Transocean Presents Monthly Fleet Update, Jackup Rig for Sale - Analyst Blog

Offshore drilling giant, Transocean Ltd . ( RIG ) has provided a monthly fleet update summary that covers the company's offshore drilling rig status, contract and out-of-service time information.

Per the report, GSF Magellan, a high-specification jackup rig is now up for sale. Transocean also mentioned that the estimated planned out-of-service time for 2014 has decreased by net 5 days, while for the next year, this estimate has been extended by a net amount of 29 days.

Switzerland-based Transocean is the world's largest offshore drilling contractor and the leading provider of drilling management services. The company's latest fleet comprises 77 mobile offshore drilling units that include 46 high-specification floaters, 21 midwater floaters and 10 high-specification jackups. Additionally, Transocean has nine ultra-deepwater drillships and five high-specification jackups in the construction phase.

Transocean has consistently performed well in the past few quarters, reporting earnings well above the Zacks Consensus Estimate. For the trailing four quarters, the company has an average earnings surprise of 24.55%. Moreover, it has a strong backlog, which not only reflects steady demand from its customers but also offers an unmatched level of earnings and cash flow visibility.

However, the company's exposure to the volatile and cyclical oil and gas exploration & production sector could curtail deepwater drilling and dampen equipment demand, affecting bookings at Transocean.

Currently, Transocean 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 consider better-ranked players in the oil and gas drilling industry like Pioneer Energy Services Corp. ( PES ), Helmerich & Payne, Inc. ( HP ) and Nabors Industries Ltd. ( NBR ). While Pioneer Energy sports a Zacks Rank #1 (Strong Buy), Helmerich & Payne and Nabors hold a Zacks Rank #2 (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 Nasdaq, Inc.

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

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