Transocean cuts losses, sees utilisation and day rates improving

Offshore drilling contractor Transocean reduced its quarterly losses despite lower revenues and is encouraged by the current upcycle in the offshore drilling market, expecting rig utilisation and day rates to improve moving into the next year.

Transocean reported a similar sentiment in its 1Q 2021 financial report back in May 2021 when the rig owner expressed its optimism that oil prices would remain constructive and drive an increase in contracting through the rest of the year.

In its 2Q 2021 report on Monday, Transocean said that its total contract drilling revenues were $656 million compared with $653 million in the first quarter of 2021 and compared to $930 million in 2Q 2020.

Contract drilling revenues for 2Q 2021 increased sequentially by $3 million to $656 million, primarily due to three rigs that returned to work following a shipyard stay, partially offset by two rigs that went idle in the second quarter.

Net loss attributable to controlling interest was $103 million compared with a net loss attributable to controlling interest of $99 million in the first quarter of 2021 and compared to a net loss of $497 million in 2Q 2020.

According to Transocean, its second-quarter 2021 results included a net favourable item of $6 million related to discrete tax items. After consideration of this net favourable item, the second-quarter 2021 adjusted net loss was $109 million compared to $117 million adjusted net loss in the first quarter of 2021.

Contract backlog was $7.3 billion as of the July 2021 Fleet Status Report when Transocean reported contracts for five of its drillships and four semi-submersible rigs.

Later in July, Transocean also secured two new contracts for its drillships for operations in the U.S. Gulf of Mexico.

Transocean President and Chief Executive Officer, Jeremy Thigpen, said: “During the quarter, we took meaningful steps to improve our liquidity by agreeing to delay delivery and payment of our two newbuild drillships, the Deepwater Atlas and the Deepwater Titan, ultimately deferring over $450 million of near-term capex”.

Thigpen concluded: “As we enter the back half of this year, we remain encouraged by the upcycle that is currently unfolding. Assuming oil prices remain supportive, we see utilisation and day rates for our ultra-deepwater assets materially improving as we move into 2022″.