Transocean Ltd. (NYSE: RIG) announced today that it has agreed with
Sembcorp Marine’s subsidiary, Jurong Shipyard Pte Ltd (JSPL), on
the delayed delivery of the ultra-deepwater drillships Deepwater
Atlas and Deepwater Titan. As part of the agreement, JSPL has
agreed to accept deferred payment for both rigs.
The Deepwater Atlas and Deepwater Titan are the
world’s first eighth generation ultra-deepwater drillships and only
rigs to feature a 3,000,000 pound hook-load. These drillships are
the most capable and highest specification rigs in the world and
will include the first 20,000 psi well control system. In addition
to their state-of-the-art drilling capabilities, these rigs are
also designed and equipped to optimize fuel consumption, reduce
emissions, and thus minimize the associated carbon footprint of
each offshore project.
Deepwater Atlas: Delivery of
the drillship is now expected to be in December 2021. Upon
delivery, Transocean will make a $50 million payment to JSPL; the
balance of payments owed to the shipyard, or approximately $370
million, will be payable during a five-year period following
delivery pursuant to a secured financing arrangement with the
shipyard.
Transocean also has agreed with BOE Exploration
& Production LLC (Beacon) that drilling operations on the
Shenandoah project in the U.S. Gulf of Mexico are expected to
commence during the third quarter of 2022. Transocean expects
Beacon to commence drilling on its Shenandoah project utilizing the
Deepwater Atlas following a final investment decision from Beacon
and its partners. That decision is expected to be made on or before
July 31, 2021.
Deepwater Titan: Delivery of
the drillship is now expected to be in May 2022. Upon delivery,
Transocean will pay JSPL 80% of amounts owed, or approximately $350
million. Twenty percent (20%) of amounts owed, or approximately $90
million will be deferred and payable over a five-year period
following delivery pursuant to a deferred payment arrangement with
the shipyard.
Transocean also has agreed with Chevron U.S.A.,
Inc. (Chevron) that commercial operations of the Deepwater Titan
are expected to commence in the first quarter of 2023. Transocean’s
contract with Chevron maintains its duration and estimated backlog
of $830 million, excluding mobilization and reimbursables.
Payments under each arrangement will be made in
accordance with the respective payment schedules over the terms of
each arrangement. Principal balances will carry an interest rate of
4.5% per annum.
“These agreements clearly represent a monumental
achievement for Transocean. As the result, we will take delivery of
the two highest specification ultra-deepwater drillships in the
world, and the only two assets capable of drilling and completing
20,000 psi wells. 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,” said Jeremy Thigpen,
President and CEO.
Thigpen concluded: “On behalf of Transocean, I
sincerely thank JSPL, Chevron, and Beacon Offshore for their
significant contributions to this process. I would especially
like to thank our customers, as these agreements clearly
demonstrate the trust that they have in Transocean’s track record
of successfully introducing revolutionary new technologies to the
industry, and the confidence that they have in our ability to
consistently deliver safe, reliable and efficient drilling
operations across our global fleet. We are extremely excited about
these initial campaigns for the Deepwater Atlas and Deepwater Titan
and we are excited about the expanding list of 20,000 psi
opportunities requiring the extraordinary capabilities of these
rigs.”
About Transocean
Transocean is a leading international provider
of offshore contract drilling services for oil and gas wells.
Transocean specializes in technically demanding sectors of the
global offshore drilling business with a particular focus on
deepwater and harsh environment drilling services, and operates the
highest specification floating offshore drilling fleet in the
world.
Transocean owns or has partial ownership
interests in and operates a fleet of 37 mobile offshore drilling
units, including 27 ultra-deepwater floaters and 10 harsh
environment floaters. In addition, Transocean is constructing two
ultra-deepwater drillships.
For more information about Transocean, please
visit: www.deepwater.com
Conference Call Information
Transocean will conduct a teleconference call to
discuss this agreement at 11 a.m. EDT, 5 p.m. CEST, on Monday, June
7, 2021. To participate, dial +1 334-323-0501 and refer to
confirmation code 9073223 approximately 10 minutes prior to the
scheduled start time of the call.
The teleconference will be simulcast in a
listen-only mode over the internet and can be accessed at:
www.deepwater.com, by selecting Investors, News, and Webcasts.
A replay of the conference call will be
available after 2 p.m. EDT, 8 p.m. CEST, on Monday June 7, 2021.
The replay, which will be archived for approximately 30 days, can
be accessed at: +1 719-457-0820 passcode 9073223 and pin 1735. The
replay will also be available on the company’s website.
Additional Information and Where to Find
It
Supplemental materials that may be referenced
during the teleconference will be posted to Transocean’s website
and can be found on the Investor Relations home page at:
https://investor.deepwater.com/
Forward-Looking Statements
The statements described herein that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements could contain words such as "possible," "intend,"
"will," "if," "expect," or other similar expressions.
Forward-looking statements are based on management’s current
expectations and assumptions, and are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, actual results could differ
materially from those indicated in these forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, estimated duration of
customer contracts, contract dayrate amounts, future contract
commencement dates and locations, planned shipyard projects and
other out-of-service time, sales of drilling units, timing of the
company’s newbuild deliveries, operating hazards and delays, risks
associated with international operations, actions by customers and
other third parties, the fluctuation of current and future prices
of oil and gas, the global and regional supply and demand for oil
and gas, the intention to scrap certain drilling rigs, the success
of our business following prior acquisitions, the effects of the
spread of and mitigation efforts by governments, businesses and
individuals related to contagious illnesses, such as COVID-19, and
other factors, including those and other risks discussed in the
company's most recent Annual Report on Form 10-K for the year ended
December 31, 2020, and in the company's other filings with the SEC,
which are available free of charge on the SEC's website at:
www.sec.gov. Should one or more of these risks or uncertainties
materialize (or the other consequences of such a development
worsen), or should underlying assumptions prove incorrect, actual
results may vary materially from those indicated or expressed or
implied by such forward-looking statements. All subsequent written
and oral forward-looking statements attributable to the company or
to persons acting on our behalf are expressly qualified in their
entirety by reference to these risks and uncertainties. You should
not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the
particular statement, and we undertake no obligation to publicly
update or revise any forward-looking statements to reflect events
or circumstances that occur, or which we become aware of, after the
date hereof, except as otherwise may be required by law. All
non-GAAP financial measure reconciliations to the most comparative
GAAP measure are displayed in quantitative schedules on the
company’s website at: www.deepwater.com.
This press release, or referenced documents, do
not constitute an offer to sell, or a solicitation of an offer to
buy, any securities, and do not constitute an offering prospectus
within the meaning of the Swiss Financial Services Act (“FinSA”) or
advertising within the meaning of the FinSA. Investors must rely on
their own evaluation of Transocean and its securities, including
the merits and risks involved. Nothing contained herein is, or
shall be relied on as, a promise or representation as to the future
performance of Transocean.
Analyst Contact:Lexington May+1
832-587-6515
Media Contact:Pam Easton+1
713-232-7647
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