Fred Olsen Reports Flat Revenues amid 'Challenging' Market

Norwegian offshore drilling firm Fred Olsen Energy reported Wednesday almost flat revenues for 2014 as its fleet of rigs continued to find work on the Norwegian Continental Shelf (NCS) as well as offshore Africa, UK and Colombia. However, the firm warned that it would be suspending its dividend payments to investors due to the "challenging offshore market and uncertainty of how long this will persist".

Fred Olsen's total revenues for 2014 were $1.18 billion, only slightly down on the $1.19 billion it generated in 2013. But the firm's profit before tax came in at $148.6 million, compared with $318.1 million last year.

Fred Olsen actually saw a rebound in its profit performance during the fourth quarter of 2014, when it produced $104.2 million of pre-tax profit on turnover of $297.6 million. In 3Q 2014 the firm's pre-tax profit was just $3.6 million on turnover of $335.4 million.

The firm's operating costs during 4Q 2014 fell partly due to reduced costs for operating the Borgny Dolphin (mid-water semisub) rig – which is cold stacked – and lower costs for its Borgland Dolphin (mid-water semisub) rig in connection with a five-year class renewal survey.

Fred Olsen said its Bideford Dolphin (mid-water semisub) rig is still under a three-year drilling contract (expiring January 2017) with Statoil but that the operator has decided not to opt for a two-year extension to the contract. The Borgland Dolphin is set to continue an 18-well drilling contract on the NCS once it has completed its yard-stay at the end of February. The Bredford Dolphin (mid-water semisub) rig is continuing operations under a drilling programme for four oil companies on the NCS that is scheduled to be completed during the third quarter of this year.

Beyond Norway, the Bolette Dolphin (DW semisub) rig began its four-year drilling contract with Anadarko Petroleum Corporation in May 2014. The unit has completed its operations offshore Ivory Coast and is currently drilling offshore Colombia.

The Belford Dolphin (DW drillship) rig is also currently operating under a four-year drilling contract with Anadarko Petroleum Corporation and this contract is due for completion in 2018. The rig is currently operating offshore Mozambique.

The Blackford Dolphin (DW semisub) rig has begun a contract with Nexen for operations in the UK and will then be hired out to Chevron for a 572-day contract, also on the UK Continental Shelf.

The Byford Dolphin (mid-water semisub) rig is under a three-year contract with BP Exploration Operating Company Ltd while the Borgsten Dolphin (mid-water semisub) is under a 40-month contract with Total E&P UK Ltd as a Tender Support Vessel for the Dunbar platform in the UK North Sea.



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