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Pacific Drilling S.A. has received a letter of award (LoA) for its Pacific Sharav deepwater drillship, as well as extending an existing contract for its Pacific Scirocco rig to two years.
The driller, announcing net income of $18.3 million on revenue of $117.4 million for first quarter 2012, said the Pacific Sharav received its LoA from an unspecified “major oil company” for a long term commitment. It added that it would provide more detail on the commitment in the coming weeks. The unit is currently being built at Samsung Heavy Industries in South Korea, and is due for delivery in September next year.
Houston-based Pacific’s results were much improved on the comparable quarter last year, when it suffered a net loss of $10.1 million.
Chief executive officer, Chris Beckett, said, “During the early part of 2012, demand for ultra-deepwater drillships continued to strengthen, as demonstrated by the acceleration in multi-year inquiries and contract awards with increasingly higher dayrates. We expect to see market demand exceed supply well into 2014.”
He added, “These positive market dynamics supported our decision to order a seventh drillship, scheduled for delivery May 2014.”
Regarding the company’s delivered drillships, Beckett added, “During the first quarter, the Pacific Scirocco and the Pacific Mistral started drilling operations in Nigeria and Brazil, respectively. Pacific Scirocco exceeded our expected efficiency, and our client, Total, has elected to extend the initial term of its contract to two years. We consider this a strong vote of confidence in our company’s performance from a leading deepwater operator. Pacific Mistral started its contract with Petrobras in February 2012, and after its start-up phase, we anticipate the rig will perform in line with our other two operating vessels. The Pacific Bora, in operation since August 2011, continued to deliver revenue efficiency above expectations in line with its 2011 performance. The Pacific Santa Ana, our fourth drillship, recently arrived in the U.S. Gulf of Mexico to start its five-year contract with Chevron.”
During first quarter 2012, Pacific invested $102 million in the construction of its fleet, including the initial payment for its seventh drillship. It estimates the remaining capital expenditures for its committed drillships at $1.6 billion.