(Zacks)Transocean, Inc. RIG reported an adjusted net loss of 49 cents per share in the fourth quarter of 2022. The figure was wider than the Zacks Consensus Estimate of a loss of 19 cents per share. This underperformance can be attributed to a decline in revenues from contract drilling.
Moreover, RIG’s bottom line declined from the year-ago period’s loss of 19 cents.
The offshore drilling powerhouse’s total adjusted revenues of $625 million missed the Zacks Consensus Estimate of $629 million.
However, adjusted revenues rose 1.7% from the year-ago figure of $615 million. This outperformance was primarily driven by higher operational days, higher recharge revenues, and strong bonus revenues.
Transocean Ltd. Price, Consensus and EPS Surprise
Transocean Ltd. price-consensus-eps-surprise-chart | Transocean Ltd. Quote
Segmental Revenue Breakup
Transocean’s Ultra-deepwater floaters contributed to 71.7% of the total contract drilling revenues. Harsh Environment floaters accounted for the remaining 28.3%.
In the fourth quarter of 2022, revenues from the Ultra-deepwater and Harsh Environment floaters totaled $434 million and $172 million, respectively, compared with the corresponding year-ago quarter’s reported figures of $432 million and $189 million.
Revenue efficiency for the reported quarter was 98%, higher than the year-ago value of 94.5% and the 95% reported sequentially.
Day Rates, Utilization & Backlog
As of February 2023, the contract backlog for Transocean is $8.5 billion.
Average day rates in the quarter were $348,600, down from the year-ago level of $352,500.
RIG’s average revenues per day from Harsh Environment floaters went from $387,700 to $357,900, indicating a a year-over-year decline. However, average revenues per day from Ultra-deepwater floaters increased to $344,800 from $337,100 in the year-ago quarter.
Total fleet average rig utilization was 49.4% in the quarter, down from the prior-year period’s figure of 53.4%.
Costs, Capex & Balance Sheet
Operating and maintenance costs decreased to $423 million from $430 million in the year-ago period.
In the fourth quarter of 2022, Transocean’s capital expenditures were $409 million, significantly higher than the year-ago period’s $87 million.
Cash provided by operating activities was $448 million at the end of 2022.
The company had cash and cash equivalents worth $683 million as of Dec 31, 2022. The long-term debt was $6.62 billion, with a debt-to-capitalization of around 38% as of Dec 31, 2022.
For 2023, Transocean expects revenues in the $2.9-$3 billion range based on 96.5% revenue efficiency.
The company anticipates a capital expenditure (Capex) of $275 million and a maintenance Capex of $100 million.
Transocean anticipates $635 million in adjusted contract drilling revenues in the first quarter of 2023 and a nearly 15% increase in the number of offshore wells drilled in 2023.