Another rig company stumbles

May 04, 2015 12:00 AM

One of the largest rig services companies in the world, Diamond Offshore Drilling, said Monday it lost $256 million during the first quarter of the year.

Crude oil is trading in a bear market, forcing most major energy companies to spend less on exploration and production. That's led to major profit losses for rig services companies ranging from Schlumberger to Halliburton.

Diamond said Monday its net loss of $256 million for the first quarter compared to a net income of $146 million year-on-year. Three of its rigs are to be retired and scrapped.

"We have continued to implement cost savings measures while maintaining our focus on safe operations and delivering performance for our clients," President and Chief Executive Officer Marc Edwards said in a statement.

Rival Hercules Offshore last week posted a first quarter net loss of $57.1 million, compared to net income of $19.9 million during the first quarter of 2014. The company said first quarter 2015 revenue generated from U.S. operations fell by 63 percent year-on-year to $52.9 million. It ended the first quarter with nine marketed rigs, compared with 18 for first quarter 2014.

Diamond has a total fleet number of 35 offshore drilling rigs, with two under construction. Edwards was upbeat about the prospects of a market recovery during the second half of the year.

"During the second quarter, our next two new build drillships will begin working in the Gulf of Mexico, and the yard will complete our fourth drillship, which will also be headed to the U.S., where all four of drillships will work on term contracts extending into 2019 or beyond," he said.

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