February 26, 2019 / 7:22 AM / 8 months ago

UPDATE 1-Seadrill eyes brighter rig market as Q4 boosted by lower costs

(Adds CEO quote, detail)

OSLO, Feb 26 (Reuters) - Seadrill’s core earnings for the fourth quarter exceeded the company’s own guidance, boosted by lower costs and one-off items, while the market outlook for drilling rigs was improving, the Oslo and New York-listed firm said on Tuesday.

The company, controlled by Norwegian-born billionaire John Fredriksen, reported $73 million in quarterly adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), more than double the $35 million forecast it made in November.

However, adjusted EBITDA is expected to ease to around $60 million in the first quarter, the company added.

“The offshore drilling market continues to show signs of improvement with increased tendering activity and better contract economics,” Chief Executive Anton Dibowitz said in a statement.

“We expect more activity in 2019 to lead to a tighter supply demand balance and improved pricing in 2020 as the recovery progresses,” he added.

The company, which owns 35 drilling rigs, added $89 million in new orders during the fourth-quarter, but its order backlog remained broadly unchanged from the third quarter at $2 billion.

The company emerged from U.S. Chapter 11 bankruptcy proceedings last July after agreeing with creditors to raise fresh capital, convert unsecured bonds to equity and push forward maturities of $5.7 billion bank loans. (Reporting by Nerijus Adomaitis, editing by Terje Solsvik and Kirsten Donovan)

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