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The Board of Directors of Scorpion Offshore approved the Company's 2nd quarter 2009 interim consolidated financial statements. These financial statements have been prepared in accordance with US Generally Accepted Accounting Principles.
Highlights for the quarter ended December 31, 2008 include:
- Revenues increased by 5% to $51.1 million during the quarter.
- Operating Income, net of an impairment charge to write down the construction in progress payments ("CIP") incurred to date for the Company's semisubmersible, decreased $6.3 million to $16.3 million from the 1st quarter due to the downtime on the Offshore Resolute (20 days -- uncontrollable) and Offshore Defender (5 days - controllable) during the quarter.
- Dayrate averaged $171,405 for the quarter. This is down $17,300 per day from the 1st quarter due to 20 days at zero rate experienced during the quarter due to a manufacturing flaw which resulted in the catastrophic failure of the Offshore Resolute's drawworks.
- Rig operating costs averaged $56,894 per day down $2,200 per day from the 1st quarter.
- Excluding the Offshore Resolute downtime, revenue utilization averaged 97% for the quarter, down from 98% in the 1st quarter.
Operations and Contracts
- Offshore Courageous completed its drilling program for RAK Petroleum offshore Oman on November 4, 2008, achieving 100% revenue utilization during the quarter. After completing contract specific modifications at the Lamprell shipyard, the rig began mobilizing on December 31, 2008 to begin its contract for Sarawak Shell in Malaysia.
- Offshore Defender continued working for Petrobras offshore Brazil and achieved 92% revenue utilization during the quarter due to 5 days of downtime.
- The Offshore Defender achieved an industry and Scorpion Offshore milestone by working "One Year with No Recordable Incidents".
- Offshore Resolute continued drilling for Thang Long Joint Operating Company in Vietnam. Excluding the 20 days of aforementioned downtime due to the drawworks failure, the rig achieved 98% revenue utilization.
- Offshore Vigilant began working November 11, 2008 for Urdanetagazprom-1 in Venezuela and achieved 100% revenue utilization and zero recordable incidents for the quarter.
- On October 29, 2008 Offshore Freedom signed the charter contract with Odjfell Drilling Services LLC for work in the neutral zone located offshore Saudi Arabia with a duration of 4 years at a dayrate of $185,000.
- On November 26, 2008, the Company announced that it was unable to secure financing for the construction of the semisubmersible rig contracted to operate in Brazil beginning in 2012 resulting in an agreement with the shipyard and equipment vendors to amicably terminate the construction contract and equipment orders on mutually acceptable terms. As a result of these negotiations, the Company's financial exposure is not expected to exceed the $74 million spent to date.
Significant Events since December 31, 2008
- Offshore Courageous arrived in Malaysia on January 19, 2009 and began earning dayrate on January 20, 2009.
- On January 14, 2009, Offshore Intrepid signed the charter contract with Odjfell Drilling Services LLC for work in the neutral zone located offshore Saudi Arabia with a duration of 41 months at a dayrate of $180,000.
- On January 14, 2009, the Company secured financing for its remaining construction payments on the Offshore Freedom and refinanced the amounts drawn under the semisubmersible bridge loan with Bayererische Hypo-und Vereinsbank AG in a new credit facility totaling $169 million.
- On February 19, 2009, Scorpion signed an agreement to amend the Intrepid Revolving Credit Facility by $24.0 million to $34.0 million.
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