Transocean to Scrap More Rigs

Sovereign Explorer, image Transocean

Seven more low-specification offshore drilling rigs are now being prepped for sale to a scrapyard today according to Transocean’s latest fleet update.

The rigs include the Sedco 710, Sovereign Explorer, Sedco 700, Sedco 601, J.W. McLean, GSF Arctic I, and Falcon 100.

Four other Transocean rigs are slated for scrapping as well including the Sedneth 701, Sedco 703, Sedco 709, and C. K. Rhein, Jr. The company notes “additional rigs may be identified as candidates for scrapping” as they continue to analyze the long-term competitiveness of their fleet.

While paring down their fleet, a few of their idle rigs have been awarded contracts including the Sedco Express and the GSF Development Driller I. The following is a breakdown of the latest contracts awarded:

• GSF Development Driller I – Awarded a two year contract in Angola at a dayrate of $382,000 ($279 million estimated backlog). The rig was previously idle.
• Jack Bates – Customer exercised a nine month option in Australia at a dayrate of $370,000 ($101 million estimated backlog). The rig’s prior dayrate was $420,000.
• Dhirubhai Deepwater KG2 – Awarded a five month contract extension in India at a dayrate of $395,000 ($59 million estimated backlog). The rig’s prior dayrate was $510,000.
• Sedco Express – Awarded a 45 day contract in Nigeria at a dayrate of $300,000 ($14 million estimated backlog). The rig was previously idle.

The Deepwater Pathfinder, Deepwater Expedition, GSF Explorer, and Discoverer Seven Seas are idle.

The total value of new contracts gained in the past month equals approximately $453 million.

RIG shares are up almost 4 percent today to $19 on the NYSE.

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