Since the downturn started, offshore drilling companies have had a hard time securing contracts. Day rates have dropped to some of the lowest levels in the last several years. Offshore drilling companies are utilizing their backlogs quicker than they’re replenishing them through new contracts. As a result, it’s important to look at how backlogs changed for various offshore drillers.
How’s a backlog calculated?
A company’s backlog is calculated as the predetermined day rate of the contract multiplied by its contract duration. The backlog helps us understand where the company’s future revenues could head.
- As of February 19, 2018, Transocean (RIG) had a backlog of $12.8 billion—up from $9.4 billion in October 2017. After many quarters, Transocean’s backlog has risen. Since 2015, Transocean’s backlog has fallen continuously every quarter.
- As of December 31, 2017, Ensco (ESV) had a total contracted backlog of $2.8 billion—compared to $3.6 billion as of December 30, 2016. Ensco’s backlog is lower than the previous quarter.
- As of February 13, 2018, Rowan Companies (RDC) had a backlog of $456 million—down from $1.7 billion in February 2017. Rowan Companies’ backlog is lower than the previous quarter.
- As of January 1, 2018, Diamond Offshore Drilling (DO) had a backlog of $2.4 billion—compared to $3.5 billion on January 1, 2017, and $2.6 billion on October 1, 2017.
- Noble (NE) sustained its backlog at $3 billion at the end of 4Q17.
Next, we’ll compare five offshore drilling companies’ 4Q17 revenue performance.