North Atlantic Drilling reported difficult trading conditions has led to a third quarter loss of $2.6million as the downturn in rig activity hits home.
The company said the offshore drilling market is likely to remain challenging through 2016 with limited visibility of how it will shape up in 2017. North Atlantic said the timing and extent of a market recovery remained uncertain.
North Atlantic reported third quarter EBITDA of £113.1million compared with $119.3million in the previous three months of 2015. The revenue of $597.3million for the first nine months of 2015 compares with the $972.5million reported in the nine months ended September 30, 2014.
The company has secured a contract extension for the semi-submersible rig West Phoenix with Total in the UK, commencing mid-March 2016 and securing work for the unit through the end of August 2016 worth $62 million.
Current revenue backlog is $800million with average remaining contract length approximately 17 months excluding clients’ options for extensions.
The construction of the harsh environment semi-submersible drilling rig West Rigel is ongoing at Jurong Shipyard in Singapore.
The yard is estimating the rig will be ready for delivery in the fourth quarter of 2015. The company has had ongoing discussions with the yard regarding alternatives with the final yard installment, due upon delivery, of $455 million.
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