Highlights Second Quarter 2016
- Operating revenue in Q2 2016 was USD 61.5 million (Q2 2015 - USD 99.4 million).
- EBITDA in Q2 2016 was USD 29.1 million (Q2 2015 - USD 52.1 million).
- Net loss in Q2 2016 was USD 7.4 million (Q2 2015 - profit of USD 13.7 million).
- On April 14, 2016 Sevan Developer exercised the second six-month option of the delivery deferral agreement with Cosco Shipyard, which extends the deferral period to October 15, 2016.
- On April 29, 2016 the Company announced the extension of the revolving credit facility ("RCF") with Seadrill Limited to December 31, 2017 and amendments to certain covenants in its bank facility.
Subsequent Events
- On August 25, 2016 Birgitte Ringstad Vartdal and Svend Anton Maier resigned as Directors of the Company. Per Wullf was appointed Chairman and Georgina Sousa was appointed as Director.
Financial performance summary
For the three months ended June 30, 2016
Operating revenue
Operating revenue was USD 61.5 million compared to USD 99.4 million in Q2 2015. The decrease in revenue is primarily due to the Sevan Driller being idle until it commenced a well service program at a lower rate during the quarter and Sevan Brasil at a reduced day rate for the full quarter. The Sevan Louisiana achieved a Q2 2016 technical utilization of 96.9% (93.8% in Q2 2015), Sevan Brasil technical utilization while operating under contract was 99.5% (98.9% in Q2 2015) and Sevan Driller technical utilization while on contract was 99.4% (91.0% in Q2 2015)
Total Operating expenses
Total operating expense was USD 49.0 million compared to USD 66.4 million in Q2 2015. Vessel operating expenses were USD 27.8 million compared to USD 43.2 million in Q2 2015. The decrease is mainly attributable to Sevan Driller being idle for part of the quarter and lower operating costs due to continued cost saving initiatives across the fleet. General and administrative costs were USD 3.8 million compared to USD 3.9 million in Q2 2015. Depreciation expenses were USD 16.6 million compared to USD 19.1 million in Q2 2015.
Net financial items
Net financial items amounted to USD 18.5 million in Q2 2016 compared to USD 17.3 million in Q2 2015. Interest and commitment fees on the Revolving Credit Facility ("RCF") with Seadrill increased by USD 1.4 million. Interest expenses on the secured bank loan facility decreased by USD 0.1 million.
Net loss for Q2 2016 was USD 7.4 million compared to a net profit of USD 13.7 million in Q2 2015.
For the six months ended June 30, 2016
Operating revenue
Operating revenue was USD 114.3 million for the six months ended June 30, 2016 compared to USD 182.5 million for the comparative period in 2015. The decrease in revenue is primarily due to the Sevan Driller being idle until it commenced a well service program at a lower rate during the second quarter and Sevan Brasil at a reduced day rate for the first half of 2016.
Total Operating expenses
Total operating expense was USD 106.5 million compared to USD 129.7 million in th comparative period in 2015. Vessel operating expenses decreased by USD 22.5 million primarily due to Sevan Driller being idle for most of the first half of 2016 in addition to lower operating costs due to continued cost saving initiatives across the fleet. General and administrative costs increased by USD 1.4 million due additional corporate activities part of which are reflected through higher costs from external advisers and in management services.
Net financial items
Net financial items amounted to USD 35.3 million compared for the six months ended June 30, 2016 compared to USD 34.7 million in 2015. Interest and commitment fees on the Revolving Credit Facility ("RCF") with Seadrill increased by USD 1.1 million.
Net loss was USD 27.8 million for the six months ended June 30, 2016 compared to a net profit of USD 15.9 million for the comparative period in 2015.
Balance sheet
Cash and cash equivalents amounted to USD 31.6 million as of June 30, 2016 compared to USD 42.4 million as of December 31, 2015. During Q2 2016, interest and principal payments under the debt facility and RCF were USD 13.9 million and USD 105.0 million, respectively.
As of June 30, 2016, USD 160.0 million was drawn on the RCF after repayments were made in the quarter.
Sevan Drilling Limited ("Sevan Drilling") 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 22 33 00 00
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.
