Offshore rig company Transocean manages a profit even as its industry peers stumble through the second quarter. File photo by A.J. Sisco/UPI | License Photo
ZUG, Switzerland, Aug. 4 (UPI) -- In part because of lower maintenance expenses, offshore rig company Transocean said it was able to post a gain in net income for the second quarter.
The company, which has headquarters in Switzerland, reported net income of $77 million, a rare gain for an industry moving through a protracted decline in crude oil prices.
"I am very pleased with the company's second quarter operating and financial results," Transocean President CEO Jeremy Thigpen said in a statement.
Capital spending for Transocean for the second quarter of $458 million was up almost 25 percent from the previous quarter because of costs tied to the construction of two new offshore drilling platforms, Deepwater Pontus and Deepwater Conqueror. Operating expenses, meanwhile, of $500 million was down in parallel because of reduced activity during the second quarter.
Revenues were impaired further because Transocean was charging companies less to use its rigs.
The company in February had two rig contracts canceled early. Since 2015, it had about a dozen contracts pulled prematurely as energy companies spend less on exploration and production during the market downturn.
In a March filing with the Securities and Exchange Commission, the company said it expected "very few" new drilling contracts for 2016. This week, the company consolidated its business structure by acquiring outstanding shares in its limited liability component Transocean Partners. The deal means the parent company controls a majority stake in the three additional offshore rigs.
Diamond Offshore, a Transocean rival, said the future was less certain for drillers, but it was sitting in a strong position should crude oil prices recovery. The price for oil is down almost 20 percent since June.
Hercules Offshore in June said it was returning to Chapter 11 bankruptcy with a plan to sell off all of its assets.