July 29, 2013 / 10:35 PM / 4 years ago

Ensco profit climbs on rising offshore rig rates

(Reuters) - Offshore drilling contractor Ensco Plc (ESV.N) on Monday reported a higher-than-expected 6 percent rise in quarterly profit as the rates paid for its rigs improved on the back of stronger worldwide demand for them.

About two-thirds of Ensco’s revenue came from floating rigs, for which average rates rose by 13 percent over the past year to $399,000 per day. Rates for its shallow-water “jackup” rigs increased by 16 percent.

Ensco’s second-quarter net profit climbed to $361 million, or $1.55 per share, from $341 million, or $1.45 per share, a year earlier. Revenue rose 17 percent to $1.25 billion. Analysts had expected, on average, a profit of $1.50 per share on revenue of $1.23 billion, according to Thomson Reuters I/B/E/S.

The London-based company’s fleet is of similar size to that of Noble Corp (NE.N) and 14 rigs fewer than the largest fleet, owned by Transocean Ltd (RIG.N), which now has 81 units.

Noble and Diamond Offshore Drilling Inc both reported higher-than-expected quarterly profits earlier this month, lifted by the improved dayrates and, for Diamond, better utilization of its fleet.

    Ensco’s fleet utilization - measuring the number of days rigs are under contract out of the number of days in total - actually declined to 84 percent in the second quarter from 90 percent the year before.

    Shares of Ensco and Diamond have both declined by about 1 percent in 2013, whereas Transocean’s are up 5 percent and Noble’s up 9 percent. Shares of the most valuable offshore driller, Seadrill (SDRL.OL), has gained 14 percent so far this year.

    Reporting by Braden Reddall in San Francisco; Editing by Andrew Hay and Bob Burgdorfer

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