Fleet Status Report of Transocean - Analyst Blog


Offshore drilling giant Transocean Ltd. ( RIG ) recently issued a Fleet Status Report for the period commencing Sep 18, 2013, to date. The value of all the new deals and extensions in contracts, in the same time frame, is estimated at roughly $2.0 billion.

The update covers the company's offshore drilling rig status and contract information. Transocean informed that the expected out-of-service time for 2013 has risen by 52 days, while for 2014 the projected out-of-service time was down by 119 days.

On Oct 15, the company got a contract from Chevron ( CVX ), to deliver a dynamically positioned ultra-deepwater drillship by second quarter 2016. The drillship is expected to start operation from the fourth quarter of 2016 at a dayrate of $599,000. The deal is expected to add $1.1 billion to the existing backlog.

Per the Fleet Status Report, on Oct 10, Transocean Ao Thai, the high-specification jackup, initiated its 5-year contact, offshore Thailand. It works at a dayrate of $135,000.

Additionally, the Polar Pioneer rig got a 3-year contract. The rig will be working at a dayrate of $620,000, higher than its previous rate of $522,000. The deal is expected to add $679 million to the existing backlog.

Also included in the report is a contact extension of one and half years awarded to Transocean Winner, to work in the North Sea. The rig will be working at a dayrate of $499,000, higher than its previous rate of $453,000 and adding $272 million to the existing backlog.

Furthermore, Transocean disclosed the sale of the standard jackup GSF Rig 134.

Switzerland-based Transocean is the world's largest offshore drilling contractor and the leading provider of drilling management services worldwide.

However, the introduction of new and more stringent regulations due to the oil spill has made deepwater drilling activity prohibitively expensive for exploration and production companies, making many projects marginal. Moreover, the company's international exposure also increases its risk quotient.

Transocean currently holds a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next one to three months.  

Meanwhile, there are other oil and gas drilling firms that offer value and are worth considering. These include Ocean Rig UDW Inc. ( ORIG ) and Pioneer Energy Services Corp. ( PES ) with a Zacks Rank #1 (Strong Buy).

CHEVRON CORP (CVX): Free Stock Analysis Report

OCEAN RIG UDW (ORIG): Free Stock Analysis Report

PIONEER EGY SVC (PES): Free Stock Analysis Report

TRANSOCEAN LTD (RIG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CVX , ORIG , PES , RIG



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