Paragon gets early termination in Middle East. Shrinks loss in 3Q

Drilling contractor Paragon Offshore has received an early termination for one of its jack-up rigs operating in the Middle East. 

In its latest fleet status report, Paragon said on Tuesday that the jack-up rig M1162 has received an early termination notice from NDC (ADMA-OPCO).

The company added it was in discussions with the client regarding the original extension period. The effective end date for this contract was late October 2016. The rig is currently in the shipyard for scheduled maintenance.

To remind, back in April 2016, ADMA-OPCO awarded a contract extension for the 1979-built jack-up rig Paragon M1162 that was supposed to last from mid-January 2017 to late January 2019.

Also on Tuesday, Paragon  posted a smaller net loss for the 3Q 2016 period when compared to the corresponding period in 2015. Namely, the driller’s net loss for this year’s quarter was $63.6 million as compared to third quarter 2015 net loss of $1.08 billion.

Total revenues for the third quarter of 2016 were $125.1 million compared to $368.97 million in the third quarter of 2015.

Paragon reported that utilization for its marketed rig fleet declined to 34 percent for the third quarter of 2016 compared to 38 percent for the second quarter of 2016. Average daily revenues declined 19 percent in the third quarter of 2016 to $109,000 per rig compared to the previous quarter average of $135,000 per rig. Contract drilling services costs declined 7 percent in the third quarter of 2016 to $85.1 million compared to $91.6 million in the second quarter of 2016.

Paragon’s total contract backlog at September 30, 2016 was approximately $365 million compared to $472 million at June 30, 2016.

Utilization of Paragon’s marketed floating rig fleet increased to 40 percent in the third quarter of 2016 when compared to the 35 percent utilization achieved in the second quarter of 2016. The increase in marketed utilization in the third quarter of 2016 reflects the removal of the Paragon MSS2 from the marketed fleet offset by fewer operating days on the Paragon DPDS3 which was released by Petrobras in August 2016.

Utilization of Paragon’s marketed jackup rig fleet was lower at 34 percent in the third quarter compared to the 39 percent utilization in the second quarter of 2016 as a number of rigs completed contracts during the third quarter.

Offshore Energy Today Staff