Rough seas could be ahead for offshore drilling contractor Ocean Rig UDW Inc. (NASDAQ: ORIG), which warned that several of its rigs could be without work after wrapping up existing jobs.
In an Oct. 7 fleet status update the international ultra-deepwater and harsh-environment specialist said two rigs started contracts for work offshore Angola and three others are in the process of completing wells—one each offshore the Falklands, Norway and Brazil.
Ocean Rig detailed the status of five of its rigs. The company owns and operates 13 offshore ultra-deepwater drilling units with two ultra-deepwater semisubmersible drilling rigs and 11 ultra-deepwater drillships. Three of its ultra-deepwater drillships are set to be delivered one at a time in 2017, 2018 and 2019.
Work has not been lined up for three of the five rigs once their current contracts end in 2016. With no employment prospects, Ocean Rig said it will explore cold stacking or scrapping the units if work is not found.
The report comes as the oil and gas industry continues to endure lower commodity prices, the result of a supply-demand imbalance that have caused companies to cut back spending and reduce drilling activity.
(www.epmag.com)
