per share $0.12 versus expected $0.24 via Thomson Reuters. Revenues $399.2 million versus $388.7 million expected

Reaction: Diamond Offshore Drilling Inc NYSE: DO Pre-market12.60 +0.60 (+5.00%)

Diamond Offshore made the decision to aggressively scrap or offload it’s older rigs.  Results for Q2 were impacted by impairment charges and related taxes of $46 million or $0.33 per diluted share. This has put it in a more competitive advantage over it’s peers in a very difficult market. 

The increase in revenue was driven by 32% growth in revenue from Ultra-Deepwater operations. However, this was partly weighed down by declines in Deepwater and Mid-Water segments.

In such a background $DO has been cutting costs and increasing efficiency. Maintenance and time management are crucial at this time. 

* As of June 30, 2017, company’s total contracted backlog was $2.9 billion, which represents 22 rig years of work.

About Diamond Offshore

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 24 offshore drilling rigs, consisting of 19 semisubmersibles, four dynamically positioned drillships, and one jack-up.

Diamond Offshore Drilling, Inc. Rig Status Report

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