Earnings Reports

Google Ad

Transocean, the world’s largest offshore drilling contractor and leading provider of drilling management services reported better than expected first quarter results Monday with a smaller than expected loss and more revenue.

Transocean Ltd (NYSE: $RIG) Reported Earnings After Close Monday

($0.30) Beat $(0.30) EPS AND $754 Million Beat $742.9 Million Revenue Forecast

Earnings

Transocean reported first quarter earnings on Monday with an EPS of ($0.30), $0.02 better than the analyst estimate of ($0.32). Total contract drilling revenues were $754 million (total adjusted contract drilling revenues of $799 million), compared with $748 million in the fourth quarter of 2018 (total adjusted contract drilling revenues of $770 million) beating the consensus estimate of $742.91 million. 

Earlier this month, the Switzerland-based company had reported its quarterly fleet status, stating that it added about $373 million in contract backlog, bringing total backlog to $12.1 billion.

Transocean NYSE $RIG

Market Reaction After hours 8.90 +0.100 (+1.14%)

Highlights

  • Total contract drilling revenues were $754 million (total adjusted contract drilling revenues of $799 million), compared with $748 million in the fourth quarter of 2018 (total adjusted contract drilling revenues of $770 million);
  • Revenue efficiency(1) was 98%, compared with 96% in the prior quarter;
  • Operating and maintenance expense was $508 million, compared with $497 million in the prior period;
  • Net loss attributable to controlling interest was $171 million, $0.28 per diluted share, compared with net loss attributable to controlling interest of $242 million, $0.48 per diluted share, in the fourth quarter of 2018;
  • Adjusted net loss was $181 million, $0.30 per diluted share, excluding $10 million of net favorable items.
  • This compares with adjusted net loss of $171 million, $0.34 per diluted share, in the prior quarter;
  • Adjusted EBITDA was $254 million, compared with adjusted EBITDA of $260 million in the prior quarter; and
  • Contract backlog was $12.1 billion as of the April 2019 Fleet Status Report. “

"Operationally, we delivered a strong quarter, with almost $800 million of adjusted revenue, driven by 98% revenue efficiency across our fleet,” said President and Chief Executive Officer Jeremy Thigpen. “Additionally, during the quarter, we added over $370 million to our industry leading $12.1 billion backlog, the majority of which was attributable to two new contracts with Petrobras for our recently acquired ultra-deepwater drillships, the Corcovado and the Mykonos.”

Outlook

“Over the past four quarters, we have secured over $2 billion in new contract awards; and, based on our recent customer engagements, it appears that the stabilization of oil prices, and the continued improvement in offshore project economics, have combined to provide our customers with the requisite confidence to move forward with more offshore projects.” “With the recent high-grading of our fleet, an industry-leading backlog, and a solid liquidity position, Transocean is well-positioned to capitalize on what we believe to be the early stages of a sustained recovery in offshore drilling.”

 

Offshore Drilling and Transocean NYSE $RIG

Offshore drillers carried much of the brunt of the oil price collapse and glut. Transocean's revenue and earnings rely on the top energy companies breakeven costs, capex and R&D. Costs are higher than for onshore drillers as such demand increases when oil prices are relatively higher.

In 2016, 28 of Transocean’s 57 rigs were either idle or completely mothballed. On the supply side, one should not look at the absolute number of the supply side.

The company has retired 31 rigs from its fleet over the course of the last two-and-a-half years.

Source:Transocean

About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world.

Transocean owns or has partial ownership interests in, and operates a fleet of 48 mobile offshore drilling units consisting of 31 ultra-deepwater floaters, 13 harsh environment floaters and four midwater floaters. In addition, Transocean is constructing four ultra-deepwater drillships and one harsh environment semisubmersible in which the company holds a 33.0% interest. For more information about Transocean, please visit: www.deepwater.com.

Live From The Pit

Log in to comment
Discuss this article in the forums (0 replies).