• Backlog of $229 Million Added During Second Quarter
• Ocean GreatWhite Completes Second Well Post-Reactivation; First Option Exercised
• Ocean BlackHawk Completes Senegal Contract; Commences Shipyard Project
• Ocean Apex Completes Shipyard Project; Mobilizing to Location Offshore Australia
Diamond Offshore Drilling, Inc. reported the
following results for the second quarter of 2023:
Bernie Wolford, Jr., President and Chief Executive Officer of Diamond Offshore, stated “Our
clients continue to commit additional capital to offshore drilling and make critical investments in
long-lead subsea equipment. This coupled with strong commodity demand outlooks and
favorable economics for deepwater projects are setting the stage for sustainable demand for our
drilling services as momentum continues to build in this cycle. During the quarter, we secured
term work for the Ocean BlackHawk and added a two-well contract for the Ocean Patriot, both
at higher dayrates. We also extended the Ocean Endeavor by two wells, and our customers
exercised options for the Ocean GreatWhite and the Ocean BlackRhino. These wins, which total
more than $229 million in additional backlog, provide increased visibility to our 2024 revenue
stream and are a testament to our team's performance.
We now have $1.6 billion of backlog with notable average day-rate improvement as we
transition to new contracts in the back half of this year.”
Second Quarter Results
Contract drilling revenue for the second quarter totaled $282 million compared to $232 million in
the first quarter of 2023. The increase in revenue quarter-over-quarter was primarily driven by a
full quarter's utilization for the Ocean Endeavor and the Ocean GreatWhite, and the Ocean
BlackHornet benefiting from a full quarter at its higher dayrate, partially offset by the Ocean
Apex being in the shipyard the entire quarter for its special periodic survey and upgrades.
Results for the second quarter also included $12.2 million in revenue associated with the
previously announced termination of the Ocean Patriot's contract in the North Sea
Contract drilling expense for the second quarter increased to $213 million, compared to $173
million in the prior quarter, largely due to higher charter costs for the Company’s managed rigs
as a result of higher dayrates and more revenue earning days in the quarter and the Ocean
Apex incurring additional costs associated with its shipyard activity in the quarter.
General and administrative expenses were $17 million in the second quarter compared to $20
million in the prior quarter. The decrease was primarily attributable to lower personnel costs and
professional fees.
Tax benefit for the second quarter was $243 million as compared to $26 million in the prior
quarter. The unusually high tax benefit recorded in the second quarter reflects the results of the
computation and application of the Company’s annual effective tax rate in accordance with U.S.
GAAP accounting standards, adjusted for discrete items. We expect our tax expense to
normalize and the recorded benefit to reverse by year end.
Operational Highlights
Operationally, the Company's rigs continued to perform exceptionally well, achieving revenue
efficiency of at least 96% for the fifth consecutive quarter. This is a notable achievement with
the Ocean GreatWhite having been reactivated in March 2023 and the Ocean Endeavor coming
back online following its special periodic survey. In addition, the Ocean BlackHawk successfully
completed its campaign in Senegal in early July and has mobilized to Las Palmas for its
upgrades and preparation for its return to the Gulf of Mexico.
