Seadrill Loses Less in Q2

Deepsea drilling contractor Seadrill reported narrowed losses for Q2 on August 20, while pointing to several encouraging market trends.

The rig operator booked a net loss of $206mn in the three months ending June 30, compared with a $432mn loss in the same period last year. Operating revenues slumped to $321mn from $348mn a year ago, however, as the global rig market remained bearish.

Second-quarter adjusted pre-tax earnings (Ebitda) came to $69mn, surpassing Seadrill’s guidance of $55mn thanks to the timing of maintenance expenditure. Its operating losses also shrank to $73mn from $539mn a year earlier, owing to reduced costs as well as impairment charges booked in Q2 2018.

Commenting on the results, CEO Anton Dibowitz said that tendering activity and rates were improving, but noted that Seadrill would proceed with caution.

“While we see improving trends in the forward market, rates for work in 2019 and 2020 do not justify reactivations and we will continue to be disciplined about adding supply to the market,” he said.

Utilisation in the jack-up market remains above 80% with rates approaching $100,000/day, Seadrill said, while there are “pockets of strength” in the market for harsh environment and high-end ultra-deep rigs, with utilisation nearing 90%.

Seadrill added around $160mn to its order backlog in Q2 after securing six new rig contracts, raising the total of $1.9bn as of June 30.