Oil drilling firm loses $2.9m to naira devaluation

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Pacific Drilling, a global offshore drilling company with presence in Nigeria, said it lost a total of $2.9m as a result of the over 40 per cent devaluation of the naira.

Formed in 2010 as a joint venture between Pacific Drilling and Derotech Offshore Services Limited, Pacific International Drilling West Africa Limited is the Nigerian operating subsidiary of Pacific Drilling.

PIDWAL manages three rigs; Pacific Bora, Pacific Scirocco and Pacific Khamsin, Pacific Drilling said on its website

It said Pacific Scirocco remained under contract with Total E&P Nigeria Limited.

The company said its contract drilling revenue for the second quarter of 2016 was $203.7m, which included $12.7m of deferred revenue amortisation, compared to first-quarter 2016 contract drilling revenue of $205.4m, which also included $12.7m of deferred revenue amortisation.

It said, “Contract drilling revenue decreased in the second-quarter primarily as a result of the Pacific Scirocco being on an 80 per cent standby rate starting in May 2016.”

Pacific Drilling announced a net income for the second quarter of $8.2m or $0.39 per diluted share, compared to a net loss of $2.5m or $0.12 per diluted share for first-quarter 2016 and net income of $47.1m or $2.23 per diluted share for second quarter of 2015.

It said the increase in the second-quarter 2016 net income was primarily the result of a $14.2m gain on the extinguishment of $23.7m in principal amount of the company’s senior notes due 2017.

The company’s Chief Executive Officer, Chris Beckett, was quoted to have said, “Market conditions continue to be very challenging, with limited new tender opportunities and continued pressure on existing contracts. In this environment, it is increasingly important to deliver exceptional service to our customers and our second-quarter results evidence our success in doing so.”

He said the company’s operating fleet, including the Pacific Scirocco, continued to deliver excellent operational performance, including a third consecutive quarter with record revenue efficiency.

“Pacific Scirocco’s contract with Total continues to be in force and after a period of standby at reduced rate, on or about September 15, we expect the rig to restart operations in Nigeria for the remainder of its contract term,” Beckett said.

According to the statement, operating expenses for the second quarter were $76m, compared to $79m for first-quarter 2016.

It said, “Other expense for second-quarter 2016 of $3.8m includes an unusual $2.9m foreign exchange loss primarily due to the greater than 40 per cent devaluation of the Nigerian naira by the central bank in June.”

Source: Punch Newspaper

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