Highlights
- ProSafe presents its best quarterly result so far:
- Operating revenues increased by 33% to MNOK 573 over the prior year quarter.
- Operating profit increased by 211% to MNOK 146 over the prior year quarter.
- Ocean Oil extends its charter of Safe Lancia by 14 months. Value MUSD 14.
- Ocean Oil extends its charter of Safe Jasminia by 91 days. Value MNOK 29.
- ProSafe sells the drillship Discoverer 1 to Seatankers Management for MNOK 100.
- Statoil awards letter of intent for the upgrading of the drilling unit on Gullfaks C. Value MNOK 44.
- Statoil extends the flotel contract on Åsgard by 1 month. Value MUSD 3.
- Norsk Hydro awards upgrading contract on Oseberg C. Value MNOK 21.
- Umoe awards contract for delivery of mud equipment on Oseberg C. Value MNOK 28.
(Figures in brackets refer to 2nd quarter 1999 figures)
Summary
In the 2nd quarter, ProSafe made an operating profit of MNOK 146 (MNOK 47). The increase in operating profit over the prior year quarter is due to all time high profits within Offshore Support Services. The fleet utilisation increased by 31%-points to 91%. The other business areas showed, as expected, a reduction in profits due to lower activity levels.
Profit after taxes totalled MNOK 112 (MNOK 27) in the 2nd quarter, whilst the cash flow amounted to MNOK 167 (MNOK 70). The accounts are charged MNOK 13 in unrealised currency loss on the company’s long term USD loan.
In the 2nd quarter, profit and cash flow per share equalled NOK 4,26 (NOK 1,03) and NOK 6,35 (NOK 2,72) respectively. Adjusted for the unrealised currency loss, profit per share equalled NOK 4,76.
In the 1st half of the year, operating profit totalled MNOK 201 (MNOK 74), profit after taxes MNOK 112 (MNOK 28) and profit and cash flow per share NOK 4,27 (NOK 1,10) and NOK 6,41 (NOK 5,90) respectively.
Business Areas
In the 2nd quarter, Offshore Support Services made an operating profit of MNOK 152 (MNOK 32). This is all time high profits for this business area. The fleet utilisation was 91% which is 31%-points over the prior year quarter. Safe Britannia and Safe Caledonia were contracted to Statoil and Shell UK respectively on the 24th and the 26th of April, and operations are carried out as expected.
In the 2nd quarter, Offshore Drilling & Related Services made an operating profit of MNOK 10 (MNOK 23). The decrease in operating profit over the prior year quarter is due to less extra work on existing contracts and in general lower activity levels, also within related services. Further, the shortfall of the Valhall operation has had a negative impact on profits. During the 2nd quarter, the lightweight rig Rubicon was under mobilisation for the job at Snorre TLP for Norsk Hydro. The low activity level is considered to be a non-permanent situation, and the activity level will increase already in the 3rd quarter in connection with the start up of the Rubicon operation and also the drilling operation at Oseberg South.
In the 2nd quarter, Technology & Engineering made an operating loss of MNOK 10 (MNOK 0). The operating loss is due to low activity levels. However, bidding activity has been high. The order backlog as at the end of the period totalled MNOK 116.
Prospects
Within the Offshore Support Services business area the market has already picked up. Towards year-end, Safe Caledonia will mobilise for a 9-month contract for Ocean Oil for work on the Cantarell field off Mexico. Polycrown will complete its contract at Statfjord this year. Safe Jasminia is contracted to Mexico until mid September this year, while Safe Regency is contracted until the end of November this year. ProSafe has an optimistic view with regard to an extension of these contracts. Safe Lancia is contracted to Mexico until August 2001. At the beginning of 2001, ProSafe expects to have at least 4 rigs located in Mexico. ProSafe expects to have a high utilisation of the fleet also after 2000.
Offshore Drilling & Related Services has a positive view on the possibility of new drilling assignments in connection with the start up of developments such as Ringhorn, Kvitebjørn and Grane, and also more additional work based on the expectation of a general increase in activity levels as from the 3rd and 4th quarter. The revised start up for the Rubicon at Snorre TLP for Norsk Hydro is set at the beginning of August. Currently, ProSafe is in the process of starting the drilling operation on Oseberg South. Therefore, the activity level is expected to be higher in the 2nd half compared to the 1st half of 2000.
The business within Technology & Engineering has been most effected by the low activity level within the offshore sector. The marketing and bidding activity is however high, and the market prospects for the Norwegian part of the North Sea is in general positive.
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