Offshore drilling giant, Transocean Ltd. (RIG) has provided a fleet status report for the period commencing Sep 22, 2014 to date. The value of all the new deals and extensions in contracts, during the aforesaid time frame, is estimated at roughly $610 million. The update covers the company's offshore drilling rig status and contract information.
Transocean disclosed that the expected out-of-service time for 2014 has been lowered by 49 days. However, for 2015, the projected out-of-service time has improved by five days.
Per the report, Transocean Leader – a fourth generation semisubmersible rig – has got a contract, under which it will work at an undisclosed location for four years. For the first three years, Transocean Leader is expected to work at a dayrate of $335,000, lower than the previous rate. For the fourth year, the rig will operate at an indexed rate. The award has added roughly $478 million to the company’s existing project backlog.
Included in the fleet update status, Transocean Amirante – a third generation semisubmersible rig – received a contract to work for one year at an undisclosed location. The rig will operate at a dayrate of $335,000. Previously, Transocean Amirante was out of contract.
In a separate release, Transocean announced that it is planning to offer shares of its wholly owned affiliate Caledonia Offshore Drilling Company (Caledonia). The shares – representing minority interest in Caledonia − will be offered to potential investors in Norway and abroad. Transocean plans to raise $125 million to $185 million of capital from the offering. The Caledonia share offerings’ net proceeds will be received by Transocean.
Transocean added that it plans to offer second lien senior secured bonds of Caledonia. The net proceeds from the bond offering will likely be $350 million. Caledonia will utilize the bond offering’s net proceed to finance the purchase of some drilling rigs from the affiliates of Transocean. The rigs are situated at the U.K. North Sea.
Switzerland-based Transocean currently carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the same industry like Ocean Rig UDW Inc. (ORIG), Pioneer Energy Services Corp. (PES) and Helmerich & Payne Inc. (HP). Ocean Rig and Pioneer Energy sport a Zacks Rank #1 (Strong Buy), while Helmerich & Payne carries a Zacks Rank #2 (Buy).
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