Songa Offshore Sees Improved Norway Rig Market From 2H 2015


OSLO, Aug 25 (Reuters) - Rig firm Songa Offshore said it expected the Norwegian rig market to improve beginning in the second half of 2015 due to lower supply as it posted an unexpected quarterly net loss on Monday due to a $31 million impairment.

Rig operators and other suppliers have suffered from lowering capital spending from oil companies, which are trying to boost margins and maintain dividends.

Songa, which operates five rigs under long-term contract with Statoil off Norway, said it expected the rig market serving the world's seven-largest oil exporter to improve next year.

"As a result of the dampened activity, there are several rigs expected to exit the NCS (Norwegian continental shelf) in the near future," the firm said in a statement.

"Songa Offshore expects an improved NCS market from the second half of 2015 and into 2016 as a result of low net fleet growth with already several known new rig requirements in the market."

The firm reported a net loss of $8.9 million, against expectations for a profit of $5.6 million, according to analysts polled by Reuters. It posted a profit of $4.5 million a year ago.

The firm booked a $31.2 million impairment related to two rigs. Their value had to be revised down following their sale to the Opus Offshore Group in April.

Quarterly earnings before taxes, depreciation and amortisation (EBITDA) reached $60.5 million for the quarter against an analysts' forecast of $49.4 million.

The firm said there were no further delays for its Cat D rig project which involves the development of four tailor-made rigs for Statoil for use in offshore oil and gas fields.

The firm had to seek refinancing during the fourth quarter of last year in order to continue with the scheme and announced schedule delays and cost increases in the first quarter of this year.

Shares in Songa were up 2 percent at 0707 GMT, outperforming an Oslo benchmark index up 0.49 percent. The stock has shed 21 percent this year versus an Oslo index up 11 percent.

(Reporting by Gwladys Fouche, editing by Terje Solsvik; editing by Jason Neely)


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.