Diamond Offshore Starts Rig Stack and Scrap

Published at 05:40PM - 01/08/16

Diamond Offshore announced in its second quarter results that it has decided to cold stack one semi-submersible drilling rig and one jack-up rig as well as scrap two semi-submersible rigs.

The drilling contractor’s decision follows an attempt to cut costs associated with the drilling rigs while ensuring the facilities remain preserved in a way that enables a quick reactivation as soon as the market recovers, the company informed.

“Although the market continues to be challenged, our focus is on striking a balance between controlling costs and laying the foundation to ensure Diamond Offshore is well positioned for the recovery,” Diamond Offshore President and Chief Executive Officer, Mark Edwards, said.

Diamond Offshore Starts Rig Stack and Scrap 

The rigs to be cold stacked will be Ocean Endeavour, built in 2007 and located in Italy, and the Ocean Scepter, built in 2008 and located in the US Gulf of Mexico.

The two semi-submersible rigs to be scrapped will be Ocean Questand, built in 1973 and located in Malaysia and Ocean Star, built in 1997 and located in the US Gulf of Mexico.

As well as this, the company announced it has received a three-month extension for its contract with Woodside Energy in Australia, for the semi-submersible drilling rig Ocean Apex.

The rig was built in 2014 and represents a day rate of US$205,000 (£155,206) from mid-November 2017 until mid-February 2018.

Diamond Offshore Falls to a Loss 

The company reported a difficult first half of the year, falling to a loss over the second quarter as a result of impairment charges and related taxes.

The company’s revenue also dropped during the quarter, by 17%, mostly as a result of the carrying value of eight semi-submersible rigs and associated inventory, the company explained.

There was also a slight decline in Diamond Offshore’s operational efficiency, mainly due to issues experienced within the ultra-deepwater floater category related to four unplanned retrievals of blowout preventers.

Last updated on 08:01PM - 02/08/16