COPENHAGEN, Denmark – Maersk Drilling says it delivered a profit of $184 million in 3Q 2015. The result was positively impacted by continued strong operational performance, fleet growth, and general cost savings. However, increased idle time negatively affected the results. The result was further affected by an additional gain of $9 million related to the sale of the Venezuelan business in 2014. The underlying profit for the quarter was $172 million.
“We deliver a satisfactory third quarter result given the adverse market conditions. We continue to focus on operational performance and a competitive cost level, which are key factors in order to secure contracts for our rigs,” said Claus V. Hemmingsen, CEO of Maersk Drilling and a member of the executive board in the Maersk Group.
In the third quarter, Maersk Drilling signed two new contracts. Maersk Resilient secured a three-year contract and Mærsk Giant received a contract for 150 days, both for work in the Danish sector of the North Sea.
Furthermore, the company signed four contract extensions. The Mærsk Innovator working in Norway received a 16-month extension, the Heydar Aliyev working in the Caspian Sea in Azerbaijan won a five-year extension, the Maersk Resolve working in the Danish sector of the North Sea received a 250-day extension, and the Maersk Discoverer working offshore Egypt won a three-year extension.
“With the recent signings in the third quarter, we have added $1.1 billion to our backlog, which is very rewarding in this challenging market. The Heydar Aliyev extension alone is worth $523 million. Combined with our strong operational and safety performance, a solid forward contract coverage will enable us to navigate the current market conditions, where 2016 by no means will be easier, which is also reflected in the fact that the contracts signed in the third quarter is at a significantly lower day rate compared to previous contracts.”
At the end of 3Q 2015, the company’s forward contract coverage was 85% for the rest of 2015, 70% for 2016, and 49% for 2017. The total revenue backlog by end 3Q 2015 amounted to $5.8 billion.
Maersk Drilling says it expects a significantly higher underlying result for 2015 than in 2014 ($471 million) due to more rigs in operation, high forward contract coverage as well as impact from the initiated cost reduction and efficiency enhancement program, which in 3Q 2015 delivered a saving of more than 10% compared to 3Q 2014.
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