Seadrill Sees Bigger Drilling Market Slowdown

MarineLink.com
Tuesday, February 25, 2014

Reuters - The global oil drilling market will slow by more than expected over the next two years as energy firms save cash for dividends and delay exploration, Seadrill , the world's biggest offshore driller by market capitalisation, said.

Oil companies are struggling with cash outflows, while they also need to spend more just to maintain production levels at their existing assets, where depletion rates are high, Seadrill said on Tuesday.

"Combined with a relatively high dividend payout and increasing development cost to bring new production on stream, oil companies have limited opportunities to fund exploration activities," Seadrill, the crown jewel is shipping tycoon John Fredriksen's business empire, said in a quarterly results statement.

"In this regard, 2014 and 2015 may show slower growth in activity levels than earlier anticipated," it added.

It added that it sees "limited value" in increasing its own dividend further and would preserve funds for buybacks or later dividends.

By 0913 GMT, Seadrill shares were down 6.4 percent, underperforming a 0.3 percent fall in the European oil and gas index.

Seadrill had been on an order spree, adding ultradeep drilling vessels in recent years, but said it would now focus on its existing fleet until it sees oil companies raise spending.

Rates in the ultradeep offshore market, the most lucrative segment, peaked close to $625,000 a day last year and have since fallen to around $575,000 for the so-called 6th generation rigs. Analysts have predicted that those rates will sink further to between $525,000 and $475,000 per day.

"Based on the fact that this pause in spending has not been caused by oil price declines gives us confidence that this is a momentary pause rather than a cyclical downturn," Seadrill said.

It expects its first-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) to be flat or lower compared with the fourth quarter following a number of operational issues with several vessels.

But it expects year-on-year profit growth above 20 percent in subsequent quarters, it added.

For the fourth quarter, the company reported a 27 percent rise in EBITDA to $768 million, just ahead of forecasts for $754 million in a Reuters poll of analysts.

(Reporting by Balazs Koranyi; editing by Gwladys Fouche and Jane Baird)

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

People & Company News

Australian Defence Minister Says Would Not Trust Submarine Firm to Build Canoe

Australia's defence minister has said he would not trust state-owned Australian Submarine Corp (ASC) "to build a canoe", fuelling expectations that most work in

Matson Raises Guam, Micronesia Rates

Matson, Inc., a U.S. carrier in the Pacific, announced today that Matson Navigation Company, Inc. will raise its rates for the company's Guam/Commonwealth of the

Norwegian Buys Ship from Princess Cruises

Norwegian Cruise Line Holdings Ltd. announces fleet expansion for Oceania Cruises in 2016; Sirena to join sister ships Insignia, Regatta and Nautica   Norwegian Cruise Line Holdings Ltd.

Finance

Matson Raises Guam, Micronesia Rates

Matson, Inc., a U.S. carrier in the Pacific, announced today that Matson Navigation Company, Inc. will raise its rates for the company's Guam/Commonwealth of the

Shipbuilding Regulations: Cents and Sensibility

Addressing the Jones Act is just one aspect of an increasingly complicated boatbuilding environment. Stovepiped, poorly conceived regulations is another. The sting of the recession is fading,

Ship Broker Clarkson Looks to Acquire Platou

Top ship broker Clarkson is seeking to acquire Norwegian brokerage and investment bank RS Platou for 281.2 million pounds ($441 million) in a deal that would create

Energy

US House to Hold Hearing on Oil Export Ban

A House of Representatives panel will hold a hearing on Dec. 11 to explore whether a decades-old law that prohibits the export of crude oil makes sense in an era of domestic energy abundance.

Energy’s Promising Future Threatened

Unrealistic Fears and Overstated Risks obscure the benefits of new seismic data. The United States stands poised on the edge of a bright energy future. After decades

Pile Testing for Wikinger Wind Farm Launched

In October 2014 the first phase of the pile testing campaign for the Wikinger offshore wind farm project was launched after the site’s geotechnical investigation on the Baltic Sea had been completed.

News

US House to Hold Hearing on Oil Export Ban

A House of Representatives panel will hold a hearing on Dec. 11 to explore whether a decades-old law that prohibits the export of crude oil makes sense in an era of domestic energy abundance.

Bollinger Delivers 11th FRC to the US Coast Guard

Bollinger Shipyards, Inc. has delivered the William Trump, the 11th Fast Response Cutter (FRC) to the United States Coast Guard.   The announcement was made by Bollinger Chief Operating Officer,

Australian Defence Minister Says Would Not Trust Submarine Firm to Build Canoe

Australia's defence minister has said he would not trust state-owned Australian Submarine Corp (ASC) "to build a canoe", fuelling expectations that most work in

Offshore Energy

Pile Testing for Wikinger Wind Farm Launched

In October 2014 the first phase of the pile testing campaign for the Wikinger offshore wind farm project was launched after the site’s geotechnical investigation on the Baltic Sea had been completed.

Damen, Palfinger Upgrade North Sea Jack-Up Rig

With the support of Palfinger systems JUMP technology, Damen Shiprepair Vlissingen has completed an upgrade of a Keppel Fels ‘N’ Class drilling rig, one of the largest in the North Sea,

Vietnam Warship Visits Underscore Regional Tension

Vietnam on Tuesday showed off its two most powerful warships in the first-ever port call to the Philippines but an official said it was not trying to challenge

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction Winch
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: 0.2537 sec (4 req/sec)