UK offshore driller Ensco posted a loss for the fourth quarter of 2017 and the first quarter following the acquisition of rival driller Atwood Oceanics, compared to a profit in the year-ago quarter.
Ensco completed the acquisition of Atwood Oceanics during the fourth quarter of 2017.
On Monday, February 26 Ensco posted a loss of $207.1 million for the fourth quarter of 2017 compared to a profit of $39 million in the fourth quarter of 2016.
Revenues were $454 million in fourth quarter 2017 compared to $505 million a year ago. Revenues declined 10% compared to the year-ago period primarily due to a decline in the average day rate for the fleet to $157,000 from $177,000 last year. The addition of $23 million of revenue from Atwood, net of $16 million of contract intangible asset amortization, partially offset lower average day rates across the fleet.
Contract drilling expense increased to $334 million in fourth quarter 2017 from $289 million a year ago due to the addition of $53 million of costs associated with 11 Atwood rigs and $7 million of integration-related transaction costs. Disciplined cost management, including more efficient stacking of rigs, partially offset this increase, Ensco said.
Fourth quarter 2017 results included a non-cash asset impairment of $183 million primarily related to two non-core floaters. There was no impairment charge recognized in the year-ago period.
Ensco CEO and President Carl Trowell said, “During the fourth quarter, we successfully completed the Atwood acquisition, which significantly enhanced the technical capabilities of our rig fleet and improved our ability to meet increasing customer demand for high-specification assets. Integration continues to progress as planned and we remain on track to achieve targeted synergies.”
Trowell continued, “We took additional steps to improve our financial position by extending our revolving credit facility and refinancing our nearest-term debt maturities through a senior notes offering and debt tender earlier this year. These actions provide us with the financial flexibility to continue positioning Ensco as a leading offshore service provider.”