Transocean Posts 3Q Loss. Says Market Conditions, Dayrates Improving

Offshore drilling company Transocean on Tuesday posted a third-quarter loss, but the CEO Jeremy Tighpen praised fleet performance, improving market conditions, and rising dayrates.

Swiss-based drilling contractor posted a third-quarter net loss of $130 million. Total contract drilling revenues were $626 million.

For comparison, in the third quarter of 2020, the company posted net income of $359 million, on revenues of $773 million. Worth noting, the 2020 third quarter included a $449 million gain on restructuring, and retirement of debt, among other things, so 3Q 2020 adjusted net loss was $69 million.

Third-quarter 2021 capital expenditures of $37 million, compared to $41 million in the prior quarter, were primarily related to the company’s newbuild drillships under construction. In 3Q 2020, capital expenditures were $65 million, also related to newbuild drillships under construction – the Deepwater Titan and the Deepwater Atlas.

Transocean in August said it had secured a $252 million firm contract at the Shenandoah field in the U.S. Gulf of Mexico for the Deepwater Atlas, including a mobilization fee of $30 million.

Transocean last week also released a third-quarter fleet status report where it showed new contracts for six of its rigs, with the company’s total backlog at approximately $7.1 billion, as of October 25, 

In a statement released as part of the company’s third-quarter 2021 report released Monday, President and Chief Executive Officer, Jeremy Thigpen said: “Notably, our strong uptime performance during the quarter drove an impressive revenue efficiency of 98%, resulting in adjusted revenues of $683 million.”

“Furthermore, during the quarter, we were excited to secure the maiden contract for Deepwater Atlas, solidifying Transocean’s position as the undisputed leader in the 20,000 psi deepwater drilling market. As you know, Transocean has a history of firsts in the most technically demanding environments; and, we look forward to enhancing that legacy upon delivery of Deepwater Atlas and Deepwater Titan in the coming year.” The Titan will debut in the Gulf of Mexico, too, with a long-term contract with Chevron.

Thigpen said: “We grow increasingly encouraged as we observe continuously improving market fundamentals and the resulting strength exhibited in oil prices. With tightening utilization for high-specification ultra-deepwater and harsh environment assets, and longer tender durations across multiple markets, dayrates are steadily increasing, which bodes well for the offshore drilling industry, and Transocean.”

Transocean owns or has partial ownership interests in and operates a fleet of 37 mobile offshore drilling units consisting of 27 ultra-deepwater floaters and 10 harsh environment floaters.