Diamond Offshore Drilling Inc, a major player in offshore drilling, publishes its financial results for the second quarter of 2024, demonstrating notable robustness despite significant operational challenges. With an adjusted EBITDA of 58 million USD, the company manages to maintain financial stability while dealing with costly repairs and declining revenues.
Q2 2024 financial results
Diamond Offshore reported second-quarter revenues of USD 253 million, down from USD 275 million in the previous quarter.
This decrease was mainly due to the absence of revenues from the West Auriga, which was returned to its owner following charter termination, and the temporary shutdown of the Ocean GreatWhite for repairs.
However, this decrease was partially offset by USD 8.7 million in performance bonuses earned in Senegal.
Contract drilling expenditure amounted to USD 164 million, a reduction of USD 20 million on the previous quarter.
This was due to lower operating costs at West Auriga and the recovery of costs related to the Ocean GreatWhite incident.
General and administrative costs rose to 23 million USD, including financial and legal advisory fees associated with the announced merger with Noble Corporation plc.
New contracts and operational prospects
Diamond Offshore secures a two-year contract extension for the Ocean Blackhawk, adding 350 million USD to the order book.
In addition, subsequent to the end of the quarter, the Ocean BlackRhino secures a contract worth 89 million USD for a minimum of 180 days in the Gulf of Mexico.
These new awards bring the total value of contracts secured in 2024 to almost 1.2 billion USD, with a total backlog exceeding 2 billion USD as of July 1, 2024.
An early termination notice for a campaign offshore Côte d’Ivoire allows the company to retain USD 8 million in prepaid deposits.
This termination demonstrates Diamond Offshore’s flexibility in managing contractual contingencies.
Operating performance and repairs
Diamond Offshore platforms maintain outstanding operational performance, with revenue efficiency averaging 95% for the third consecutive quarter, excluding the Ocean GreatWhite incident.
The Ocean BlackHawk and Ocean BlackRhino platforms accumulate USD 20.5 million in performance bonuses in Senegal, reflecting the efficiency and safety of their operations.
Repairs to the Ocean GreatWhite have been completed, and the platform resumed operations in the North Sea in early July.
Repair costs are covered by the company’s insurance, with an expected recovery of 90 days of lost revenue through business interruption insurance.
This effective incident management demonstrates Diamond Offshore’s operational resilience.
Sector outlook and analysis
Second-quarter results show that Diamond Offshore continues to successfully navigate a complex business environment, balancing operational challenges with growth opportunities.
Securing new contracts and managing contractual contingencies are strengthening the company’s position in the global offshore drilling market.
The outlook for the rest of the year remains positive, with promising projects and contracts underpinning Diamond Offshore’s continued growth.
Operational efficiency and proactive management of repairs and costs demonstrate the company’s ability to maintain a solid performance in the face of industry challenges.
Diamond Offshore continues to show notable resilience, adapting its operations and securing strategic contracts, thus ensuring financial and operational stability in a volatile market.
