RUS | ENG | All
Укажите логин или email, которые вы использовали при регистрации.
Если вы не помните свой пароль - просто оставьте это поле пустым и вы получите новый, вместе со ссылкой на активацию.

Еще не зарегистированы?
Добро пожаловать!

2016-03-25 19:05:00

KCA DEUTAG LOSS $144.4 MLN

KCA DEUTAG LOSS $144.4 MLN

KCA Deutag Alpha Limited

Chairman's Statement

This has been an extremely challenging year for the oil and gas industry following the significant and prolonged falls in energy prices which started in mid- 2014. As a result of this, the industry has experienced significant reductions in new capital expenditure as well as pressures to reduce operating expenditure as projects have become marginal or even loss making as prices have declined.

The financial performance of the Group has been relatively strong compared to many industry peers, but due to the wider economic conditions both revenue and, to a lesser extent, profitability have declined year on year. Revenue during the year fell by 20.9% to $1,668.8 million (2014: $2,110.9 million) reflecting activity reductions as spending by our customers has reduced, pricing pressures, reduced spend on reimbursable type contracts and changes in mix between our business units. EBITDA decreased by 7.9% to $289.8 million over the same period as the impact of these lower revenues was offset by significant reductions made to our cost base. 

During 2015 we successfully completed the manufacture and delivery of our new build land rig programme, which had started in 2014, for 8 new rigs for customers in Russia, Oman and Brunei. At the year end all of these rigs were fully operational. Five rigs were delivered to BP in Oman with 3 rigs starting up operations in the first quarter and the final 2 rigs in October and December respectively. One rig was delivered to Brunei Shell Petroleum and started up operations in October, whilst in Russia our second new build rig for this market spudded in April with the other rig having been delivered in 2014. These new rigs have helped to mitigate reduced activity in some of the Land business unit’s other markets (such as Europe, Nigeria and Kurdistan) and should also provide some security over utilisation in 2016. 

As a result of the fall in commodity prices and the cancellation or delay of many projects by our clients there has been a lower level of tendering activity than in recent years. One key award was the retention of our contract in our Platform Services business unit for 7 offshore platforms operated by BP in the Caspian Sea. In conjunction with this RDS was also awarded the contract by BP to provide engineering support services for projects in the Caspian Sea. These 2 contracts have a combined value of $360 million for the initial contract period, and $1 billion including all options. 

In May Bentec announced awards for 3 new generation arctic cluster slider rigs for a customer in Russia as well as its first drilling rig for offshore Caspian operations for Nobel Oil Limited. This state of the art rig will be installed on an existing platform offshore Azerbaijan in the Caspian Sea during 2016. The offshore drilling package will include the recently launched 750 ton top drive and the new 3000hp drawworks. 

These new contract awards were welcome news amidst a very difficult market for our services. However, despite these very difficult conditions we were able to show year on year growth in EBITDA in two of our five business units. Throughout the year we focused heavily on managing our costs particularly for discretionary spend and non-rig based personnel. Our cost reduction efforts have helped to offset the impact of reduced revenues and activity levels. 

Although there was a year on year reduction in Land business unit revenues, we were able to deliver increased EBITDA. Mobilisation of the new rigs in Oman, Russia and Brunei added significant new capacity to our fleet at satisfactory day rates. The utilisation of rigs in our key markets of Russia, Oman and Algeria has remained relatively robust helping to offset significant reductions in Kurdistan, Europe and West Africa. We were also able to win and start up new contracts for our existing rig fleet in the UAE, Algeria and South Iraq during the year. 

Platform Services performed steadily but saw a reduction in both revenues and EBITDA compared to 2014 largely as a result of cost pressures from our clients. Most of these contracts are reimbursable in nature and in the majority of cases we were able to deliver cost savings which offset some of the impact on our margins. We did experience some clients shutting down platform activities, particularly in the UK and Angola, and we have reduced our headcount in these markets. 

Bentec came into 2015 with a relatively healthy order backlog. We successfully completed the delivery of a 7 rig order for an Algerian drilling contractor which included a range of ancillary equipment. New orders received for rigs in Russia and Azerbaijan also helped to keep our manufacturing facilities at reasonable utilisation levels through the year. Component sales activity was also buoyed by orders received in late 2014 and the first half of 2015. After sales revenues held up relatively well, reflecting increased volumes of Bentec equipment sold in earlier periods that are now requiring periodic overhaul and spare parts. 

RDS, our drilling rig design and engineering specialist, showed significantly lower levels of activity and EBITDA compared to 2014. As a result of the fall in oil and gas prices, investment in new projects, particularly new greenfield projects, by E&P companies has fallen considerably and there are limited tendering opportunities becoming available for RDS to secure new work in this area in the near future. 

We continued to work on completing greenfield projects awarded before the downturn but manning gradually reduced over the year. Brownfield activity levels have been less severely impacted but competition, pricing and limited availability of new work have also impacted this business. The focus in RDS has been to reduce our costs base in line with activity whilst retaining key capability and ability to tender and compete for new work as and when it arises. 

There were further developments in our MODU business in 2015. Following the sale of our three self-erect tender barges in 2014, we subsequently completed the sale of our jack-up drilling unit, the Ben Loyal in December last year. The rig had been due for a special periodic survey this year and had been operating in the Gulf of Mexico through the first half of 2015 although it was off day rate for a period due to a rapid penetration incident causing damage to one of the legs which required repairs. Most of these costs were covered by insurance. Our remaining jack-up rig, the Ben Rinnes, continued to operate for Sonangol in Angola throughout 2015. 

Set within this difficult and challenging operating environment our strategy has not changed. We continue to focus on our core operations as one of the world’s leading drilling and engineering contractors working onshore and offshore, recognising the importance of safety, quality and operational performance in all that we do. Whilst there has been limited opportunity to grow the business over the past year we have focused our attention on service delivery and cost reductions across each of our business units. 

The financial results of the Group for the year ending 31 December 2015 are as follows:

 

KCA DEUTAG RESULTS 2015

 

KCA DEUTAG RESULTS 2015

 

KCA DEUTAG RESULTS 2015

 

kcadeutag.com

-----

More: 

THE NEW RUSSIAN EMPIRE - 10 

INEOS BUYS FROM RUSSIA: $750 MLN 

BRITAIN NEED NOT RUSSIA 

RUSSIA SEEK REVIEW 

BP & RUSSIA: $10 BLN 

KCA DEUTAG BARELY ALIVE

 

 

Tags: KCA DEUTAG, DRILLING, OIL, GAS