Transocean Ltd. (RIG, RIGN.VX) swung to a second-quarter loss as contingencies for the Deepwater Horizon oil spill in the U.S. Gulf of Mexico weighed on the offshore oil-driller’s results, though revenue improved.
Transocean owned the Deepwater Horizon, the rig that exploded and sank in the Gulf of Mexico in 2010, killing 11 people and setting off the worst offshore oil spill in U.S. history. The company still faces significant challenges as it faces potentially costly litigation with BP PLC (BP, BP.LN) and the U.S. government over the oil spill.
The company completed its $1.43 billion acquisition of rival Aker Drilling ASA last month, a move that expands its business into the harsher, more challenging sub-Arctic waters. Transocean’s revenue has now improved for three quarters.
For the latest period, Transocean reported a loss of $304 million, or 86 cents a share, compared with a year-earlier profit of $124 million, or 39 cents a share, a year earlier. The most recent period included charges of $1.58 a share, mostly related to loss contingencies associated with the Deepwater Horizon oil spill, compared with charges of 11 cents a share a year earlier.
Revenue rose 10% to $2.58 billion.
Analysts polled by Thomson Reuters had projected a per-share profit of 45 cents and revenue of $2.49 billion.
Excluding $750 million for estimated loss contingencies associated with the oil spill, operating and maintenance expenses rose 9.8% to $1.607 billion.
Average daily revenue slipped 2.1% from a year earlier and rose 1.4% from the prior quarter. Its fleet utilization rate was 66%, up from 55% a year ago and 61% from the previous quarter.
Earlier Wednesday, a Brazilian court handed down an injunction banning Transocean and U.S. oil major Chevron Corp. (CVX) from producing or transporting oil until an investigation into an offshore oil spill is completed. The court ordered the companies to halt their activities in Brazil in 30 days or face daily fines of 500 million Brazilian reais ($250 million).
Transocean shares were up 1.1% at $48.30 after hours Wednesday. The stock has gained 25% so far this year.