Rig contractor Songa Offshore has said the company’s recent volatile stock price was caused by its debt financing and other short-term bank loans and not by its drilling operations.

During a presentation of the company’s credit after a $40 million private placement of shares ran its course this week, company managers sought to explain by the Songa share price has more than halved since June 2008.

“We expect continuous cost pressure as new-build (rigs) are delivered into the market,” a Songa presentation said, adding that relief would come with a strengthened U.S. dollar.

The presentation appeared to portray a company facing the dilemna of an industry, with financial day-to-days to manage ahead of great earnings. Maturing bonds and debt payments on over $1.2 billion are in store for Songa ahead of fully enjoying the earnings of its rigs.

The company’s rigs are now all earning between $225,000 and $425,000 per day on long-term hires, although two on bareboat charters of $50,000 per day or less until current hires wrap up.