Norway's Songa Offshore Expects Further Market Weakness in 2015

Reuters

OSLO, Nov 10 (Reuters) – Rig firm Songa Offshore said it expected weak demand in the Norwegian floater market to persist in 2015 as it posted third-quarter core earnings ahead of forecasts on Monday.

Rig operators have been hurt this year as new rigs enter an already oversupplied market, and oil firms delay or cancel projects to save cash after a 10-year spending spree and a significant fall in crude prices since June.

"In line with the global drilling market, the NCS (the Norwegian continental shelf) floater market has been soft in 2014 and a reduction in requirements are expected in 2015," the company said in a statement.

A floater is a type of rig that is not secured to the sea bed. Floaters include drillships and semi-submersible rigs. Songa Offshore specialises in semi-submersible rigs.

"As a result of the dampened activity, there are several rigs that have left or are expected to exit the NCS in the near future," the company said.

On Oct. 6 Statoil said it had idled a Transocean and a Songa Offshore drilling rig due to high costs and lack of work.

Transocean, the owner of the world's largest offshore drilling fleet, said last week it expected to incur impairment charges of $2.76 billion in the third quarter and would delay its results for the period.

Songa Offshore reported earnings before taxes, depreciation and amortisation of $40.6 million, against expectations for $27.3 million according to the mean average in a Reuters poll of analysts.

Earnings fell from $50.6 million a year earlier.

(Reporting by Stine Jacobsen; editing by Jason Neely)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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