Highlights
- Statoil awards ProSafe a 120 days contract at a value of MNOK 110 for the use of Safe Britannia on Åsgard.
- Shell extends the contract for the use of Safe Caledonia at Shearwater by 60 days. Revised contract value amounts to MGBP 5,1-5,6.
- Ocean Oil awards ProSafe a letter of intent for the use of Safe Caledonia on the Cantarell-field off Mexico. The bareboat-contract has a duration of 9 months and a value of MUSD 10.
- ProSafe and Global Maritime develop a new decommissioning concept for the removal of offshore installations. The concept is based on the use of ProSafe’s rigs.
(Figures in brackets refer to 1st quarter 1999)
Summary
In the 1st quarter ProSafe made an operating profit of MNOK 55 (MNOK 27). The increase in operating profit is due to increased earnings within Offshore Support Services. Offshore Drilling & Related Services showed a small reduction in operating profit due to lower activity levels. Technology & Engineering showed an operating result of –MNOK 5, which represents an improvement compared to the same period last year.
In the 1st quarter profit after taxes and cash flow equalled MNOK 0 (MNOK 2) and MNOK 1 (MNOK 82) respectively. In connection with the revaluation of the company’s USD loans, a currency loss of MNOK 58 was charged to the accounts. This currency loss is a result of the weakening of the NOK exchange rate compared to the USD. A strong USD is however generally positive to ProSafe since major parts of its revenues are generated in USD and as the major assets are valued in USD. Adjusted for the currency loss, profit for the period amounted to MNOK 58. During the 1st quarter ProSafe sold its shares in Ocean Rig ASA. This sale had a positive impact on profits of MNOK 20.
In the 1st quarter profit and cash flow per share equalled NOK 0,02 (NOK 0,06) and NOK 0,03 (NOK 3,18) respectively. Adjusted for the currency loss on ProSafe’s USD loans, profit per share equalled NOK 2,23.
Business Areas
In the 1st quarter Offshore Support Services made an operating profit of MNOK 56 (MNOK 33). The utilisation ratio of the rigs equalled 67% which is in line with last year. The increase in operating profit is due to Polycrown which was acquired from the Statfjord-licensees in November 1999. During the 1st quarter, Safe Britannia and Safe Caledonia were under mobilisation for assignments for Statoil on Åsgard and Shell on Shearwater respectively. All of ProSafe’s rigs will be on contract as from 1 May.
In the 1st quarter Offshore Drilling & Related Services made an operating profit of MNOK 13 (MNOK 15). The results generated from drilling and related services were, as expected, reduced as a result of less additional work and lower activity levels. The lightweight rig Rubicon was under mobilisation for the assignment on Snorre TLP for Norsk Hydro. This contract will commence 15 July this year.
In the 1st quarter Technology & Engineering showed an operating result of -MNOK 5 (-MNOK 9). The operating loss is due to low activity levels. The level of costs has been considerably reduced compared to last year as a result of the restructuring of Consafe. The order backlog equalled MNOK 44 at the end of 1st quarter.
Prospects
The offshore industry is again facing a period of stabile high oil prices and a general optimism. As expected, this has not lead to a significant increase in activity levels in the first quarter, and ProSafe expects increased activity as from the 2nd quarter this year. The 16th licensing round which resulted in the award of operating rights to more foreign companies and also a reduced governmental participation in several licenses is expected to make the Norwegian Continental Shelf more attractive and therefore lead to higher activity levels.
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