Ocean Rig UDW (ORIG) Tops Q2 Views, Says Market 'Remain Extremely Negative'; to Review Capital Structure and Alternatives

August 11, 2016 4:16 PM EDT
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Ocean Rig UDW (NASDAQ: ORIG) reported Q2 EPS of $1.83, $1.11 better than the analyst estimate of $0.72. Revenue for the quarter came in at $452.6 million versus the consensus estimate of $376.45 million.

"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."

For earnings history and earnings-related data on Ocean Rig UDW (ORIG) click here.

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