Transocean Fleet Update Shows Higher Out-of-Service Time - Analyst Blog


Offshore drilling giant, Transocean Ltd. ( RIG ), has provided a fleet status report for the period commencing Jul 16, 2014 to date. The value of all the new deals and extensions in contracts, during the aforesaid time frame, is estimated at roughly $78 million. The update covers the company's offshore drilling rig status and contract information. Transocean disclosed that the expected out-of-service time for 2014 has increased by 28 days, while for 2015 the projected out-of-service time has risen by 236 days.  

Per the report, Deepwater Invictus - a newbuild ultra-deepwater drillship - started operating at the U.S. Gulf of Mexico on Jul 28. The rig is working at a dayrate of $595,000 for the three-year contract.

Deepwater Asgard - another newbuild ultra-deepwater drillship - is working at a dayrate of $600,000 for the three-year contract that it got on Aug 21.

Moreover, Jack Bates - a semi submersible rig - got contracts to work for two wells in Australia. The rig will operate at a dayrate of $420,000, higher than the prior dayrate of $380,000. The contract is expected to add $59 million to the existing backlog.

Included in the report, GSF Celtic Sea - a semi submersible rig - received a contract to operate a well in Angola. The rig is anticipated to work at an improved dayrate of $338,000 as compared to its previous rate of $328,000. The contract is estimated to add $15 million to the backlog of the company.  

Transocean added that Sedco Energy - another semi submersible rig - is now operating for the 401 days remaining contract period of GSF Rig 135. Sedco, which was previously out of contract, is now working at Congo.

GSF Rig 135 - also a semi submersible rig - is now working in Nigeria for Sedneth 701's residual contract period of 198 days. Transocean declared that it has divested GSF Magellan − a high-specification jackup.

Switzerland-based Transocean currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the oil and gas sector like Cameron International Corporation ( CAM ), Cheniere Energy Inc. ( LNG ) and VOC Energy Trust ( VOC ). All these stocks sport a Zacks Rank #1 (Strong Buy).

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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 OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CAM , RIG , VOC , LNG

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