Offshore drilling giant Transocean Ltd. (RIG) recently issued a Fleet Update Summary for the period commencing Feb 14, 2013 to date. The update covers the company's drilling rig status and contract information.
Per the report, Transocean has sold its two standard jackups − GSF Adriatic VIII and D.R. Stewart. The jackups were held for sale previously and Transocean has not yet disclosed the value of the transaction. Transocean has also decreased its estimated out-of-service time for the year 2013 by net 45 days.
In addition, Transocean got third party certification of well control equipment on most of its active floaters (42 out of 64). It includes 24 out of 27 ultra-deepwater rigs.
Switzerland-based Transocean is the leading offshore drilling contractor and provider of drilling management services worldwide. Its current contract drilling fleet comprises 82 mobile offshore drilling facilities, which again include 48 high-specification deepwater floaters, 25 mid-water floaters and 9 high-specification jackups.
Transocean currently has 6 ultra deepwater drillships and 3 high-specification jackups under construction.
With less oil being discovered on land and with companies having to dig ever deeper to get to their reserves, Transocean is poised to benefit from a market with robust multi-year demand trends, given its technologically-advanced and versatile drilling fleet.
However, the introduction of new and more stringent regulations due to the Gulf of Mexico 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 carries 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.
In the energy sector, Helmerich & Payne Inc (HP), Range Resources Corporation (RRC) and Calumet Specialty Products Partners LP (CLMT) display better fundamentals and currently carry a Zacks Rank #1 (Strong Buy).
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