Ensco Updates on Third Quarter Earnings Outlook
Ensco International Inc. has provided an update on its third quarter earnings outlook. As previously reported in the Company's rig status SEC Form 8-K filing, two of its Asia Pacific jackup rigs, ENSCO 56 and ENSCO
107, incurred or will incur a total of approximately 90 days of waiting-on-weather time during the third quarter prior to commencing new contracts.
Accounting rules require that revenue earned during this waiting period be deferred and recognized over the term of the new contracts. Also as previously reported, ENSCO 7500 is expected to complete its current contract in the Gulf of Mexico and then commence mobilization to Australia under a new contract late in the third quarter.
Although the rig will continue to earn a day rate during the mobilization period, revenue will be deferred and recognized over the term of the new contract. The revenue deferral for the two Asia Pacific jackups and the ENSCO 7500 is expected to reduce third quarter earnings by approximately $0.11 per share.
Additionally, the Company has Singapore dollar denominated investments that hedge a significant portion of the local currency obligations associated with its ENSCO 8500 Series(R) deepwater rig construction contracts with a Singapore shipyard. Due to recent strengthening of the US dollar, the Company expects to recognize foreign currency exchange losses of approximately $0.07 per share during the third quarter in connection with its Singapore dollar denominated investments. These losses will essentially be offset by a corresponding reduction in the cost of the ENSCO 8500 Series(R) rigs.
Manages 64 Offshore Rigs
- Ensco Acquires Atwood Oceanics, Lays Off Staff (Oct 10)
- Lamprell to Compensate Ensco for Delay in Delivery of ENSCO 140 (Aug 29)
- Lamprell Delays Delivery of Jackup to Mid-August Due to Technical Issue (Jul 27)