Ocean Rig Reports Strong Ultra-Deepwater Fundamentals
Ocean Rig CEO George Economou commented in his Q1 2013 earnings report yesterday that the “outlook for the UDW (Ultra-Deepwater) drilling industry is very positive given the high level of demand we are continuing to witness, and the emergence of new drilling areas in East Africa and the Asia/Pacific region coming into focus.”
The above graph from Fernley Offshore shows the trend of increasing day rates already being secured by operators over the coming years. Ocean Rig’s current contract backlog stands at $4.8 billion, a 40 percent increase since the first quarter of 2012.
The demand for deepwater exploration is certainly there. Ocean Rig notes in their presentation that all 99 UDW rigs in the Gulf of Mexico, South America, and Africa are currently under contract and the below graph from Wood Mackenzie shows the future demand only getting stronger.
Ocean Rig plans to capitalize on this prospective growth and will be accepting delivery of three drillships, the Ocean Rig Mylos, Ocean Rig Skyros and Ocean Rig Athena by the end of 2013. In addition, last October the Athens-based drilling contractor placed an order for sistership to the three 7th-generation drillships currently under construction at Samsung Heavy. This new rig has a scheduled delivery date of January 2015.
In their earnings presentation, Ocean Rig commented that 20 new UDW contracts or extensions have been signed so far in 2013, the majority of which was focused in the Gulf of Mexico and West African regions.
For the first quarter of 2013, Ocean Rig reported a net income of $6.4 million and Adjusted EBITDA of $104.7 million compared to $50.7 million for the first quarter of 2012.
Ocean Rig experienced a net loss of $46.3 million in the first quarter of 2012.
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