Deep water drilling group Ocean Rig UDW lost Us $46.3 million in the first quarter this year after making a $28.9 m profit for the same period last year.

Ocean Rig said adjusted earnings were also down to $52.1 m from $61.5 m in first quarter 2011 w2hile revenue from drilling contract rose by $53.7 m to $163 m for the first quarter this year compared with revenue of $109.3 m in first quarter 2011.

But Ocean Rig chairman and chief executive George Economou remains optimistic about the future for drilling contractors: He had this to say today in the company’s first quarter results statement: “We believe the outlook for the ultra deepwater drilling industry is very positive given the high level of demand we are seeing from all over the globe.”

He went on: “Capital expenditures from oil companies are expected to increase by close to 15% this year and a major portion of this will be targeted towards exploration and development. An increasing number of large discoveries have also been announced in deepwater and ultra deepwater in several new oil and gas provinces, which should provide long term demand for rigs into the foreseeable future.”

Economou underlined that there are almost no deepwater units are left for hire this year: “Given strong industry fundamentals and the fact that there are virtually no available units in 2012 we expect to further increase our backlog by entering into long term contracts for our three 2013 newbuilding drillships, the Eirik Raude and the Ocean Rig Poseidon.”