Global offshore drilling giant
Transocean Ltd.
(
RIG
) entered into an agreement with Shelf Drilling International
Holdings Ltd. for the sale of 38 shallow water drilling rigs. The
transaction will fetch Transocean approximately $1.05 billion.
Dubai-headquartered Shelf Drilling - a company recently formed
through equal sharing by Castle Harlan Inc., CHAMP Private Equity
and Lime Rock Partners - will make cash payment of about $855
million, while the remaining $195 million will be paid through
seller financing. Seller financing will involve issue of preference
shares by a subsidiary of Shelf Drilling.
Subject to certain conditions and approvals, the deal is expected
to be completed in the fourth quarter of 2012.
Transocean stated that its third-quarter 2012 results will reflect
non-cash impairment charge related to the long-lived assets or
goodwill associated with the assets. With this disposition, the
company aims to re-design its asset base with a focus on
high-specification floaters and jackups that will likely enhance
Transocean's long-term competitive structure.
As of June 30, 2012, Switzerland-based Transocean owned, had
partial ownership interests in, or operated 130 mobile offshore
drilling rigs. Transocean's drilling fleet consists of 50
high-specification deepwater floaters, 25 mid-water floaters, 10
high specification jackups, 44 standard jackups, and one other rig
utilized to support offshore drilling activities worldwide.
Additionally, the company had 2 ultra-deepwater drillship and 3
high-specification jackups under construction.
The company's fleet is considered to be one of the most modern and
versatile in the world due to its emphasis on technically demanding
segments of the offshore drilling business. Transocean's drillships
are contracted by oil biggies such as
Chevron Corporation
(
CVX
),
Royal Dutch Shell plc
(
RDS.A
) and
BP plc
(
BP
).
We are maintaining our Neutral recommendation on the stock, as we
see limited upside over the near term. Transocean currently retains
a Zacks #3 Rank, (short-term Hold rating).
BP PLC (BP): Free Stock Analysis Report
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