Offshore Driller Ensco To Shut Down Rig, Slashes Dividend


Feb 26 (Reuters) - Offshore driller Ensco Plc said it would shut down an ultra-deepwater rig as demand dwindles due to a slump in crude prices, a day after it slashed its quarterly dividend by 80 percent.

The company's shares fell nearly 8 percent to their lowest in six years.

Ensco reported a fourth-quarter loss on Wednesday, compared with year-ago profit, hurt mainly by a $3 billion goodwill impairment charge.

Rival Transocean Ltd also said on Wednesday it wrote down the value of its contract drilling business by $992 million in the December quarter, and has no goodwill remaining on its balance sheet.

Ensco will shut down or cold stack a rig by mid 2015, Chief Executive Carl Trowell said on a conference call with analysts on Thursday. The move will cost the company about $12 million over the first and second quarters.

Ensco, which is looking to sell three of its rigs, said it could stack an additional rig if oil prices did not improve.

Oil prices , which fell to more than six-year lows last month, have nearly halved since their highs in June, hurt by a global supply glut and weak demand.

Ensco cut its quarterly dividend to 15 cents per share from 75 cents, mirroring an 80 percent cut in dividend by Transocean earlier this month.

The dividend cut will save Ensco about $560 million in cash annually, Evercore ISI analyst James West wrote in a note.

Ensco's shares fell to as much as $24.51 on the New York Stock Exchange. Up to Wednesday's close, the stock has more than halved since June.

(Reporting By Shubhankar Chakravorty in Bengaluru; Editing by Saumyadeb Chakrabarty)

Copyright 2016 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Columbia, SC
Project Manager
Expertise: Engineering Manager
Location: Atlanta, GA
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Raleigh, NC
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours