Ensco International Inc. said Monday its subsidiary terminated a rig contract with Petrosucre, a subsidiary of Petroleos de Venezuela SA, or PDVSA, Venezuela's national oil company.
As a result, the Dallas-based contract driller said it expects second-quarter earnings to be reduced by 15 cents per share. The company did not provide estimates, but analysts polled by Thomson Reuters forecast an average profit of $1.49 per share.
In January, Ensco suspended operations on an oil rig off Venezuela's Caribbean coast because the South American country owed it $35 million, prompting Petrosucre, PDVSA's joint venture with Italy's Eni SpA, to take over operations of its ENSCO 69 jackup drilling rig.
PDVSA's unpaid invoices jumped 145 percent over 2007, to reach $13.9 billion in December, according to Venezuela's Energy Ministry.
Ensco said Monday Petrosucre has not returned the rig to Ensco and has notified the company it will continue to operate it. Petrosucre owes Ensco $16.9 million in net receivables related to work performed before late-January and has not paid past due invoices, according to Ensco. Earlier Ensco submitted a notice of termination to Petrosucre, and, as the notice period has ended, the contract between the two companies has been terminated.
The company said it will likely fully reserve the $16.9 million net receivable and write off a $4.8 million deferred tax asset, prompting reduced second-quarter earnings expectations. Ensco added that it is pursuing an insurance claim under its package policy and is pursuing legal remedies for damages related to ENSCO 69.
Meanwhile Ensco on Monday released other news that a subsidiary has taken delivery of ENSCO 8501, the second of its seven ultra-deepwater semisubmersible rigs being constructed by Keppel FELS Ltd. in Singapore. Soon the rig will begin a 50-day mobilization to the U.S. Gulf of Mexico for deep sea testing and final outfitting before it starts its three and a half year term drilling contract with a subsidiary of Nexen and Noble Energy. The company said drilling operations will likely begin in mid-October.
Shares of the company fell 96 cents to $37.69.
source: yahoo
As a result, the Dallas-based contract driller said it expects second-quarter earnings to be reduced by 15 cents per share. The company did not provide estimates, but analysts polled by Thomson Reuters forecast an average profit of $1.49 per share.
In January, Ensco suspended operations on an oil rig off Venezuela's Caribbean coast because the South American country owed it $35 million, prompting Petrosucre, PDVSA's joint venture with Italy's Eni SpA, to take over operations of its ENSCO 69 jackup drilling rig.
PDVSA's unpaid invoices jumped 145 percent over 2007, to reach $13.9 billion in December, according to Venezuela's Energy Ministry.
Ensco said Monday Petrosucre has not returned the rig to Ensco and has notified the company it will continue to operate it. Petrosucre owes Ensco $16.9 million in net receivables related to work performed before late-January and has not paid past due invoices, according to Ensco. Earlier Ensco submitted a notice of termination to Petrosucre, and, as the notice period has ended, the contract between the two companies has been terminated.
The company said it will likely fully reserve the $16.9 million net receivable and write off a $4.8 million deferred tax asset, prompting reduced second-quarter earnings expectations. Ensco added that it is pursuing an insurance claim under its package policy and is pursuing legal remedies for damages related to ENSCO 69.
Meanwhile Ensco on Monday released other news that a subsidiary has taken delivery of ENSCO 8501, the second of its seven ultra-deepwater semisubmersible rigs being constructed by Keppel FELS Ltd. in Singapore. Soon the rig will begin a 50-day mobilization to the U.S. Gulf of Mexico for deep sea testing and final outfitting before it starts its three and a half year term drilling contract with a subsidiary of Nexen and Noble Energy. The company said drilling operations will likely begin in mid-October.
Shares of the company fell 96 cents to $37.69.
source: yahoo
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