Highlights
- Operating revenue of $194.3 million.
- Operating income of $18.2 million.
- Net loss of $16.3 million.
- Adjusted EBITDA of $96.9 million.
- Cash and cash equivalents of $859.6 million.
- Economic utilization of 93%. Excluding downtime for planned maintenance, utilization was 98%.
- Order backlog of $1.3 billion as of May 24, 2018.
- 10 cent per common unit distribution for the first quarter of 2018.
Financial Results Overview
Total operating revenues for the first quarter were $194.3 million (4Q17: $256.3 million). The decrease was primarily due to a full quarter of idle time for the West Polaris, the West Vencedor becoming idle during the quarter and idle time on the West Auriga related to planned maintenance. These were partially offset by a full quarter of operations for the West Capella in Gabon.
Total operating expenses for the first quarter were $176.1 million (4Q17: $200.8 million). The decrease was primarily due to fewer rigs in operation and lower amortization expenses related to the conclusion of the West Polaris contract.
Operating income was $18.2 million (4Q17: $60.1 million). The decline was primarily related to the movements referred to above and a gain from the reduction in West Polaris contingent liabilities recognized in the fourth quarter of 2017 not being repeated in the first quarter.
Net financial items resulted in an expense of $25.9 million (4Q17: expense of $27.6 million). The decrease in the expense was primarily due a gain on the mark to market valuation of derivatives of $29.0 million (4Q17: gain of $12.8 million), partially offset by an increase in interest expense and advisory fees related to the amendments on our Term Loan B.
Loss before tax was $7.7 million (4Q17: income of $32.5 million). Income tax expense was $8.6 million (4Q17:credit of $0.6 million), reflecting taxes payable in the first quarter and provisions taken for the expected tax expense for the year.
Net loss was $16.3 million (4Q17: net income of $33.1 million). Seadrill Partners LLC Members had a net loss for the quarter of $3.2 million (4Q17: net income of $26.5 million).
While there was no Distributable Cash Flow for the quarter, the Company declared a 10 cent per common unit distribution based upon improving activity in the offshore drilling market, our liquidity position and the recent conclusion of the TLB leverage covenant waiver and maturity extensions of the bank facilities.
