Transocean, Inc RIG, a leading international provider of offshore contract drilling services for oil and gas wells, announced a significant contract for a high-specification seventh-generation, ultra-deepwater drillship in the Gulf of Mexico offshore Mexico. This 1,080-day contract is expected to contribute approximately $518 million in backlog, excluding revenues for mobilization and demobilization.
The Contract Details
Per the terms of the deal, Transocean will choose one of the three drillships — Deepwater Invictus, Deepwater Thalassa and Deepwater Proteus. The final selection will be made no later than one year before the earliest date in the commencement window.
The contract is anticipated to start between the fourth quarter of 2025 and the second quarter of 2026. With a baseline date of Jul 1, 2023, the contractual day rate is subject to a semi-annual cost adjustment mechanism. It is important to note that this contract does not include any extra services.
Industry Insights
The fact that customers are signing long-term contracts and reserving rigs well in advance of their programs indicates the growing demand for offshore drilling services. This development also showcases Transocean’s strong market position and customers’ confidence in its expertise and fleet of high-specification ultra-deepwater drillships.
RIG operates the highest specification floating offshore drilling fleet in the world, specializing in technically demanding sectors of the global offshore drilling business. Its fleet comprises 37 mobile offshore drilling units, including 28 ultra-deepwater floaters and nine harsh environment floaters.
Additionally, Transocean holds a non-controlling ownership interest in a company that’s currently constructing another ultra-deepwater drillship. This extensive fleet and expertise enable the company to deliver reliable and efficient drilling services in deepwater and harsh environments.
Conclusion
Transocean’s recent contract win highlights its ongoing success in the offshore drilling industry. With its optimum fleet utilization, RIG remains at the forefront of providing offshore drilling solutions for oil and gas wells globally.
Zacks Rank and Key Picks
Currently, RIG carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM, sporting a Zacks Rank #1 (Strong Buy), and Murphy USA MUSA and NGL Energy Partners NGL, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is worth approximately $264.82 million. EPM currently pays a dividend of 48 cents per share, or 6.03% on an annual basis.
The company currently has a forward P/E ratio of 7.37. In comparison, its industry has an average forward P/E of 10.60, which means EPM is trading at a discount to the group.
Murphy USA is valued at around $6.75 billion. In the past year, its shares have risen 15.2%.
MUSA currently pays a dividend of $1.52 per share, or 0.49% on an annual basis. Its payout ratio currently sits at 6% of earnings.
NGL Energy Partners is valued at around $502.64 million. In the past year, its units have risen 164.6%.
The partnership currently has a forward P/E ratio of 4.38. In comparison, its industry has an average forward P/E of 14.10, which means NGL is trading at a discount to the group.
Transocean Ltd. (RIG): Free Stock Analysis Report
Murphy USA Inc. (MUSA): Free Stock Analysis Report
NGL Energy Partners LP (NGL): Free Stock Analysis Report
Evolution Petroleum Corporation, Inc. (EPM): Free Stock Analysis Report
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