Ocean Rig Sees Strong 3Q05 Results

The company's 3rd Quarter EBITDA was $ 23.2 million, the highest quarterly EBITDA recorded in Ocean Rig. During the 3rd Quarter, Ocean Rig entered into firm contracts with ExxonMobil and Shell at record high day rates, increasing the company's firm contract backlog from $ 250 million to $ 870 million ($ 1.065 million if the Shell option is declared) and creating a base for strong improvement in future earnings.

The net result for the 3rd Quarter amounted to $ -7.4 million ($ -24.2 million), corresponding to earnings per share of $ -0.08 ($ -0.37), and diluted earnings per share of $ -0.08 ($ -0.37). The operating result for the 3rd Quarter amounted to $ 9.6 million ($ -12.7 million) and EBITDA was $ 23.2 million ($ -2.0 million). Adjusted for $ 1.6 million of non cash expenses related to employee share options, EBITDA was $ 24.8 million.

Main events:

  • The last portion of high yield debt (11% interest rate) was replaced by the drawdown of the final tranche of the new bank loan, reducing the Group's overall interest rate to currently 6.2% p.a. and completing the process of refinancing of all Group debt.
  • Signing of a 2-year firm contract with ExxonMobil for Eirik Raude for exploration drilling offshore Canada, in addition to the US Gulf of Mexico, offshore United Kingdom or offshore Norway.
  • Signing of a 2-year firm contract (plus a 1-year option) with Shell for Leiv Eiriksson for exploration drilling in the UK, Irish and Norwegian sectors, with estimated contract value of $ 340 – 350 million ($ 535 – 545 million if the option is declared).

The Executive Chairman, Geir Aune said: "In the 3rd quarter we reached two important milestones by completing the refinancing and signing new contracts with ExxonMobil and Shell. The effect of this is a 30% reduction in annual interest expenses and $ 620 million in increased contract backlog at record high day rates, representing strong expected growth in future earnings."