This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Parker Drilling's Management Reviews Delayed Completion Of New Alaska Drilling Rigs And Increased Costs Result In Asset Impairment Charge (Transcript)

Successful innovation in drilling technology has been one of the hallmarks of Parker Drilling, particularly for applications in Arctic environments such as Heli-Hoist, rig design, and rig on wheels, which later led to self propelled rigs. These innovations greatly contributed to the development of Alaska’s Prudhoe Bay Field.

When we undertook the AADU project in 2008, we set out to bring advanced drilling technologies to the north slope of Alaska believing that the new rig design would provide improved drilling efficiency, operational consistency and enhanced safety. Converting the AADU concept into a functional rig has posed significant engineering and construction challenges.

We made efforts along the way to address these as they occurred. As the design evolved, we strengthened the design team, adding experienced resources. As the build schedule accelerated, we added support in critical trades and added work shifts.

As the construction and integration complexities grew, we expanded our Management team with a new role focused on our engineering projects in general and the AADU in particular and staffed it with a proven leader in the field. Despite these responses, the AADUs have not met their scheduling cost targets. However, we continue to expect them to meet their design and performance objectives.

In operational and strategic terms, we are looking forward to having these rigs in operation and validating our concepts of improved efficiency and safety in a demanding work environment on the North Slope.

Earlier this month, we received a letter from BP stating their belief that the delay constitutes a default under contract. We disagree that default is in effect under the contract. We are in discussions with BP concerning the contractual and operational issues related to the rigs. These discussions are continuing and ongoing.

While this project has commanded a lot of attention, particularly in addressing the current circumstances, we continue to execute Parker's business plan and the rest of our operations continue to perform inline with our expectations. I look forward to providing you an update on that progress and our results during our earnings call in late February.

Read the rest of this transcript for free on seekingalpha.com

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs