Songa Offshore Drilling Boasts Higher Than Forecast Profits

Published at 11:10AM - 26/02/16

Songa Offshore drilling boasts higher than forecast profits, as two longterm drilling contracts get underway with oil major Statoil.

The results showed a mixed picture, with highs including two new longterm contracts being started,; and lows including one drilling contract being canceled early and major issues with the company’s two new CAT D semisubmersible drilling rigs.

Higher Than Forecast Profits

In the results, Songa posted a profit of US$ 34 million for the fourth quarter of 2015, up from a loss of US$51 million during the same period the previous year.

However much of the profit came by the way of a US$ 41.1 million cancellation fee for the Songa Trym, boosting earnings higher than forecasts.

Overall the situation doesn’t look good for Songa, with the accounts to year end 2015, showing a deepening loss of US$ 278 million, from a loss of US$ 57 million in 2014.

Songa CAT D Rig Issues

On the up side, Songa did commence work on two new long term contracts with oil major Statoil. The contracts have employed the company’s two new CAT D drilling rigs, the Songa Equinox and Songa Endurance.

However having both started work at the end of December 2015, both experienced major issues within days of drilling their first wells.

The Songa Endurance suffered a BOP failure in final testing prior to drilling, causing the drilling operations to be cancelled and, sending Endurance back to shore for repairs lasting weeks.

The Songa Equinox suffered complete dynamic positioning failure, again on its first well, causing the rig to drift off location whilst down hole.

The incident resulted in the rig’s management initiating the BOP shear rams, cutting the drillstring. Like the Endurance, Equinox also had to return to shore for weeks of repairs.

Songa Offshore CEO, Bjørnar Iversen, said: ”We have put behind us a very busy quarter with the two first Cat D rigs, Songa Equinox and Songa Endurance, commencing drilling operations and the delivery of Songa Encourage.”

“While we experienced startup challenges with Songa Equinox and Songa Endurance, the legacy fleet had another quarter with 100% operational uptime and with further reductions in operating cost.”

Last updated on 06:55PM - 27/02/16