“We deliver a satisfactory third quarter result given the adverse market conditions. We continue to focus on operational performance and a competitive cost level, which are key factors in order to secure contracts for our rigs,” says Claus V. Hemmingsen, CEO in Maersk Drilling and member of the Executive Board in the Maersk Group.
In the third quarter, Maersk Drilling signed two new contracts. Maersk Resilient secured a three-year contract and Mærsk Giant received a contract for 150 days, both for work in the Danish sector of the North Sea. Furthermore, Maersk Drilling signed four contract extensions. A 16 months’ extension for Mærsk Innovator working in Norway, a five-year extension for Heydar Aliyev working in the Caspian Sea in Azerbaijan, a 250 days’ extension for Maersk Resolve in the Danish sector of the North Sea and latest a three-year extension for Maersk Discoverer working offshore Egypt.
“With the recent signings in the third quarter, we have added USD 1.1bn to our backlog, which is very rewarding in this challenging market. The Heydar Aliyev extension alone is worth USD 523m. Combined with our strong operational and safety performance, a solid forward contract coverage will enable us to navigate the current market conditions, where 2016 by no means will be easier, which is also reflected in the fact that the contracts signed in the third quarter is at a significantly lower dayrate compared to previous contracts.”
At the end of Q3 2015, Maersk Drilling’s forward contract coverage was 85% for the rest of 2015, 70% for 2016 and 49% for 2017. The total revenue backlog by end Q3 2015 amounted to USD 5.8bn (USD 6.6bn).
Maersk Drilling maintains the expectation of a significantly higher underlying result for 2015 than in 2014 (USD 471m) due to more rigs in operation, high forward contract coverage as well as impact from the initiated cost reduction and efficiency enhancement programme, which in Q3 2015 delivered a saving of more than 10% compared to Q3 2014.
Download Maersk Drilling's third quarter presentation here.
Facts about the third quarter 2015 performance:
- Profit of USD 184m (USD 192m)
- ROIC was 9.0% (10.7 %)
- Operational uptime averaged 97% (97%)
Maersk Drilling’s modern fleet counts 22 drilling rigs including drillships, deepwater semi-submersibles and high-end jack-up rigs. Further, Maersk Drilling has one ultra harsh environment jack-up rig under construction. Maersk Drilling employs an international staff of 4,500 people and generated a profit (NOPAT) of USD 478m in 2014.