(MENAFN- Gulf Times) Gulf Drilling International (GDI), a subsidiary of Gulf International Services (GIS), yesterday said its net earnings will be "negatively impacted" due to the sharp decline in oil prices.
As a result of the sharp decline of oil prices, one of its jack-up rigs currently working under contract will be released by one of its clients in early May 2015, but GDI has entered into negotiations to reduce the current rigs day rates of another client at that client's request, GIS said in a communiqué to the Qatar Stock Exchange.
"Despite the excellent results of first quarter of 2015, these reductions will negatively impact GDI's 2015 financial year end results," said a spokesman of Gulf International Services, which had in last year bought out the 30% stake held by Japan Drilling Corporation.
The company is working with other potential clients to secure a work contract for the released rig and the bourse will be informed accordingly of any impacts to the company's financials, he said.
GDI's net earnings stood at QR718.32mn or more than 60% of the GIS's net profit of QR1.19bn and net revenues amounted to QR1.82bn or about 43% of the parent company's revenue of QR4.26bn during the year ended December 31, 2014.
Global crude oil prices are at least 40% lower than the 2014 levels and it is expected to affect the rig sector with a lag. The weakness in the crude has had its fair share in the lower rig country, especially in the US, various reports suggest.
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