Second Quarter 2016 Financial Highlights
- For the second quarter of 2016, the Company reported a net income of $156.1 million, or $1.83 basic and diluted earnings per share.
- The Company reported Adjusted EBITDA(1) of $326.5 million for the second quarter of 2016.
Recent Highlights
- On August 11, 2016 we reached an agreement with Samsung Heavy Industries (“SHI”) related to the construction of our three drillships which provides for the re-scheduling of certain installments, the postponement of the delivery of the first two of these drillships currently under construction and the amendment of certain other terms (including the contract price).
- The Leiv Eiriksson completed, as planned, its 15-year class survey and scheduled equipment and winterization upgrades related to its next contract, and on July 18, 2016 mobilized on location in Norway to commence its previously announced contract with Lundin Norway AS.
- On June 16, 2016, we reached an agreement with Repsol Sinopec to terminate the contract of the Ocean Rig Mylos operating offshore Brazil against full payment of the remaining backlog.
- On April 27, 2016, we reached agreement with ENI to settle the dispute related to the termination of the contract of the Ocean Rig Olympia against a total payment of $54 million and the extension by 81 days for the contract of the Ocean Rig Poseidon at a daily gross operating rate of $115,000.
(1) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income
George Economou, Chairman and Chief Executive Officer of the Company, commented:
“Despite the continued positive operational performance of the Company (fleet utilization for the second quarter of 96.3\%) the market conditions remain extremely negative. Oil companies continue to reduce their offshore budgets and as more floaters come off contract in the next six months, an already grossly oversupplied market is expected to worsen. In this current and anticipated poor market environment which we expect to persist for an extended period of time, we believe it is prudent to focus on maintaining liquidity and de-levering the Company.
Given the ongoing distressed market environment as well as the consensus view that a recovery may not occur for several years, we have engaged financial and legal advisors to assess the viability of our capital structure and alternatives that may be available to pursue. In the recent period, we have been approached by several of our debt holders who have in certain cases also retained legal counsel and financial advisors. While we have not made any specific decisions, it is evident to the Company and a number of its creditors that its debt obligations will need to be amended or exchanged for new debt and/or equity securities, and some debt holders may have little or no recovery on their investment. We continue to explore and consider alternatives, which may include a possible reorganization under US bankruptcy laws or another jurisdiction, so that we can ride out this very difficult cycle with feasible prospects for strong, long-term success.”
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