North Atlantic Drilling Limited (NADL) said the near-term demand for its services could be “extremely challenging”.
It comes after the subsidiary of Seadrill posted a revenue of $136.7million, down from $194.4million in the third quarter of last year.
The figures were as a result of both the contract of its West Phoenix and West Alpha rigs coming to an end.
In a statement NADL said:“While our long-term view of the market for harsh environment drilling rigs remains positive, in the near term it remains extremely challenging. Oil prices remained in the $40-50 range during the third quarter, a level that is not sufficient to reverse the declines in oil company upstream spending. It is expected that upstream spending will again decline in 2017, albeit less than previous reductions of approximately 27% in 2016 and 24% in 2015.
“While the forecasted decline in spending sets the stage for another challenging year in the offshore drilling business it is important to recognize the resetting of costs across the value chain. This may facilitate increased activity on a year over year basis with only a marginal increase in commodity prices if accompanied by pricing stability,”
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