“Maersk Drilling has delivered a satisfactory result in an adverse market, where termination fees, high operational uptime and savings on operating costs offset an increase in idle days. However, the market outlook for the offshore drilling industry remains challenged, which will also affect our business going forward. As current contracts expire, new and lower day rates will be adopted or rigs will become idle,” says Claus V. Hemmingsen, CEO of Maersk Drilling and Vice CEO of the Maersk Group.
At the end of Q3 2016, Maersk Drilling’s forward contract coverage was 68% for the rest of 2016, 55% for 2017 and 45% for 2018. The total revenue backlog by the end of Q3 amounted to USD 4.1bn (USD 5.8bn). Excluding exchange rate effects and number of rigs in operation, Maersk Drilling have reduced costs by 11% compared to Q3 2015. Since the launch of the cost reduction and efficiency enhancement programme in Q4 2014, Maersk Drilling’s costs have been reduced by more than 18%.
“The offshore drilling industry continues to be challenged by low oil prices and deteriorating market conditions, driving down both dayrates for new contracts and rig utilisation levels due to lower demand,” says Claus V. Hemmingsen.
Maersk Drilling now expects an underlying result in line with last year (USD 732m), with a break-even result expected in Q4, versus previously an underlying result below last year.
Download the third quarter presentation here
Facts about the Q3 2016 performance:
• Profit of USD 340m (USD 184m)
• ROIC was 17.2% (9.0 %)
• Operational uptime averaged 98% (97%)
About Maersk Drilling
Maersk Drilling’s modern fleet counts 23 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 3,500 people and generated a profit (NOPAT) of USD 751m in 2015. For further information, see www.maerskdrilling.com