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Sevan Drilling Ltd: Sevan announces fourth quarter 2016 results

Highlights Fourth Quarter 2016

  • Economic Utilization of 98.4%
  • Operating revenue of USD 63.4 million
  • EBITDA of USD 29.3 million
  • Net loss of USD 12.1 million

Financial performance summary

For the three months ended December 31, 2016

Operating revenue

Operating revenue was USD 63.4 million (Q4 2015: USD 85.9 million). The decrease in revenue is primarily due to the Sevan Driller being idle during Q4 2016, in addition to the Sevan Brasil operating at a lower day rate during 2016. Loss of hire revenue was recovered relating to an insurance claim for downtime events on the Sevan Louisiana in 2014, contributing USD 4.9 million of revenue. The Sevan Louisiana achieved a Q4 2016 technical utilization while on contract of 98.7% (Q4 2015: 97.6%), Sevan Brasil 99.8% (Q4 2015: 98.4%). The Sevan Driller was idle in Q4 2016, technical utilization for the days on contract in Q4 2015 was 100.0%.

Total Operating expenses

Total operating expenses were USD 53.8 million (Q4 2015: USD 264.0 million). Vessel operating expenses were USD 28.1 million (Q4 2015: USD 46.2 million). The decrease is mainly attributable to the Sevan Driller being idle during the quarter and lower operating costs due to continued cost saving initiatives across the fleet. General and administrative costs were USD 6.1 million (Q4 2015: USD 3.8 million) mainly due to higher management service fees.  Depreciation and amortization was USD 19.7 million (Q4 2015: USD 18.5 million).

Net financial items

Net financial items amounted to USD 16.8 million in Q4 2016 (Q4 2015: USD 15.0 million).  Interest and commitment fees on the Revolving Credit Facility ("RCF") with Seadrill increased by USD 1.0 million. Interest expenses on the secured bank loan facility increased by USD 0.7 million. The increase on both facilities was driven by the rising LIBOR rate in 2016.

Net loss for Q4 2016 was USD 12.1 million (Q4 2015: USD 194.1 million).

 

For the twelve months ended December 31, 2016

Operating revenue

Operating revenue was USD 237.3 million for the twelve months ended December 31, 2016 (2015: USD 366.8 million). The decrease in revenue is primarily due to the Sevan Driller operating for three months on a well service program at a lower day rate and being idle for nine months in total for the year. The Sevan Brasil operated at a reduced day rate for the last ten months of 2016. 

Total Operating expenses

Total operating expenses were USD 253.9 million (2015: USD 450.4 million). Vessel operating expenses decreased by USD 38.9 million, primarily due to lower operating costs during the idle time on the Sevan Driller in addition to continued cost savings across the fleet. General and administrative costs increased by USD 4.1 million due to additional corporate activities part of which are reflected through higher management service fees and costs from external advisor's. Depreciation and amortization was USD 70.4 million (2015: USD 73.9 million), the decrease was driven by the impairment recognized in Q3 2016.

A non-cash impairment charge of USD 37.5 million was recognized in 2016 (2015: USD 196.5 million).

Net financial items

Net financial items amounted to USD 69.0 million for the twelve months ended December 31, 2016 (2015: USD 67.3 million).  Interest and commitment fees on the Revolving Credit Facility ("RCF") with Seadrill Limited ("Seadrill") increased by USD 1.9 million. The increase is driven by the rising LIBOR rate in 2016.

Net loss was USD 93.0 million for the twelve months ended December 31, 2016 compared to a net loss of USD 151.8 million for the comparative period in 2015.

Balance sheet

Cash and cash equivalents amounted to USD 26.0 million as of December 31, 2016 (2015: USD 42.4 million).  During Q4 2016, interest and principal payments under the debt facility were USD 35.0 million. Interest payments of USD 12.2 million were made under the RCF. As of December 31, 2016, USD 185.0 million was drawn on the RCF after repayments were made in the quarter.

 

For further information, please contact:

Scott McReaken, CEO, Sevan Drilling Management AS

+47 22 33 00 00 


About Sevan Drilling:

Sevan Drilling Ltd 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 Q4 2016

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