Associated Press
, 07.15.09, 06:31 PM EDT
DALLAS -- Contract oil driller Ensco International Inc. said on Wednesday it is writing off the value of an oil rig seized earlier this year by a joint venture that includes the Venezuela national oil company.
Ensco said it took a second-quarter pretax loss of $18.1 million to cover the book value of the ENSCO 69 rig plus $800,000 in other assets. Last month it had said its second-quarter results would be hurt by 15 cents per share because of lost revenue from the contract with Petrosucre, a subsidiary of Petroleos de Venezuela SA.
Ensco suspended operations on the oil rig off Venezuela's Caribbean coast in January because the South American country owed it $35 million.
"Due to Petrosucre's failure to satisfy its contractual obligations and meet payment commitments, Ensco management believes it is remote that ENSCO 69 will be returned," the company wrote in a prepared statement.
The company said its insurance covers "certain political risks." Its claim is in the early stages and it does not expect to record any insurance recovery in the second quarter.
Ensco shares rose $2.14, or 6 percent, to close at $38.04 before the announcement. They fell 54 cents in late trading.
