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Transocean (RIG) Wins Two Drillship Contracts Worth $181M

Transocean Ltd. RIG, the Vernier, Switzerland-based American offshore driller, recently declared that it won two drilling contracts for its ultra-deepwater drillship — Deepwater Asgard — in the U.S. Gulf of Mexico.

The two deals are from separate operators and have a combined worth of $181 million. Per RIG, the awards will keep the drillship employed for about 14 months.

The first of the two deals is a one-well contract with Murphy Oil Corporation at $395,000 per day. Anticipated to begin late this fall after the rig completes its current obligation and a planned out-of-service period, the contract also comprises an option for a second well at the same day rate. The backlog for the firm contract is about $20 million.

The second award is expected to begin in the first half of 2023. It is a one-year contract with another operator at $440,000 per day, with the provision of another $40,000 per day for additional products and services.

The second deal also contains three, one-year option periods at mutually agreed day rates. The firm backlog associated with the contract is projected at roughly $161 million without considering revenues associated with additional products and services.

Built in South Korea, Deepwater Asgard is a DSME 12000 ultra-deepwater drillship. It is capable of drilling in waters as deep as 12,000 feet to a maximum depth of 40,000 feet.

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. RIG offers offshore drilling rigs, equipment, services and manpower (with a particular emphasis on ultra-deepwater and harsh environment drilling services) to exploration and production companies worldwide.

Transocean currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include PBF Energy PBF, Shell SHEL and Valero VLO. While PBF sports a Zacks Rank #1 (Strong Buy), Shell and Valero each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PBF Energy’s 2022 earnings has been revised upward by about 92% over the past 60 days from $10.06 to $19.31 per share.

The Zacks Consensus Estimate for PBF’s 2022 earnings stands at $19.31 per share, implying an increase of about 872.4% from the year-ago loss of $2.50.

The Zacks Consensus Estimate for Shell’s 2022 earnings is pegged at $11.41 per share, implying an increase of about 130.5% from the year-ago earnings of $4.95.

The Zacks Consensus Estimate for SHEL’s 2022 earnings has been revised upward by about 8% over the past 60 days from $10.57 to $11.41 per share.

Valero beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 33.5%.

The Zacks Consensus Estimate for VLO’s 2022 earnings stands at $26.69 per share, indicating an increase of about 849.8% from the year-ago earnings of $2.81.


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