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Transocean (RIG) Adds $297M to Backlog Via Contract Expansions

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Transocean Ltd. (RIG - Free Report) recently won deal expansions from Petrobras (PBR - Free Report) for a couple of its ultra-deepwater drillships. Per the contract extensions, Petrobras activated a 680-day fixed price option for the Deepwater Corcovado. The company also executed an 815-day fixed price option for theDeepwater Mykonos, thereby adding $297 million to Transocean’s industry leading backlog. Both ultra-deepwater drillship contracts were initially awarded to Transocean in March 2019. The vessels will carry on with its operation in Brazil and are contingent upon the annual indexed dayrate increases.

Both high-specification drillships, Deepwater Corcovado and Deepwater Mykonos, are devised in a way to operate at maximum water depth of 10,000 feet and maximum drilling depth of 35,000 feet.

Company Profile

Switzerland-based Transocean is the world’s largest offshore drilling contractor and a leading provider of drilling management services. The company provides rigs on a contractual basis to explore and develop oil and gas. Transocean offers offshore drilling rigs, equipment, services and manpower (with particular emphasis on ultra-deepwater and harsh environment drilling services) to exploration and production companies worldwide.

Earlier this month, Transocean reported adjusted net loss per share of 11 cents, narrower than the Zacks Consensus Estimate of a loss of 17 cents as well as the year-ago loss of 38 cents. This outperformance is led by the company’s improving utilization.

Zacks Rank & Key Picks

Transocean currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are CrossAmerica Partners LP (CAPL - Free Report) and Noble Corporation (NE - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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