Transocean Sees Multi-year Upcycle in Offshore Drilling Industry

Offshore drilling is making a comeback after several challenging years, and Transocean, a major deepwater drilling contractor, expects to see a multi-year upcycle in the offshore drilling industry.

“Looking back, 2022 will be remembered as a pivotal year in Transocean’s history,” said Chief Executive Officer Jeremy Thigpen in an announcement on the company’s financial results on Tuesday.

“During the year, we continued to high-grade our fleet through the deployment of innovative technologies and the delivery of the industry’s only two 8th-generation drillships, Deepwater Atlas and Deepwater Titan.

Perhaps most importantly, we secured approximately $4 billion in incremental backlog, our largest annual backlog addition since prior to the industry downturn in 2014.”

The company’s contract backlog was $8.5 billion as of the February 2023 Fleet Status Report.

Thigpen said: “As an industry, it is clear that we have finally emerged from eight exceptionally challenging years and are now in the early stages of what we believe will be a multi-year upcycle.

“To maximize value for our shareholders during this upcycle, Transocean will continue to secure high-quality backlog, maintain our acute focus on operational excellence, exercise capital discipline, and take the necessary steps to right-size our balance sheet.”

Transocean on Tuesday reported a net loss attributable to controlling interest of $350 million for the fourth quarter of 2022.

Contract drilling revenues for the quarter decreased sequentially by $85 million to $606 million, primarily due to reduced activity for five rigs that were idle in the fourth quarter, partially offset by higher revenue efficiency and revenues earned by the newbuild ultra-deepwater drillship Deepwater Atlas, which started operations in October 2022.

Fourth quarter 2022 capital expenditures of $409 million, compared to $87 million in the prior quarter, were primarily related to Transocean’s newbuild drillships under construction, including the cash component of the final milestone payment for the delivery of Deepwater Titan in December 2022.

For the full year, Transocean’s net loss attributable to controlling interest totaled $621 million on contract drilling revenues of $2.57 billion.

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