Profitability of offshore rigs continues to improve

Houston-based offshore drilling contractor Global Marine Inc. reports its Summary of Current Offshore Rig Economics (SCORE) for October increased to 34.8, up 2.9% from September. October's SCORE is up 49.7% from the same month a year ago and is down 23% from the same month 5 years ago.


Houston-based offshore drilling contractor Global Marine Inc. reports its Summary of Current Offshore Rig Economics (SCORE) for October increased to 34.8, up 2.9% from September.

SCORE compares the profitability of current mobile offshore drilling rig rates with the profitability of rates at the 1980-81 offshore drilling cycle peak, when speculative rig construction was common. Global Marine's SCORE then averaged 100%, and new contract day rates equaled the sum of daily cash operating costs plus $700/day per million dollars invested. SCORE reflects current rig day rates as a percentage of the estimated rate required to justify building new rigs on speculation.

October's SCORE is up 49.7% from the same month a year ago and is down 23% from the same month 5 years ago.

Global Marine Chairman, President and CEO Bob Rose said, "An increase of nearly 50% is an impressive recovery, yet at 34.8, SCORE suggests that we have a long way to go before economics justify widespread speculative building of rigs."

In the Gulf of Mexico, October's SCORE increased to 39.8, up 2.3% from September. The SCORE is 68.6% above October 1999's rating, and 4.2% above its level 5 years ago.

In the North Sea, the SCORE increased to 25.8, up 3.3% from September. The region's SCORE is up 27.8% for the 1-year period, and down 52.1% for the 5-year period.

Off West Africa, October's SCORE was 39.4, down 0.4% from September, but up 29.8% from October 1999 and up 3.3% from October 1995.

Off Southeast Asia, October's SCORE was 37.7, up 8.8% from September. The rating was 37% higher than one year ago, but 25.4% lower than 5 years ago.

The October SCORE for jack ups was 43.5, up 3.8% from September and up 88% from 1 year ago. It was down 2.6% from 5 years ago, however.

The October SCORE for semisubmersibles was 25, down 0.1% from September's SCORE. The rating was up 7.3% for the year but down 45.6% for the 5-year period.

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