Offshore drilling company Pacific Drilling has reported a drop in its second-quarter net income for 2016, citing challenging drilling market conditions.

The driller, which owns a fleet of seven drilling ships, posted a net profit for the quarter of $8.2 million, down from $47.1 million reported in the corresponding period of 2015.

Chris Beckett, the company’s CEO said: “Market conditions continue to be very challenging, with limited new tender opportunities and continued pressure on existing contracts.”

Contract drilling revenue for second-quarter 2016 was $203.7 million, which included $12.7 million of deferred revenue amortization, compared to first-quarter 2016 contract drilling revenue of $205.4 million, which also included $12.7 million of deferred revenue amortization. Contract drilling revenue decreased in the

Contract drilling revenue decreased in the second-quarter primarily as a result of the Pacific Scirocco drillship being on an 80% standby rate starting in May 2016.

During the three months ended June 30, 2016, Pacific Drilling’s operating fleet achieved average revenue efficiency of 99.0%.

Operating costs down

During the quarter, Pacific Drilling had four units in operation, with three drillships idle. The company said its direct rig-related daily operating expenses for the three idle rigs averaged $31,300 per rig in second-quarter 2016, down from an average of $36,500 per rig in first-quarter 2016.

Direct rig-related daily operating expenses for our four operating rigs, excluding reimbursable costs, averaged $140,100 per rig in second-quarter 2016, down from an average of $145,800 per operating rig in first-quarter 2016.