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Archer to close Bergen base
Posted 30.05.2012 12:05:56 av John Bradbury
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Oslo-listed contract driller Archer is to close its Bergen based operations after losing some of the services it provides to Statoil in a major tender.

Archer says it has lost 15% of  its business after participating the tender for drilling services on 18 Statoil platforms. Although it won a new drilling contract for three Statfjord platforms, it lost out on its bid to continue providing platform drilling on three Gullfaks platforms where it was the incumbent platform drilling contract service provider.

As a result of losing the Gullfaks contract, Archer says it will have to cut back on its Norwegian operations.

“The activity related to Gullfaks represents approximately 15% of our current total North Sea business,” Archer disclosed in its first quarter results statement today. “The new contract regime will commence on 1st. October 2012 and the Company has already taken action to adjust its fixed cost base including the closure of its Bergen, Norway based platform drilling operation and base.”

Archer reported first quarter revenue at US $546.3 million  -  down 8.4 % compared to $596.1 m last year. First quarter earnings reached $67.2 m down 18% from $82 m a year ago and net income for the first quarter 2012 was $15 m.

In the North Sea, Archer said revenue was down 23.5% to $144.5 m in the first quarter 2012 from $188.9 m in fourth quarter 2011. “The main reason for the reduction is the finalisation of the main deliverables for the Statfjord Late Life project at the end of 2011 as well as seasonally lower activity due to weather related downtime and reduced reimbursable revenue,” the company explained.

Earnings in the North Sea sector were almost halved – down to $12.2 m from $19.5 m in fourth quarter 2011. “The absence of revenue related to the Statfjord Late Life project and exceptional billings in our Engineering Division was the predominant reason for the reduced EBITDA.”

And in an outlook summary for its global business, Archer adds: “With the exception of our North Sea region, we expect all other areas to show sequential growth in both revenue and EBITDA from the first to the second quarter.”
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