Transocean (NYSE:RIG) faced a slight dip of 0.4% in Thursday’s trading, despite announcing new contracts and extensions for six rigs in its fleet. The company’s latest quarterly fleet status report revealed a surge in its total contract backlog, reaching an impressive $9.2 billion.
The aggregate incremental backlog associated with the latest contracts amounts to approximately $1.2 billion. Assuming all contract options are exercised, the potential incremental backlog associated with these options could reach an impressive $480 million to $500 million.
Among the notable deals reported, TotalEnergies (TTE) exercised its option to add the drilling of one well in the Mediterranean Sea. This move ensures the Transocean Barents rig will remain engaged with the French company until January 2024 at a dayrate of $370,000, with two more one-well options on the horizon.
Equinor (EQNR) also joined the action by exercising six one-well options for the Transocean Encourage in Norway at a current dayrate of $464,000. Furthermore, OMV (OTCPK:OMVJF) and Wintershall exercised a one-well option in Norway at a dayrate of $365,000, along with three one-well options at a current dayrate of $420,000.
Despite the positive developments, the market response was somewhat subdued. However, Transocean’s robust contract backlog and the potential for further growth through exercised options offer promising prospects for the company’s future performance. Investors will likely keep a close eye on these developments to gauge Transocean’s growth trajectory in the coming quarters.
The recent Transocean contracts include the following notable awards:
- Seventh Generation Ultra-Deepwater Drillship – Secured a 1,080-day contract in Mexico at a dayrate of $480,000.
- Transocean Equinox – Received a five-well contract, along with a one-well option in Australia at a dayrate of $455,000.
- Transocean Equinox – Secured a sixteen-well contract in Australia at a dayrate of $485,000, with 21 one-well options at rates between $485,000 and $540,000.
- Transocean Endurance – Awarded a two-well contract in Norway at a dayrate of $385,000.
- Transocean Barents – Secured a one-well contract in Lebanon at a dayrate of $365,000, along with 3 one-well options ranging from $350,000 to $390,000.
- Transocean Encourage – Customer exercised six one-well options in Norway at a current rate of $464,000.
- Transocean Norge – Customer exercised a one-well option in Norway at a current rate of $365,000 and 3 one-well options at a current rate of $420,000.
- Transocean Barents – Customer exercised a one-well option in the East Mediterranean Sea at a rate of $370,000.
The cumulative incremental backlog associated with these contract fixtures amounts to approximately $1.2 billion. Additionally, assuming all contract options are exercised, the potential incremental backlog could reach a noteworthy $480 million to $500 million.
Despite these promising contract developments, Transocean’s stock faced a marginal 0.4% dip in Thursday’s trading. However, with a robust contract backlog and potential for further growth through exercised options, investors may look forward to a positive trajectory in the company’s future performance.
