Ocean Rig UDW (ORIG) Misses Q2 EPS by 32c

Ocean Rig UDW (NASDAQ: ORIG) reported Q2 EPS of ($0.14), $0.32 worse than the analyst estimate of $0.18.

“We remain focused on keeping costs down and growing our backlog. We believe our balance sheet is the cleanest in the industry and, with the negotiations related to the drilling contract for the Ocean Rig Skyros now finalized, our backlog remains solid. This provides the Company with the maximum flexibility to wait for a market upturn. Additionally, as recently announced, the Ocean Rig Poseidon will be continuously employed from September this year into Q1 2019. We are in discussions to enter additional drilling contracts to extend the employment of the Ocean Rig Poseidon and for new employment relating to the Ocean Rig Mykonos and the Ocean Rig Corcovado, both of which are currently hot stacked.

"Brent oil prices have stayed north of $70 per barrel since April 2018 and oil demand remains robust and we see the quarterly results of many of our customers that show they are cashflow positive even after dividends, which suggests that there is room for further capital expenditures. We are starting to see signs of increased spending in the offshore sector as tenders and requests for information keep coming in. Based on market reports this is the highest level of market enquiry since 2012. While we do not expect any material changes in drilling rates in the near future we project better utilization of the floater fleet and eventually a rate recovery in 2019. We believe that we are well positioned for a recovery in the floater market whenever this occurs.”

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

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