Arethusa (Off-Shore) Ltd. reported fourth quarter profit dropped compared to the same period a year earlier but results were still in the black.

Unaudited profit for the quarter ended September 30 was $132,000, or one cent per share, down 165 percent from the $350,000, or two cents per share, reported for the same quarter a year ago, the Bermuda-based company said.

Fourth quarter revenues rose to $34.5 million from $29.9 million, an increase of 15 percent, while direct operating costs rose to $23.1 million from $20.6 million, an increase of 12 percent.

Quarter assets declined nine percent to $315,332 from $347,822.

Interest income declined 56 percent to $748,000 from $1.7 million for the quarter.

"The profit for the fourth quarter was achieved despite incurring 85 rig days of downtime for enhancements to three semisubmersibles in the Gulf of Mexico and increased repair and maintenance expenses during the quarter for much of our fleet in preparation for higher utilisation in 1996,'' said Arethusa president and CEO Mr. Jan Rask.

"As a result of taking rigs out of service in fiscal 1995 for enhancement and repairs, all rigs are presently working and approximately 87 percent of total rig time in fiscal 1996 is now contracted,'' he said.

With the exception of Arethusa Yorktown, presently working offshore Brazil under a contract which expires in March 1996, all the company's semisubmersible rigs are committed for fiscal 1996 and it is anticipated that rigs will soon be contracted at a higher day rate, Mr. Rask added.

For the fiscal year, Arethusa made $21.6 million, or $1.06 per share, compared to $3.6 million, or 18 cents per share for the previous year.

The 500 percent increase was directly linked to a gain of $27.9 million, or $1.37 per share, on the sale of Treasure Stawinner in June.

Without this gain, reported earlier, Arethusa would have lost $6.3 million or 31 cents per share, the company said.

Year revenues increased to $122.1 million from $120.2 million.

Year direct operating costs rose to $88 million compared to $79.9 million, an increase of 10 percent, while interest income declined to $5.7 million from $5.8 million.

Arethusa also announced it has received a letter of intent for the Arethusa Neptune, keeping the rig utilised during most of fiscal 1997.

Following its present commitment, the rig will be upgraded and then begin a one-year contract in the Gulf of Mexico at a day rate about $20,000 higher than average day rate expected for fiscal 1996.

Arethusa, the second largest semisubmersible operator in the Gulf of Mexico, owns or operates a fleet of 13 offshore drilling rigs, including eight semisubmersibles and five jack-ups.