Songa Offshore Anticipates Stacking More Rigs

Songa Eclipse, Image courtesy Songa Offshore

OSLO, Feb 20 (Reuters) – Norwegian rig company Songa Offshore expects a challenging 2015 amid fierce competition for fewer contracts despite reporting a slightly better than expected fourth-quarter operating loss on Friday.

Rig operators are suffering in an already oversupplied market, with oil firms delaying or cancelling projects to save cash after a 10-year spending spree and a significant fall in crude prices since June.

“We expect more rigs to leave the Norwegian Continental Shelf and be stacked going forward,” the company said in a statement.

Songa, which operates three rigs under long-term contract with oil and gas company Statoil, said the final delivery schedule of four new vessels next year had been agreed broadly in line with previous expectations.

It estimated the average rig cost for the new-builds at $685 million, compared with a previous estimate of $660 million plus 2-3 percent.

The company posted a loss of $6.8 million before interest and tax, beating forecasts for a loss of $7.3 million in a Reuters poll of analysts.

Shares in the company were down 2.5 percent by 0802 GMT underperforming a 0.3 percent rise in Oslo’s benchmark index . (Reporting by Stine Jacobsen; Editing by David Goodman)

(c) 2015 Thomson Reuters, All Rights Reserved

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