Transocean Sees Increased Demand for High-Specification Floaters Amid Offshore Market Rebound

Offshore drilling contractor Transocean (NYSE: RIG) says it is seeing increased demand for its fleet of high-specification semi-submersible rigs and drillships, i.e. “floaters”, as the offshore drilling market continues to rebound.

The rebound is reflected in Transocean’s stock price, which is up more than 90% year-to-date and up more than 120% compared to a year ago.

Nevertheless, the company on Monday reported a second quarter net loss attributable to controlling interest of $165 million, equivalent to $0.22 per diluted share, for the three months ended June 30, 2023. This compares to a $68 million loss in the same period last year. Shares of Transocean were down nearly 5% on Tuesday as investors digested the news.

Despite the loss, contract drilling revenues for the same period increased by $80 million to $729 million, compared to the previous quarter. Transocean attributed the increase primarily to higher activity levels for rigs that returned to work after being idle in the first quarter, the commencement of operations of the newbuild Deepwater Titan, and $19 million of revenues associated with the early termination of Transocean Endurance and Transocean Barents. However, these gains were partially offset by reduced activity for two rigs that were idle during the second quarter of 2023.

“During the second quarter, we continued to benefit from increased demand for our fleet of high-specification floaters. As of our latest fleet status report, we secured an additional $1.2 billion of backlog at a weighted average dayrate of approximately $456,000,” said Chief Executive Officer, Jeremy Thigpen. “As evidenced by our customers contracting rigs well in advance of their programs and committing to long-term contracts, the outlook for our high-specification assets and services remains robust.

“In addition to securing contracts at market-leading rates, our focus remains on the flawless execution of our offshore operations to maximize the value of our $9.2 billion backlog for our shareholders,” Thigpen added.

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up