Maersk Expects Drilling Companies Will Continue to Face 'Headwinds'

Maersk Drilling announced Monday in its third quarter results statement that it expects offshore drilling companies around the world to continue to face “significant headwinds” in the future.

In an effort to weather the low oil price environment, the company has implemented a cost savings program, which delivered a 10 percent cost reduction compared to 3Q 2014. This program includes reductions on operational expenditures and the optimization of yard stays and stacking. Maersk Drilling delivered a net operating profit of $184 million (3Q 2014 profit: $192 million) and revenues of $646 million (3Q 2014 revenue: $525) in 3Q 2015. The company secured $1.1 billion in new contracts and extensions during 3Q 2015 and its total revenue backlog by the end of the quarter amounted to $5.8 billion. Operational uptime for Maersk Drilling matched last year’s figure of 97 percent in the quarter.

Claus V. Hemmingsen, CEO of Maersk Drilling, commented in a company statement:

“We deliver a satisfactory third quarter result given the adverse market conditions. We continue to focus on operational performance and a competitive cost level, which are key factors in order to secure contracts for our rigs….With the recent signings in the third quarter, we have added $1.1bn to our backlog, which is very rewarding in this challenging market…Combined with our strong operational and safety performance, a solid forward contract coverage will enable us to navigate the current market conditions, where 2016 by no means will be easier, which is also reflected in the fact that the contracts signed in the third quarter is at a significantly lower dayrate compared to previous contracts.”

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