Offshore drilling contractor Transocean says the market for offshore drilling services is clearly recovering after eight “extremely challenging” years for the industry.
Transocean on Monday reported second quarter 2022 results, showing a net loss $68 million. But the company expressed optimism amid rising contracting activity, utilization rates, day rates. Contract drilling revenue rose to $692 million in the second quarter, up from $586 in the first quarter of 2022. As of July, Transocean’s contract backlog stood at $6.2 billion.
“The Transocean team continued to operate at an extremely high level throughout the second quarter, once again delivering safe, reliable, and efficient operations for our customers,” said Transocean CEO Jeremy Thigpen. “Our strong uptime performance and contractual bonus conversion resulted in revenue efficiency of approximately 98% across our global floater fleet.”
“While the past eight years have been extremely challenging for the entire industry, it is clear that the recovery in offshore drilling is underway, as contracting activity, utilization rates for high-specification ultra-deepwater and harsh-environment assets, and dayrates all continue to rise,” added Thigpen. “And, with a backdrop of hydrocarbon supply challenges, we are increasingly encouraged that this momentum could continue for the foreseeable future.”
The rebound comes as the price of crude oil, both WTI and Brent, has surged past $100 per barrel since Russia’s invasion of Ukraine, before pulling back.
On Tuesday, Transocean announced a 5.8 year contract for its Petrobras 10000 ultra-deepwater drillship in Brazil, adding an estimated $915 million to its backlog. It also announced a two-year contract for its ultra-deepwater drillship Deepwater Conqueror in the U.S. Gulf of Mexico for $440,000 per day with up to $39,000 per day in extras. The contract will add an estimated $321 million to its backlog and will to begin in December 2022 in direct continuation of the rig’s current contract.
Transocean’s stock (NYSE: RIG) rose more than 16% on Tuesday.
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