Offshore drilling giant, Transocean Ltd. (RIG - Analyst Report) recently issued a Fleet Update Summary for the period commencing Mar 14, 2013 to date. The value of all the new deals and extensions in the same time frame is estimated to be roughly $1.2 billion. The update covers the company's offshore drilling rig status and contract information.
Per the report, Deepwater Asgard, an ultra-deepwater drillship, got a contract to work offshore Indonesia for three years with a leading integrated international oil firm. The dayrate is expected to be around $600,000. The drillship is under construction and will be able to work at water depths up to roughly 12,000 feet and will drill up to depths of roughly 40,000 feet.
The contract for Deepwater Asgard is expected to start from the first quarter of 2014, subject to the delivery of the drillship and the acceptance of the customer. Transocean added that the contract is expected to add $657 million to the existing backlog. Additionally, all the newly built rigs of the company have got contracts.
Included in the Fleet Update report, Cajun Express, a semi-submersible drilling rig of 5th generation, got a contract to work for a year at offshore Morocco and Senegal. The unit will operate at a dayrate of $600,000 for Morocco. The contract is estimated to add $219 million to the backlog of Transocean. Previously, the rig was operating at a dayrate of $520,000.
Moreover, GSF Magellan, a drilling unit of the company, got a contract extension of one year to operate offshore Nigeria. The jackup will work at a dayrate of $168,000 and will contribute $61 million to the existing backlog. Earlier, the unit was working at a dayrate of $160,000.
Besides that, the customer exercised an option to use Transocean Arctic, a semi-submersible drilling rig, for drilling five wells located offshore Norway on the North Sea. The unit will work at a dayrate of $422,000 and will contribute $127 million to the existing contract backlog.
The customer has also exercised an option to utilize Transocean Prospect, a semi-submersible drilling unit, for six months at offshore UK on the North Sea. The unit will operate operate at a dayrate of $425,000 and will also add $77 million to the existing contract backlog.
Transocean added that Transocean Siam Driller, a high-specification newly built jackup, started its five-year contract of operating offshore Thailand on Mar 26, 2013. Additionally, the company sold its standard jackup named Interocean III. The unit was held for sale earlier and the value of the transaction is not yet disclosed. Transocean also disclosed that the estimated out of service time for 2013 has gone down by net 6 days.
Switzerland-based Transocean currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
In the energy sector, Stone Energy Corp. (SGY - Analyst Report) , Range Resources Corporation (RRC - Analyst Report) and Cheniere Energy Inc. (LNG - Snapshot Report) display better fundamentals and currently carry a Zacks Rank #1 (Strong Buy).