Feb. 28 (UPI) -- Rig company Seadrill Ltd., based in Norway, said it was looking at restructuring options after noting it didn't expect improvements in lease rates this year.
Energy companies are spending more on exploration and production as crude oil prices settle at around $55 per barrel. Oil prices last year dropped below $30 per barrel and some of the smaller service companies collapsed as a result of the corresponding drop in spending.
Seadrill, which counts dozens of deepwater and ultra-deepwater drillships in its fleet, said it was struggling with mounting debt and may have trouble staying afloat.
President and CEO Per Wullf said the level of bidding had increased for his company's services and there was room for some optimism.
"Improving dayrates will not be a feature of 2017," he cautioned in a statement.
Transocean, one of the larger offshore rig companies, said it saw recovery for offshore drillers was evident on the horizon. Contract drilling revenues declined $93 million, however, because of decreased activity and because the company was cutting the lease rates for its rigs.
Since 2015, Transocean had about a dozen contracts pulled prematurely.
Seadrill posted fourth quarter earnings before interest, taxes, debt and amortization of $354 million, down from $513 million posted last year.
Staving off the possibility of bankruptcy, Seadrill's CEO said his company was primed for eventual recovery.
"Our key stakeholders have demonstrated a desire to be part of a solution to our restructuring requirements with the right structure and terms," he said.