Diamond Offshore profit falls as rig demand softens

Joseph Keefe
Thursday, April 24, 2014

Diamond Offshore Drilling Inc, one of the world's top five offshore rig contractors, reported a 17 percent drop in quarterly profit as demand fell for rigs used in deep water drilling.

Contract drillers face a tough year as vessels ordered during boom times are delivered just as energy companies are tightening spending on offshore exploration.

Diamond Offshore, whose competitors include Ensco Plc , Transocean Ltd and Helmerich & Payne Inc , has two rigs due for delivery in 2014 but has yet to land contracts for them.

While the fall in rig demand and utilization is likely to affect the entire sector, analysts expect Diamond Offshore to fare worse than rivals, given the age of its fleet.

Diamond Offshore, controlled by Loews Corp - a hotel, energy and financial services conglomerate - has 45 offshore drilling rigs, whose average age is about 25.7 years.

A rig that has been in service for 25 years or more is considered old, said Jefferies & Co analyst Brad Handler.

Analysts expect only a modest recovery in demand in the second half of the year, with rig utilization staying below 2013 levels.

The utilization rate for Diamond Offshore's deepwater rigs fell to 64 percent in the March quarter from 94 percent a year earlier.

The company said it would pay a special quarterly cash dividend of 75 cents per share and a regular quarterly cash dividend of 13 cents per share.

Diamond Offshore's net profit fell to $145.8 million, or $1.05 per share, in the first quarter ended March 31, from $176 million, or $1.27 per share, a year earlier.

Revenue fell about 3 percent to $709.7 million.

Diamond Offshore shares closed at $48.53 on the New York Stock Exchange on Wednesday. They have fallen 30 percent in the last nine months.


Reporting By Shubhankar Chakravorty in Bangalore

Maritime Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

DNV GL Targets Safer Approach to Subsea Lifting

The completion of a joint industry project (JIP) to improve existing standards and regulations around subsea lifting operations has resulted in a new recommended practice (RP).

Polarcus Awarded 3D Project Off West Africa

Polarcus Limited has signed a letter of intent with Perenco Oil & Gas Gabon S.A. for a 3D marine seismic acquisition project offshore West Africa.   The project,

Boskalis, VolkerWessels Win Offshore Wind Farm Work

Royal Boskalis Westminster N.V., in partnership with Volker Stevin International (VolkerWessels), has been awarded a contract by Iberdrola Renewables Offshore Deutschland

Finance

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

US Plans to Shut Royalty Loophole on Coal Exports

U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia according to reforms proposed by the Interior Department on Friday.

Hapag-Lloyd Completes CSAV Merger Capital Increase

Hapag-Lloyd completed the planned capital increase of EUR 370 million (approximately $452.5 million) as part of the business combination with the Chilean shipping

Energy

Liquefaction Terminals to Dominate LNG Capital Expenditure

Capital expenditure (Capex) on global LNG facilities is expected to total $259 billion (bn) over the period 2015-2019, with investments expected to be 88% larger

Polarcus Awarded 3D Project Off West Africa

Polarcus Limited has signed a letter of intent with Perenco Oil & Gas Gabon S.A. for a 3D marine seismic acquisition project offshore West Africa.   The project,

EGAS Tenders for as many as 48 LNG Cargoes

Egypt's state-owned gas company EGAS has tendered to buy at least 48 cargoes of liquefied natural gas (LNG) for delivery in 2015/16, three traders said. A senior

Offshore Energy

DNV GL Targets Safer Approach to Subsea Lifting

The completion of a joint industry project (JIP) to improve existing standards and regulations around subsea lifting operations has resulted in a new recommended practice (RP).

Polarcus Awarded 3D Project Off West Africa

Polarcus Limited has signed a letter of intent with Perenco Oil & Gas Gabon S.A. for a 3D marine seismic acquisition project offshore West Africa.   The project,

Boskalis, VolkerWessels Win Offshore Wind Farm Work

Royal Boskalis Westminster N.V., in partnership with Volker Stevin International (VolkerWessels), has been awarded a contract by Iberdrola Renewables Offshore Deutschland

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Pod Propulsion Salvage Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2347 sec (4 req/sec)