Seadrill Reports $933MM in 2Q10 Revenues

Seadrill reported second quarter 2010 results.

Highlights

  • Seadrill generates second quarter 2010 EBITDA of US $493 million
  • Seadrill reports second quarter 2010 net income of US $329 million and earnings per share of US $0.77
  • Seadrill acquires the seven jack-up rig company Scorpion Offshore Ltd
  • Seadrill awarded US $2.9 billion in new contracts and contract extensions
  • Seadrill subsidiary Seawell announces proposed merger with Allis-Chalmers Energy Inc
  • Seadrill takes delivery of the ultra-deepwater units West Gemini and West Orion
  • Seadrill increases the quarterly cash dividend to US $0.61 per share

Second quarter results

Seadrill reported consolidated revenues for the second quarter 2010 of US $933 million compared to US $853 million for the first quarter 2010.

Operating profit for the second quarter was US $383 million as compared to US $332 million in the previous quarter.

The second quarter operating profit for Mobile Units amounted to US $310 million as compared to an operating profit of US $285 million in the first quarter 2010. The increase was related to improved contribution from the deepwater units.

The second quarter operating profit for Tender Rigs was US $55 million, an increase of US $20 million from the preceding quarter. The increase was mainly due to a full quarter in operations for the new tender rigs West Vencedor and T12.

Operating profit from Well Services amounted to US $19 million as compared to US $12 million in the first quarter 2010. The increase was due to higher overall activity.

Net financial items resulted in an income of US $0.1 million compared to a loss of US $86 million in the preceding quarter. The Company recorded a loss of US $168 million on derivative financial instruments related to mark-to-market of interest rate swap agreements, forward contracts and currency derivatives. The loss was offset by an accounting gain of US $111 million related to the revaluation of the first 40.1% ownership interest that Seadrill had acquired in Scorpion as well as an income of US $56 million related to a gain in connection with the purchase price allocation following the purchase of Scorpion.

Income taxes were US $54 million resulting in net income for the quarter of US $329 million. Earnings per share for the second quarter were US $0.77.

Chief Executive Officer in Seadrill Management AS Alf C. Thorkildsen commented, "Our strategy has been to grow our Company through construction and acquisition of premium assets and experienced employees. This strategy has provided Seadrill with the best contract backlog in the industry. As we now are turning our backlog into revenues we are proud to report the highest quarterly EBITDA (adjusted for gain on sales) in the Company's history."

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