Diamond Offshore Scraps Rigs

Diamond Offshore Drilling Inc, one of the world's top five offshore rig contractors, said it was scrapping three rigs in the face of weak demand due to a steep fall in global crude prices.

The company said on Monday it recorded an impairment charge of $319 million for eight rigs, including the rigs being retired, in its first-quarter results.

The charge caused the company to report a quarterly loss for the first time since June 2004.

Diamond Offshore, which has 33 rigs, said last year it would idle or sell eight rigs.

Excluding the write-down and a $4 million charge for restructuring and severance costs, the company posted an adjusted profit of 50 cents per share, according to Thomson Reuters I/B/E/S. Analysts on average had expected 43 cents.

A number of oilfield companies are cutting jobs and retiring rigs in response to weakened demand from oil producers, who are scaling back spending to cope with a 43 percent decline in global crude prices since June.

Utilization rates for Diamond Offshore's ultra-deepwater rigs, its biggest business, fell to 51 percent in the quarter ended March 31, from 66 percent, a year earlier.

Net loss was $255.7 million, or $1.86 per share, in the first quarter, compared with a profit of $145.8 million, or $1.05 per share, a year earlier.

The Houston-based company's total revenue fell 12.6 percent to $620 million.

Up to Friday's close of $33.47, the stock had declined nearly 9 percent this year. (Reporting by Sneha Banerjee