Olsen Energy Shares Slump After Statoil's Safety Concens

Olsen Energy shares have slumped by twelve percent after Statoil canceled a $157,500 a day contract for using the Norwegian rig owner's Byford Dolphin oil drilling platform because of safety concerns.

The rig's charter originally ran to the 9th October this year. Safety on the rig does not meet “contractual requirements” and new measures set after a fatal accident last month, Statoil said in a statement. The stock fell five and a half kroner to an eleven week low of 39.5 kroner, its biggest percentage drop since December 7th, four years ago.

The cancellation will hurt earnings at the unprofitable oil driller, which saw its first quarter loss widen to 860.5 million kroner ($106 million) from 260.5 million kroner in the year earlier period as it wrote down the value of assets.

“The termination is expected to have a significant negative effect both on earnings and industry reputation,” said Aasulv Tveitereid, an analyst at Enskilda Securities, in a note to investors.