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Transocean (RIG) Expands Its Backlog to $8.5 billion

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Transocean (RIG - Free Report) 's quarterly Fleet Status Report provides a comprehensive overview of the company's fleet and the contracts awarded to its offshore drilling rigs. In the report, Transocean, a leading offshore drilling contractor reveals its backlog of $8.5 billion, which includes contracts awarded in Brazil, Norway, Suriname, the Gulf of Mexico, and the UK North Sea.

Transocean's Brazilian Contracts: Transocean's Deepwater Corcovado and Orion have secured four-year and three-year contracts in Brazil, at a daily rate of $400,000 and $417,000 respectively. Additionally, the Dhirubhai Deepwater KG2 was awarded a 910-day contract in Brazil for $439,000 per day (adjusted for currency exchange). These contracts significantly boost Transocean's backlog and highlight the company's dominant position in the Brazilian offshore drilling sector.

Gulf of Mexico Contracts: Transocean's Deepwater Invictus secured a contract for three wells in the Gulf of Mexico at a daily rate of $425,000, while Murphy Oil signed a one-well option for the Deepwater Asgard at $395,000 per day. These agreements highlight Transocean's dominance in the Gulf of Mexico and its ability to secure costly deals from major players in the industry.

UK North Sea Contracts: Transocean's semi-submersible rig, the Transocean Barents, has secured a one-well contract in the UK North Sea at a daily rate of $310,000, contributing to the company's backlog. Harbour Energy has also signed an eight-well option for Transocean's Paul B. Lloyd Jr. rig at a daily rate of $170,000. These contracts illustrate Transocean's proficiency in securing deals in diverse regions and its expertise in drilling in demanding environments.

Norwegian Contracts: Transocean Norge in Norway secured a contract at a rate of $414,000 - $424,000 per day (adjusted for foreign currency exchange), further contributing to Transocean's backlog. This contract demonstrates the company's ability to secure contracts in the North Sea region, where Transocean has a strong track record of success.

Suriname Contract: TotalEnergies exercised a one-well option for Transocean's Development Driller III in Suriname at a daily rate of $360,000, increasing Transocean's backlog. This contract demonstrates the company's ability to secure contracts in emerging markets and its willingness to invest in these regions.

As the offshore drilling industry continues to face challenges, such contracts could provide a much-needed boost to the industry. With approximately $1.9 billion worth of incremental backlog connected to these fixtures, Transocean's recent success in securing lucrative contracts positions the company for future growth and success in the offshore drilling market. As of Feb 9, the company had an estimated backlog of $8.5 billion.

Zacks Rank and Key Picks

Transocean is a leading provider of offshore drilling services, specializing in deepwater and harsh environment drilling. The company operates a fleet of 38 drilling units, including 28 ultra-deepwater floaters and 10 harsh environment floaters, and is constructing one ultra-deepwater drillship.

Currently, Transocean carries a Zacks Rank #3 (Hold). Investors interested in the energy sector might look at some better-performing stocks like ProPetro Holding (PUMP - Free Report) and Energy Transfer (ET - Free Report) both sporting a Zacks Rank #1 (Strong Buy) and Helmerich & Payne (HP - Free Report) holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ProPetro Holding:  PUMP currently has a forward P/E ratio of 4.43. In comparison, its industry has an average forward P/E of 25.40, which means PUMP is trading at a discount to the group.

ProPetro Holding is worth approximately $1.13 billion. Its shares have declined 20.8% in the past year.

Energy Transfer LP: Energy Transfer LP is valued at around $39.66 billion. ET delivered an average earnings surprise of 16.34% for the last four quarters, and its current dividend yield is 9.50%.

Energy Transfer LP currently has a forward P/E ratio of 8.95. In comparison, its industry has an average forward P/E of 14.20, which means Energy Transfer LP is trading at a discount to the group.

Helmerich & Payne: Helmerich & Payne is valued at around $4.78 billion. Helmerich & Payne, headquartered in Tulsa, OK, has a trailing four-quarter earnings surprise of roughly 130.98% on average.

Over the past 60 days, the Zacks Consensus Estimate for HP's fiscal 2023 earnings has been revised by 18.8%. In the past year, HP stock has increased by 36.3%. 

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