Diamond Offshore Still Impacted By Deep Water Drilling Fall

Deep Sea Driller Diamond Offshore Drilling reported lower second quarter earnings before the market Monday announcing a bigger loss. Revenue continue to be impacted as day rates for deep water drilling rigs fall. 

Deep Sea Driller Diamond Offshore Drilling reported lower second quarter earnings before the market Monday announcing a bigger loss. Revenue continue to be impacted as day rates for deep water drilling rigs fall.

Diamond Offshore Rig

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 three years ago and has not recovered with the different breakeven points.

Diamond Offshore Drilling Inc. (NYSE: $DO) Missed Earnings Before Open Monday

($0.50) Missed ($0.38) EPS and $268.9 billion Missed $279.63 forecast in revenue 

Earnings

Diamond Offshore Drilling Q2 EPS loss of ($0.50), $0.12 worse than estimate of ($0.38). Revenue was $268.9 million versus the consensus estimate of $279.63 million. 

Diamond Offshore Drilling Inc NYSE: $DO

Market Reaction > Pre-market $19.41 USD +0.31 (+1.62%)

Highlights

  • Diamond Offshore Drilling earnings results declined due to lower revenue given the continuing depressed market conditions, which impacted both rig utilization and average daily revenue.
  • Of the 14 rigs listed in service by Diamond Offshore, five were in the U.S. waters of the Gulf of Mexico and had the highest day rates.
  • Asset impairment charges of $12 million and $23 million (after tax and noncontrolling interests) were recognized in the three months ended June 30, 2018 and 2017.

Outlook

Marc Edwards, the president and CEO of DO said future contracts for its rigs are better than expected in terms of rates.

“We believe this contracting activity positions Diamond Offshore for success during the remainder of this prolonged downturn, and beyond,” he said in a statement.

 

Diamond Offshore Q1 Earnings Recap

Earnings: 

Net income fell to $19.3 million, or 14 cents per share, from $23.5 million, or 17 cents per share, a year earlier. Losses, adjusted for one-time gainsand costs, were 16 cents per share better than Wall Street expectations for a loss of 20 cents per share.Total revenue fell 20.8 percent to $295.5 million, less than forecasts.of $295.9 million.

Diamond Offshore Drilling Inc NYSE: $DO Reaction · April 30, 12:16 PM EDT 18.65 ▼ 0.37 (-1.95%)

Marc Edwards, President and Chief Executive Officer. “Despite the continuing challenges in the offshore drilling market, we were able to secure additional work for the Ocean Apex and the Ocean BlackRhino, and were awarded new work for the Ocean Endeavor. We continue to have strong interest from prospective clients for our industry leading fleet.”

As of March 31, 2018, the Company’s total contracted backlog was $2.2 billion, which represents 19 rig years of work.

Last year Diamond Offshore made the decision to aggressively scrap or offload it’s older rigs.  Impairment charges and related taxes were taken last year. This has put it in a more competitive advantage over it’s peers in a very difficult market.  In such a background $DO has been cutting costs and increasing efficiency. Maintenance and time management are crucial at this time. 

 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.

Source: Diamond Offshore

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