Offshore drilling giant,
) recently issued a Fleet Update Summary for the period
commencing Apr 18, 2013 to date. The value of all the new deals
and extensions in the same time frame is estimated to be roughly
$662 million. The update covers the company's offshore drilling
rig status and contract information.
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Per the report, Deepwater Millennium, a Dynamic Positioning
drillship, got a contract to work offshore Australia for two
years. The dayrate is expected to be around $605,000. Previously,
the rig was operating at a dayrate of $545,000. Transocean added
that the contract is expected to add $442 million to the existing
Moreover, Transocean John Shaw, a semi-submersible rig, got a
contract extension offer to work for a year in the North Sea's
U.K. sector. The unit will operate at a dayrate of $415,000. The
contract is estimated to add $151 million to the backlog of
Transocean. Previously, the rig was operating at a dayrate of
Included in the report, Jack Bates, a semi-submersible rig, got a
contract for operating three wells, situated offshore Australia.
The unit is expected to work at a dayrate of $525,000. The deal
will add $47 million to the company's backlog. Management added
that the rig was earlier working at a dayrate of $380,000.
The report also revealed that Falcon 100 - Transocean's midwater
floater - is out of contract presently. Further, as per the Fleet
Update Summary, the out-of-service time expected for 2013
increased by 117 days.
Switzerland-based Transocean is the world's largest offshore
drilling contractor and the leading provider of drilling
management services worldwide. With less oil being
discovered on land and with companies having to dig 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.
On the flip side, dayrates on rigs are likely to come under
pressure as global capacity is freed up due to concerns over the
Gulf of Mexico (GoM) drilling uncertainties. We believe
Transocean will continue to face challenges in renewing and
obtaining contracts on favorable terms.
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.
In the energy sector, three firms that are expected to
significantly outperform the broader U.S. equity market over the
next one to three months are
Ultrapar Holdings Inc.
). All the firms sport a Zacks Rank #1 (Strong Buy).