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Crude Woes: Transocean to Make 110 Employees Redundant

Zacks Equity Research
·2 min read

Transocean Ltd. RIG informed the Texas Workforce Commission that it is planning to slash 110 workers as it was unable to acquire a new contract for its Discover Installation drillship due to weak oil prices.

The employees to be terminated are currently working on the Discoverer Inspiration, an ultra-deepwater drillship operating in international waters off the Gulf of Mexico.The rig will complete its current operating deal and will be laid off after its contract ends.

The lay-offs are regarded as permanent by the company and will commence on Sep 15. Meanwhile, this Switzerland-based Transocean might consider taking back some of the affected employees if it inks a new deal for the Discoverer Inspiration.

The employees to be given the marching orders will earn a severance sop. However, in absence of the bumping rights, staff at more senior ranks cannot replace their subordinates.

For a while now, the oil industry is reeling under the adverse impact of coronavirus pandemic that crippled most sectors until now. Fuel demand took a huge hit following large-scale travel constraints imposed globally. Against this backdrop of a pullback in oil prices, Transocean's stock price has shed 74.3% of value since the beginning of 2020 when crude was trading at more than $60 a barrel.

Company Profile

Transocean is the world’s largest offshore drilling contractor and a leading provider of drilling management services. The company provides rigs on a contractual basis to explore and develop oil and gas. Transocean offers offshore drilling rigs, equipment, services and manpower (with particular emphasis on ultra-deepwater and harsh environment drilling services) to exploration and production companies worldwide.

Zacks Rank & Key Picks

Transocean currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Gulfport Energy Corporation GPOR, Cheniere Energy, Inc. LNG and Chevron Corporation CVX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Transocean Ltd. (RIG) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report
 
Gulfport Energy Corporation (GPOR) : Free Stock Analysis Report
 
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