Transocean Ltd. Announces $111 Million Ultra-Deepwater Drillship Contract

Rhea-AI Summary

Transocean (NYSE: RIG) has secured a contract extension through a four-well option exercise for its Dhirubhai Deepwater KG1 drillship with Reliance Industries in India. The program, estimated to last 270 days, will commence immediately following the rig's current firm term with Reliance. The contract is valued at approximately $111 million in backlog, not including additional services.

Positive

• Secured $111 million contract extension
• 270-day continuous operation ensuring no idle time between contracts
• Additional revenue potential from excluded services

Negative

• None.

Insights

Financial Analyst

The $111 million contract extension for Transocean's ultra-deepwater drillship represents a significant boost to the company's backlog and revenue visibility. At an implied day rate of approximately $411,000 for the 270-day program, this extension secures favorable pricing in the current market environment. The continuous deployment directly after the existing contract minimizes idle time and operational costs, optimizing the rig's utilization. This deal with Reliance Industries, a major player in India's energy sector, strengthens Transocean's market position in the Asia-Pacific region. The contract adds meaningful backlog to RIG's portfolio, supporting cash flow predictability and operational stability through 2024-2025.

Energy Market Analyst

This contract extension reflects the robust demand for ultra-deepwater drilling capabilities in the Indian Ocean region. Reliance's commitment to extending the rig's deployment indicates ongoing confidence in offshore exploration and development activities, despite global market fluctuations. The Dhirubhai Deepwater KG1's continued engagement in India's waters aligns with the country's push to reduce energy import dependency through increased domestic production. The day rate secured in this extension demonstrates the strength of the ultra-deepwater market segment, where high-specification assets like this drillship command premium rates due to their advanced capabilities and availability.

STEINHAUSEN, Switzerland, Dec. 17, 2024 (GLOBE NEWSWIRE) -- Transocean Ltd. (NYSE: RIG) (“Transocean”) today announced that a four-well option was exercised for the Dhirubhai Deepwater KG1 with Reliance Industries Limited in India. The estimated 270-day program is expected to commence in direct continuation of the rig’s firm term with Reliance and contribute approximately $111 million in backlog, excluding additional services.

About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services and operates the highest specification floating offshore drilling fleet in the world.

Transocean owns or has partial ownership interests in and operates a fleet of 34 mobile offshore drilling units, consisting of 26 ultra-deepwater floaters and eight harsh environment floaters.

Forward-Looking Statements

The statements described herein that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements could contain words such as "possible," "intend," "will," "if," "expect," or other similar expressions. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are beyond our control, and in many cases, cannot be predicted. As a result, actual results could differ materially from those indicated by these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, estimated duration of customer contracts, contract dayrate amounts, future contract commencement dates and locations, planned shipyard projects and other out-of-service time, sales of drilling units, the cost and timing of mobilizations and reactivations, operating hazards and delays, risks associated with international operations, actions by customers and other third parties, the fluctuation of current and future prices of oil and gas, the global and regional supply and demand for oil and gas, the intention to scrap certain drilling rigs, the effects of the spread of and mitigation efforts by governments, businesses and individuals related to contagious illnesses, and other factors, including those and other risks discussed in the company's most recent Annual Report on Form 10-K for the year ended December 31, 2023, and in the company's other filings with the SEC, which are available free of charge on the SEC's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. We expressly disclaim any obligations or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations or beliefs with regard to the statement or any change in events, conditions or circumstances on which any forward-looking statement is based, except as required by law. All non-GAAP financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the company’s website at: www.deepwater.com. 

This press release, or referenced documents, do not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and do not constitute an offering prospectus within the meaning of the Swiss Financial Services Act (“FinSA”) or advertising within the meaning of the FinSA. Investors must rely on their own evaluation of Transocean and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean.

Analyst Contact:
Alison Johnson
+1 713-232-7214

Media Contact:
Pam Easton
+1 713-232-7647

FAQ

What is the value of Transocean's (RIG) new drillship contract with Reliance Industries?

The contract is valued at approximately $111 million in backlog, excluding additional services.

How long is the duration of RIG's new drillship contract extension?

The program is estimated to last 270 days (approximately 9 months).

Which Transocean drillship received the contract extension from Reliance Industries?

The Dhirubhai Deepwater KG1 drillship received the contract extension.

When will RIG's new drillship contract with Reliance Industries commence?

The contract will commence in direct continuation of the rig's current firm term with Reliance Industries.

How many wells are included in RIG's new contract with Reliance Industries?

The contract includes a four-well option exercise.