Songa Offshore SE (“Songa”) reports total comprehensive income for the first quarter of 2011 of USD 25.1 million. Operating revenue for the first quarter was USD 140.7 million. This includes mobilization and demobilization revenue of USD 1.0 million.
Total expenses for the first quarter were USD 90.0 million. The figure includes a nonoperational gain of USD 0.2 million posted under “other gain and loss”. The “other gain andloss” is split between a loss on flippable swap of USD 0.3 million, USD 1.8 million in currency loss, and USD 0.5 million in gain on disposal of short term investment.
EBITDA for the first quarter was USD 56.3 million.Net financial expenses for the first quarter were USD 5.0 million.
Earnings per share (EPS) and diluted earnings per share (DEPS) for the first quarter were SD 0.15. Average number of shares for the quarter was 167,712,544, and as per end of the period the outstanding number of shares was 167,712,544.
Main events during the first quarter of 2011
On 16 January Songa Mercur suffered from structural failure of the telescopic joint, causing an uncontrolled descent of the BOP and Marine riser a short distance to sea bed. The rig was not drilling at the time of the incident and the BOP was in safe distance from the well which had already been plugged and secured.
All required resources were readily available in the area for a safe and effective recovery.The on-going well was near its final stages at time of incident and the rig had been plannedto be towed to Singapore area after well completion in preparation for upcoming and future contracts. The rig is currently in Singapore and is undergoing contract preparation and equipment reinstatement after the BOP repairs.
On 25 January Songa Offshore announced that it has increased the ownership in Deepwater Driller with an additional 20.6% of the outstanding shares and Songa Offshore now owns a total of 51.9% of the outstanding shares in Deepwater Driller. The seller of the shares is
Petrolia Invest AS. The purchase price for the additional shares is USD 34.5 million, and this has been paid out of current cash balance. Deepwater Driller owns the “Songa Eclipse”, a 6th generation Friede & Goldman ExD ultra-deepwater semi-submersible drilling rig under construction at Jurong Shipyard Pte Ltd, Singapore (“Jurong”) with scheduled delivery in August 2011.
The investment in Deepwater Driller is on a non-recourse basis, but Deepwater Driller is from Q1 2011 consolidated into the accounts. The conditions in the shareholder agreement between the shareholders in Deepwater Driller are still as described in the press release of 24 March 2010. The increase of ownership in Deepwater Driller is in line with the communicated strategy and should be seen as part of the overall strategy to expand into the ultra deepwater segment.
On 17 March Songa Offshore announced that its 100% owned subsidiary, Songa Rig AS, has received a Letter Of Award (LOA) from Statoil for the use of Songa Delta for a 3 years firm plus 1 year option Drilling Contract on the Norwegian Continental Shelf. The f i rm part of the contract has an aggregated revenue value of USD 409 million inclusive a rig upgrade element and an associated yard stay prior to contract commencement. The contract also includes an option to extend the f i rm period of the contract, and this option will have to be exercised prior to the contract commencement. The contract with Statoil has been signed by both parties.
The yard stay and contract with Statoil will commence in direct continuation of the rig’s current commitment and subsequent demobilization from Det Norske/Wintershall late Q2/early Q3 2012. Songa Offshore will undertake full rig management and operations responsibility of the Songa Delta from current Odfjell Drilling Management at time of transition between contracts.
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Source: Songa Offshore , May 10, 2011;