Offshore drilling giant Transocean Ltd. (RIG) recently issued a Fleet Status Report for the period commencing Oct 16, 2013, to date. The value of all the new deals and contract extensions in the same time frame, is estimated at roughly $166.0 million.
The update covers the company's offshore drilling rig status and contract information. The expected out-of-service time for 2013 has risen by 37 days while the same for 2014 rose by 6 days.
Per the report, Discoverer Enterprise, an ultra deepwater drillship, got a contract extension offer of nine months, to operate at the US Gulf of Mexico. The rig will be working at a dayrate of $615,000, higher than the prior rate of $515,000. The extended deal will add roughly $166.0 million to the backlog.
Also included in the report, Deepwater Discovery, a fifth generation ultra-deepwater floater is now out of contract.
Transocean added that it has divested GSF Rig 127, a standard jackup. However, the company has not yet provided with the details of the deal.
Switzerland-based Transocean is the world’s largest offshore drilling contractor and the leading provider of drilling management services worldwide.
However, the introduction of new and more stringent regulations due to the oil spill has made deepwater drilling activity prohibitively expensive for exploration and production companies, making many projects marginal. This could reduce the demand for deepwater drilling.
Transocean currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better performing oil and gas drilling firms like Tesco Corp. (TESO), Helmerich & Payne Inc. (HP) and Pacific Drilling SA (PACD). While Tesco sports a Zacks Rank #1 (Strong Buy), Helmerich & Payne and Pacific Drilling retain a Zacks Rank #2 (Buy).
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