Revenues increased as a function of higher day rate for Ekha and higher day rates and utilization for - SeaDrill 6 and Crystal Ocean.
Vessel and rigs operating expenses increased in the fourth quarter to $15.9 million as compared to $4.2 million in the third quarter. The increase was due to SeaDrill 6 commenced its operations and SeaDrill 7 completed its upgrading in Brownsville and was mobilized to West Africa. Administrative costs were $2.7 million this quarter compared to $0.9 million in the third quarter reflecting the costs incurred in building up the SeaDrill organization in Singapore.
The results for the third quarter have been restated to reflect the change of accounting treatment for the investment in Ocean Rig ASA ("Ocean Rig") and the capitalization of interest expense. The investment in Ocean Rig was equity accounted for in the third quarter which resulted in a share of net loss of $5.7 million. The Company has reviewed its accounting treatment and concluded it is more appropriate to account for it as an investment in available-for-sale marketable securities as the investment was more an opportunistic holding. The investment was subsequently disposed of in January 2006. The unrealized holding gain on investment in Ocean Rig of $81.7 million was accounted for in other comprehensive income at December 31, 2005. The realized gain of 79.9 million will be recorded in the first quarter of 2006. Interest expenses of $5.9 million incurred on the Company's various loans from inception to December 31, 2005 were capitalized as part of the construction costs on newbuildings in accordance with US GAAP.
In addition, the fourth quarter's results have been positively impacted by the Company's share of preliminary results of $3.0 million of its 33.05% investment in PT Apexindo Pratama Duta Tbk ("Apexindo") and share of results of $0.1 million of its 40.08% investment in Mosvold. The contribution from Apexindo may be subject to change as a result of finalization of the accounting treatment of its cross currency swap transactions. In December 2005, SeaDrill entered into a share swap transaction on 2,107,600 Smedvig ASA ("Smedvig") shares with no right to the physical delivery of the shares. The swap was, in accordance with US GAAP, accounted for as a derivative and resulted in positive contribution of $5.3 million based on market to market revaluation.
The Company reports an operating loss of $11.2 million and a net loss of $2.6 million for the period from inception through December 31, 2005.
Earning per share for the quarter was $0.01 and loss per share from inception to December 31, 2005 was $0.01 respectively.
The financial information presented herein is unaudited and is prepared in accordance with U.S. generally accepted accounting principles.
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