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Sevan Drilling Ltd: Sevan announces second quarter 2015 results

Highlights Second Quarter 2015

  • Operating revenue in Q2 2015 was USD 99.4 million (Q2 2014 - USD 88.6 million).
  • EBITDA in Q2 2015 was USD 52.1 million (Q2 2014 - USD 40.8 million).
  • Net profit in Q2 2015 was USD 13.7 million (Q2 2014 - USD 9.2 million)
  • Sevan Drilling completed the Migration of its parent company from Sevan Drilling ASA to Sevan Drilling Limited, incorporated in Bermuda. The old parent company was delisted from the Oslo Stock Exchange, and the new parent company began trading on 30th June 2015. The group continues to use the ticker "SEVDR".
  • Following the Migration the Board of the Bermuda parent company needed to be reconstituted to have majority non-Norwegian residents, and on 26 August, after approval of the Q2 2015 Interim Financial Report, Mr Erling Lind resigned as Chairman and Director. Ms Birgitte Ringstad Vartdal was appointed to replace Mr Lind as Chairman.
  • The Board is pleased to announce the appointment of Svend Anton Maier as a Director of the Company to fill the vacancy.  Mr Maier is the Senior Vice President, Americas in the Seadrill Group.

 

Financial performance summary

 

For the three months ended June 30, 2015

Operating revenue

Operating revenue was USD 99.4 million compared to USD 88.6 million in Q2 2014. The revenue increase is explained by a full quarter of operations of the Sevan Louisiana, which commenced operations in May 2014 and operating for the full period in 2015. The Sevan Louisiana achieved a Q2 2015 technical utilization of 93.8% (89.9% in Q2 2014), Sevan Driller technical utilization was 91.0% (94.7% in Q2 2014), and Sevan Brasil technical utilization was 98.9% (98.2% in Q2 2014).

Operating expenses

Total operating expense was USD 66.4 million compared to USD 64.3 million in Q2 2014. The increase is the result of Sevan Louisiana operating in this quarter compared to the prior year, offset by reductions in operating expenses realized across the fleet.  Average operating costs per day per rig remained lower compared to historical averages, as the Company continued executing cost savings initiatives that began early this year.  General and administrative costs reduced to USD 3.9 million compared to USD 5.6 million in Q2 2014, from conclusion of the integration and restructuring. Depreciation expense increased compared to Q2 2014 as a consequence of Sevan Louisiana in service for the full period in Q2 2015.

Net financial items

Net financial items amounted to USD 17.3 million in Q2 2015 compared to USD 14.4 million in Q2 2014. Interest and commitment fees on the Revolving Credit Facility with Seadrill ("RCF") increased by USD 2.3 million.

Net profit for Q2 2015 was USD 13.7 million compared to a net profit of USD 9.2 million in Q2 2014.

 

For the six months ended June 30, 2015

Operating revenue

Operating revenue was USD 182.5 million for the six months ended June 30, 2015 compared to USD 148.7 million for the comparative period in 2014. The revenue increase is due to the Sevan Louisiana commencing operations in May 2014 and operating for the full period in 2015.

Operating expenses

Total operating expense was USD 129.7 million for the six months ended June 30, 2015 compared to USD 123.6 million for the comparative period in 2014. In the first half 2015, operating expenses increased with USD 7.7 million mainly explained by Sevan Louisiana operating for the full 2015 period, offset through cost savings initiatives across the fleet. General and administrative costs were USD 3.5 million lower from conclusion of the integration and restructuring. Depreciation expense increased as a consequence of Sevan Louisiana in service in the full period.

Net financial items

Net financial items amounted to USD 34.7 million for the six months ended June 30, 2015 compared to USD 25.9 million for the comparative period in 2014. This is explained by increased interest and commitment fees on the RCF of USD 5.2 million and interest expense increased USD 2.7 million mainly due to no interest being capitalized in 2015 due to the Sevan Louisiana being completed.

The net profit was USD 15.9 million for the six months ended June 30, 2015 compared to a net loss of USD 1.2 million for the comparative period in 2014. 

Balance sheet

Cash and cash equivalents amounted to USD 31.5 million as of June 30, 2015 compared to USD 30.2 million as of December 31, 2014. 

During Q2 2015, interest and principal payments under the debt facility and RCF were USD 11.6 million and USD 35.0 million, respectively. As of June 30, 2015, USD 160.0 million was drawn on the RCF.

Sevan is preparing its accounts on the assumption that the company is a going concern. Liquidity remains sensitive to performance of the rigs under their contracts, the continued availability of the RCF, and other market conditions.

 

 

 For further information, please contact:

Scott McReaken, CEO, Sevan Drilling Management AS

+47 91194651 mobile

 

About Sevan Drilling:

Sevan Drilling Limited is an international offshore drilling contractor specializing in the ultra deepwater segment. Sevan Drilling Limited is listed on Oslo Børs.

 

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Sevan Drilling Ltd Q2 2015 Report

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