Transocean books third quarter profit

Offshore drilling contractor Transocean booked a profit in the third quarter of 2020 backed by a gain on restructuring and retirement of debt, offset by a loss on disposal of assets.

Transocean on Monday reported a net income attributable to controlling interest of $359 million for the third quarter of 2020 compared to a loss a year earlier.

Third-quarter 2020 results included net favourable items of $428 million, with $449 million gain on restructuring and retirement of debt and $45 million related to discrete tax items.

These favourable items were partially offset by $61 million loss on disposal of assets and $5 million in restructuring costs.

After consideration of these net favourable items, third-quarter 2020 adjusted net loss was $69 million.

Contract drilling revenues for the third quarter of 2020 decreased sequentially by $157 million, totalling $773 million.

According to Transocean, the decrease was primarily due to $177 million of revenues recognized in second quarter 2020 as a result of a legal settlement agreement with a customer for performance disputes, partially offset by higher revenues from increased utilization and an additional operating day.

Additionally, a non-cash revenue reduction of $57 million, was recognized in the third quarter as a result of contract intangible amortization associated with the Songa and Ocean Rig acquisitions. This compared to $53 million in the prior quarter.

Third-quarter 2020 capital expenditures of $65 million were primarily related to newbuild drillships under construction coupled with capital upgrades for certain rigs in the fleet. This compares with $46 million in the previous quarter.

Transocean’s contract backlog as of October is $8.2 billion.

Jeremy Thigpen, President and Chief Executive Officer, said: “Despite the challenges associated with COVID-19 and an active storm season in the Gulf of Mexico, we continued to operate at a high level in the third quarter, with strong uptime performance driving revenue efficiency in excess of 96%, resulting in quarterly adjusted revenue of $830 million”.