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Transocean (RIG) Updates Delivery Terms With Singapore Firm
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Transocean Ltd. (RIG - Free Report) recently secured an agreement with Jurong Shipyard, a Sembcorp Marine subsidiary in Singapore, to postpone the delivery of two ultra-deepwater drillships Deepwater Atlas and Deepwater Titan. Jurong Shipyard decided to accept the deferred payment for both rigs as part of this arrangement.
The drillships are the world's most competent and high-spec rigs including the first 20,000 psi well control system. The Deepwater Atlas and Titan are the first eighth-generation ultra-deepwater drillships in the world and perhaps, the only rigs with a hook-load of 3,000,000 pounds. These rigs are built and equipped well to maximise fuel consumption while lowering emissions and resultantly, checking the carbon footprint of each offshore operation.
With regard to payment and delivery delays, Deepwater Atlas, which is scheduled to drill at the Shenandoah project in the Gulf of Mexico, will now arrive in December 2021. Transocean will pay $50 million to Jurong Shipyard upon delivery with the remainder estimated to be roughly $370 million, due over a five-year period. Meanwhile, the company and oil firm Beacon agreed that drilling activities on the Shenandoah project will begin in the third quarter of 2022.
The other drillship Deepwater Titan is now scheduled for delivery in May 2022. Transocean will pay Jurong Shipyard 80% of the outstanding funds or nearly $350 million upon delivery. According to a delayed payment agreement with the shipyard, 20% of the remaining balance or almost $90 million will be postponed and paid over a five-year period following delivery. Transocean and Chevron also consented that the Deepwater Titan will begin its drilling operations in the first quarter of 2023.
Payments under each contract will be made in line with each arrangement's payment schedules over the course of the agreement terms. The interest rate on principal amounts will be 4.5 % per year.
Transocean's President and CEO Jeremy Thigpen feels that these agreements are a big leap forward for the company. He further stated, "Notably, as a critical element of these agreements, we will receive shipyard financing, which materially improves our year-end 2022 liquidity by over $450 million, thus extending our runway and providing us with additional investment flexibility as the industry recovers.”
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.
Zacks Rank & Key Picks
Transocean currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Sprague Resources LP , SilverBow Resources Inc. (SBOW - Free Report) and Oasis Petroleum Inc. , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
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Transocean (RIG) Updates Delivery Terms With Singapore Firm
Transocean Ltd. (RIG - Free Report) recently secured an agreement with Jurong Shipyard, a Sembcorp Marine subsidiary in Singapore, to postpone the delivery of two ultra-deepwater drillships Deepwater Atlas and Deepwater Titan. Jurong Shipyard decided to accept the deferred payment for both rigs as part of this arrangement.
The drillships are the world's most competent and high-spec rigs including the first 20,000 psi well control system. The Deepwater Atlas and Titan are the first eighth-generation ultra-deepwater drillships in the world and perhaps, the only rigs with a hook-load of 3,000,000 pounds. These rigs are built and equipped well to maximise fuel consumption while lowering emissions and resultantly, checking the carbon footprint of each offshore operation.
With regard to payment and delivery delays, Deepwater Atlas, which is scheduled to drill at the Shenandoah project in the Gulf of Mexico, will now arrive in December 2021. Transocean will pay $50 million to Jurong Shipyard upon delivery with the remainder estimated to be roughly $370 million, due over a five-year period. Meanwhile, the company and oil firm Beacon agreed that drilling activities on the Shenandoah project will begin in the third quarter of 2022.
The other drillship Deepwater Titan is now scheduled for delivery in May 2022. Transocean will pay Jurong Shipyard 80% of the outstanding funds or nearly $350 million upon delivery. According to a delayed payment agreement with the shipyard, 20% of the remaining balance or almost $90 million will be postponed and paid over a five-year period following delivery. Transocean and Chevron also consented that the Deepwater Titan will begin its drilling operations in the first quarter of 2023.
Payments under each contract will be made in line with each arrangement's payment schedules over the course of the agreement terms. The interest rate on principal amounts will be 4.5 % per year.
Transocean's President and CEO Jeremy Thigpen feels that these agreements are a big leap forward for the company. He further stated, "Notably, as a critical element of these agreements, we will receive shipyard financing, which materially improves our year-end 2022 liquidity by over $450 million, thus extending our runway and providing us with additional investment flexibility as the industry recovers.”
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.
Zacks Rank & Key Picks
Transocean currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Sprague Resources LP , SilverBow Resources Inc. (SBOW - Free Report) and Oasis Petroleum Inc. , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>