ENSCO 5006 semi-submersible drilling rig, image via INPEX
Feb 26 (Reuters) – Offshore driller Ensco Plc said it would shut down an ultra-deepwater rig as demand dwindles due to a slump in crude prices, a day after it slashed its quarterly dividend by 80 percent.
The company’s shares fell nearly 8 percent to their lowest in six years.
Ensco reported a fourth-quarter loss on Wednesday, compared with year-ago profit, hurt mainly by a $3 billion goodwill impairment charge.
Rival Transocean Ltd also said on Wednesday it wrote down the value of its contract drilling business by $992 million in the December quarter, and has no goodwill remaining on its balance sheet.
Ensco will shut down or cold stack a rig by mid 2015, Chief Executive Carl Trowell said on a conference call with analysts on Thursday. The move will cost the company about $12 million over the first and second quarters.
Ensco, which is looking to sell three of its rigs, said it could stack an additional rig if oil prices did not improve.
Oil prices, which fell to more than six-year lows last month, have nearly halved since their highs in June, hurt by a global supply glut and weak demand.
Ensco cut its quarterly dividend to 15 cents per share from 75 cents, mirroring an 80 percent cut in dividend by Transocean earlier this month.
The dividend cut will save Ensco about $560 million in cash annually, Evercore ISI analyst James West wrote in a note.
Ensco’s shares fell to as much as $24.51 on the New York Stock Exchange. Up to Wednesday’s close, the stock has more than halved since June. (Reporting By Shubhankar Chakravorty in Bengaluru; Editing by Saumyadeb Chakrabarty)
(c) 2015 Thomson Reuters, All Rights Reserved
Perhaps it’s this rig?
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 108,793 members that receive our newsletter.
Have a news tip? Let us know.
KUALA LUMPUR, Feb 26 (Reuters) – A ship that will hunt for missing Malaysia Airlines Flight MH370 has deployed to its Indian Ocean search zone, according to Malaysia’s transport minister and ship tracking data, raising hopes of...
Brazilian regulators are cracking down on some offshore drilling by oil giants like Petrobras and Equinor ASA, complicating exploration and production projects at a key moment in the nation’s effort to boost crude output.
Italy's Saipem has agreed to merge with Norwegian rival Subsea 7 in an all-share deal to create a leading global player in offshore energy services.
Maritime and offshore news trusted by our 108,793 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
