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Transocean (RIG) Disappoints Again with Latest Fleet Update

Offshore drilling giant, Transocean Ltd.RIG has provided a monthly fleet status report for the period from Aug 19, 2015. The update covers the company's offshore drilling rig status and contract information.

New contracts have now become almost a distant memory for Transocean. The company has been surviving on contract extensions for the past few months as is indicated by its fleet updates. The latest update is even worse with neither new contracts nor contract extensions.

Additionally, Transocean announced that the sixth generation semi-submersible Transocean Barents, third generation semi-submersible GSF Rig 140 and the jackup GSF Galaxy II are currently idle.

Transocean also disclosed that the expected out-of-service time for 2015 has increased by 26 days, while the same has declined by five days for 2016.

With crude prices remaining weak, demand for rigs has seen a decline. Upstream firms have been drastically reducing exploration capex to handle pricing woes, which has been resulting in more weakness for drillers like Transocean.

Though this weakness is expected to continue for the greater part of 2016, Transocean's robust backlog position - about $18.6 billion - should offer some relief. This also enables the company to navigate the current uncertain environment better than many of its peers.

Currently, Transocean holds a Zacks Rank #2 (Buy).

Other stocks worth considering from the oil and gas drilling space include Noble Corporation plc NE , Seadrill Partners LLC SDLP and Ocean Rig UDW Inc. ORIG . All these stocks carry the same rank as Transocean.

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NOBLE CORP PLC (NE): Free Stock Analysis Report

TRANSOCEAN LTD (RIG): Free Stock Analysis Report

OCEAN RIG UDW (ORIG): Free Stock Analysis Report

SEADRILL PTNRS (SDLP): Free Stock Analysis Report

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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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