Recently, offshore drilling giant – Transocean Ltd. (RIG) issued a monthly ‘Fleet Update Summary’ covering the company’s drilling rig status and contract information.
Per the report, the company’s midwater floater Sedneth 701 won a one-year contract from Nigerian Petroleum Development Company Limited or NPDC to work in the offshore region of the country. The contract is executable from September 2012 at a revised dayrate of $311,000, against a prior dayrate of $275,000.
Transocean’s Sedco 714 received a one-year contract extension from Total SA (TOT) to operate in the U.K. sector of the North Sea. The rig is expected to work at a dayrate of $395,000, up from prior dayrate of $253,000.
Another drillship – Transocean John Shaw – also got a one-year extension from Abu Dhabi National Energy Company or TAQA to work in the North Sea waters at a dayrate of $360,000, higher than the previous dayrate of $318,000.
The contract for standard jackup – GSF Key Manhattan – was extended for two years at a lower dayrate of $134,000, versus prior one of $137,000. The rig was contracted by Eni SpA (E) and will work on the offshore basin of Italy.
Transocean also received a three well contract extension for GSF Galaxy II drillship – working in the U.K. waters of North Sea – from French multinational company – GDF Suez. The dayrate for the first well is fixed at $210,000, while the remaining wells will operate at a dayrate of $220,000.
However, jackup Discoverer 534 has been put up for sale, and hence will no longer be a part of the company’s fleet.
Since the last update on July 18, new contract and extensions totaled a backlog of about $600 million.
Transocean is the leading offshore drilling contractor and the provider of drilling management services worldwide. Its current contract drilling fleet comprises 128 mobile offshore drilling facilities, which again include 49 high-specification deepwater floaters, 25 midwater floaters, 10 high-specification jackups, 43 standard jackups and one swamp barge in support of offshore drilling activities across the globe.
We are maintaining our long-term Neutral recommendation on the stock. Transocean currently retains a Zacks #3 Rank, translating into a short-term Hold rating.
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