cents a share in its first quarter.

Over the same period last year, the company turned a profit of $1.06 million, or five cents a share.

Revenue for the three months ended December 31, 1994 was $28.28 million compared to $30.15 million for the same period a year earlier.

Revenue was down because of lower rig utilisation, 84 percent compared to 97 percent a year ago, Bloomberg Business News said.

"Although we are disappointed with our first quarter results we believe we have made good use of the idle time. We are about to complete installation of new top drives on three of our rigs, two of which have contract commitments and we expect further improvement in the semisubmersible market in the Gulf of Mexico during the next several weeks,'' said Ms Jan Rask, president and CEO of Arethusa.

The company has agreed to sell the commercial semisubmersible drilling rig, Treasure Stawinner , to Petrobras in Brazil.

Arethusa should receive $55 million for the rig.

Arethusa will gain about $28 million in the sale and use about $13 million to repay debt.

The company will retain title to the drilling equipment, worth about $10 million, to be removed from the rig and used by Arethusa for other purposes.

The company also announced it will purchase the Yatzy , a semisubmersible built in 1989, for about $50 million, from a company controlled by the Belgian government.

Both transactions are expected to close in the third quarter.