Transocean Secures New Contracts in Norway
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy RIG?
Source: Newsfilter
- Total Contract Value of $184 Million: Transocean has secured contracts for two harsh environment semisubmersibles in Norway, representing approximately $184 million in firm contract backlog, indicating strong performance in a high-demand market.
- Encourage Contract Extension: The Transocean Encourage has been awarded a seven-well contract extension, with an estimated 365 days of work expected to commence in Q1 2027, contributing approximately $152 million to backlog, further solidifying its market position.
- Incremental Work for Enabler: The Transocean Enabler has exercised two one-well options, expected to add 70 days of work and contribute approximately $32 million to backlog, ensuring the rig's operations through December 2027 and enhancing revenue stability.
- Industry Leadership: Transocean specializes in technically demanding offshore drilling services, operating a fleet of 27 mobile offshore drilling units, which further cements its leadership in ultra-deepwater and harsh environment drilling, showcasing strong market competitiveness.
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Analyst Views on RIG
Wall Street analysts forecast RIG stock price to fall
7 Analyst Rating
2 Buy
3 Hold
2 Sell
Hold
Current: 6.030
Low
3.00
Averages
4.25
High
5.00
Current: 6.030
Low
3.00
Averages
4.25
High
5.00
About RIG
Transocean Ltd. is an international provider of offshore contract drilling services for oil and gas wells. The Company's primary business is to contract its drilling rigs, related equipment and work crews on a dayrate basis to drill oil and gas wells. As of February 9, 2017, it owned or had partial ownership interests in and operated 56 mobile offshore drilling units. As of February 9, 2017, its fleet consisted of 30 floaters, seven harsh environment floaters, three deepwater floaters, six midwater floaters and 10 high-specification jackups. As February 9, 2017, it also had four ultra-deepwater drillships and five high-specification jackups under construction or under contract to be constructed. Its contract drilling services operations are spread across oil and gas exploration and development areas throughout the world. The Company's drilling fleet can be characterized as floaters, including drillships and semisubmersibles, and jackups.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Performance: The stock is currently trading 29.9% above its 20-day simple moving average and 58.7% above its 100-day simple moving average, indicating robust short-term and long-term performance, with a 79.48% increase in share price over the past 12 months.
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- Cost Synergies: The merger is expected to yield $200 million in cost savings, in addition to Transocean's existing target of $250 million in expense reductions over 2025 and 2026, which will facilitate debt reduction and halve the leverage ratio from 3.0 times EBITDA to 1.5 within two years.
- Positive Market Reaction: Following the merger announcement, Valaris shares surged 48.1% this week, reflecting investor optimism regarding the synergies and future profitability, thereby boosting confidence in the oil and gas sector.
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See More
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- Shareholder Structure: Post-merger, Transocean shareholders will own 53% of the new company while Valaris shareholders will hold 47%, indicating a relatively equal size between the two firms, with Transocean's CEO remaining in charge to ensure management continuity.
- Cost Synergies: The merger is expected to generate $200 million in cost savings, in addition to Transocean's existing target of $250 million in expense reductions over 2025 and 2026, which will facilitate a 50% reduction in debt over the next two years, lowering the leverage ratio to 1.5 times EBITDA.
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- Surge in Trading Volume: The company saw a trading volume of 102.9 million shares, approximately 159% above the three-month average of 39.8 million shares, indicating strong market interest in its acquisition and contract developments.
- Market Consolidation Impact: This acquisition will create one of the world's largest deepwater drilling fleets for Transocean, likely enhancing pricing power and revenue visibility in an increasingly tightening offshore market.
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