US drilling contractor Diamond Offshore (NYSE: DO) said today it would scrap two of its rigs after recording a 38% drop in revenues in the second quarter of 2016.
The Houston-based firm said Ocean Quest and Ocean Star would be retired, while two others would be cold stacked to keep costs down.
Diamond made the decision at a time when offshore drilling is in the doldrums due to high costs and low crude prices.
Diamond said market and operational headwinds had pushed the firm’s revenues down to $388million (£295million) during the quarter, compared with £480million a year earlier.
The company fell to pre-tax losses of £500million, down markedly on profits of £80million in Q2 2015.
Diamond took a £460million writedown for eight offshore rigs during the three months.
Diamond’s president and chief executive, Marc Edwards, said: “Although the market continues to be challenged, our focus is on striking a balance between controlling costs and laying the foundation to ensure we are well positioned for the recovery.”