Seadrill net income higher than forecast – considering more newbuild orders

The Norwegian rig giant, Seadrill has reported a higher than forecast net income for Q1, prompting the company to consider the possibility of yet more newbuild orders.

Seadrill listed a net profit of US$ 439 million, considerably higher than the average forecast of US$ 309 million. Despite being better than forecast, the figures are still overshadowed by last year’s huge figure of US$ 886 million which was brought about by US$ 540 million gain made by the sale of subsidiary.

Operating profit rose by 6% to US$ 456 million whilst revenue declined by 5% to US$ 1.05 billion.

Seadrill’s CEO, Alf Thorkildsen voiced the company’s optimism when he said, “The outlook and fundamentals for the oil and gas industry remain strong. Encouraging exploration successes in established as well as frontier basins are leading to an increasing backlog of appraisal and development drilling projects. These strong fundamentals support the expectation of continued strength in all sectors of the contract drilling industry for the foreseeable future.”

He added that as a consequence of the positive environment, the company had ordered 6 additional newbuilds in the last three months alone and that 18 drilling units were now under construction.

High rig utilisation rates seen in the previous Quarter have boosted the company’s confidence in its decision to continue expanding its fleet of rigs.

Demand for rigs has pushed day rates to highs of anywhere between US$ 550 000 to US$ 650 000.

Edited from various sources by David Bizley

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