Offshore drilling giant
) recently issued a Fleet Update Summary for the month of
December. The update covers the company's drilling rig status and
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Per the report, the company's midwater floater Sedco 714 received
an 18-month contract extension at a dayrate of $435,000, higher
than the previous dayrate of $398,000. In August last year, this
midwater floater got one-year contract extension from oil and gas
Transocean also got third party certification of well control
equipment on most of its active floaters (41 out of 64). It
includes 24 out of 27 ultra-deepwater rigs.
However, jackup Trident 17, which was earlier put up for sale on
the block, was sold and will no longer be a part of the company's
Since the last update on December 17, Transocean added around
$235 million in new contract and extensions.
Transocean is the leading offshore drilling contractor and
provider of drilling management services worldwide. Its current
contract drilling fleet comprises 82 mobile offshore drilling
facilities, which again include 48 high-specification deepwater
floaters, 25 mid-water floaters and 9 high-specification jackups.
Transocean currently has six ultra deepwater drillships and three
high-specification jackups under construction.
With less oil being discovered on land and with companies having
to dig ever deeper to get to their reserves, Transocean is poised
to benefit from a market with robust multi-year demand trends,
given its technologically advanced and versatile drilling fleet.
Transocean boasts of state-of-the-art mobile offshore drilling
fleet that can function in most challenging environments across
the globe. It is the industry leader in this field.
However, the introduction of new and more stringent regulations
due to the oil spill will likely make deepwater drilling activity
prohibitively expensive for exploration and production companies,
making many projects marginal. This could reduce the demand for
We are maintaining our long-term Neutral recommendation on the
stock. Transocean currently retains a Zacks Rank #3 (Hold).