Seadrill Sees Profits Fall in 4Q 2011
|Wednesday, February 29, 2012
Norwegian-Bermudan deepwater drilling firm Seadrill announced its fourth quarter results Wednesday, reporting that its operating profit for 4Q 2011 was $436 million compared with $480 million for the preceding quarter.
The third quarter included a $23 million gain on the sale of West Juno, while the fourth quarter includes a non-recurring $16 million expense related to termination of a third party management agreement for two jackup rigs in the Middle East. Termination of the management contract will provide for cost savings more than offsetting the non-recurring expense during the remaining contract period for the two rigs, said Seadrill.
Net financial items for the quarter showed a loss of $501 million compared to a loss of $372 million in the previous quarter. This loss includes a $463 million non-cash impairment charge on the company's 39.9-percent ownership in Archer.
The investment is written down to reflect the share price as of Dec. 31, 2011. This loss is partly offset by a gain of $33 million on other derivative financial instruments for the quarter whereas we the previous quarter had a loss of $330 million on such instruments.
Income taxes for the fourth quarter were $17 million, down from $50 million in the previous quarter.
Net loss for the quarter was $82 million corresponding to a basic loss per share of $0.23.
"The market prospects for our industry are looking increasingly promising based on growth in rig demand due to our customers' significant exploration success and the prevailing favorable energy prices," said Seadrill Chief Executive Officer Alf C Thorkildsen. "We are of the opinion that this development will provide us opportunities to continue the growth of our company. The strong cash-flow from operations is supporting our growth and our cash dividend."
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