Transocean's Q4 weighed by lower rig demand, higher costs


Transocean (RIG) -0.9% AH as Q4 earnings and revenue fall slightly short of expectations, hurt by higher costs and a decline in fleet utilization.

Q4 average daily revenue rose 2.9% Y/Y, but the fleet utilization rate was 75%, down from 79% last year; Overall, costs and expenses climbed 5.7%.

Separately, RIG awards contracts to a Singapore shipyard to construct two ultra-deepwater drillships at an estimated $1.2B, and enters an option to order up to three more of the ships of the same design and specifications.

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Comments (7)
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    Anyone remember what $SDRL's utilization rates were?
    26 Feb 2014, 07:12 PM Reply Like
  • tankerat
    , contributor
    Comments (579) | Send Message
     
    Seadrill had 94% utilization for floaters and 98% for jackups...that's why the drillers with the old rigs are sweating...some of the old rustbuckets are gonna get stacked ...
    26 Feb 2014, 07:27 PM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    thanks tankerat I remembered it was in the 90% range... SDRL is so undervalued... if I could afford for it to be a bigger % of my port I would be buying any dip sub 37$.
    26 Feb 2014, 07:53 PM Reply Like
  • chopchop0
    , contributor
    Comments (5199) | Send Message
     
    With the way oil prices are and the domestic shale boom, I would not be in drillers, personally.
    27 Feb 2014, 12:41 AM Reply Like
  • echakim82@aol.com
    , contributor
    Comment (1) | Send Message
     
    Why?
    27 Feb 2014, 09:12 AM Reply Like
  • chopchop0
    , contributor
    Comments (5199) | Send Message
     
    Shale is cheaper to develop than deepwater. Eventually deepwater will have to be done as the domestic supplies wear out in 1-2 decades, but I have better places to put my money waiting for a deepwater boom that far out

     

    http://bit.ly/1pxTWeW
    27 Feb 2014, 09:24 AM Reply Like
  • tankerat
    , contributor
    Comments (579) | Send Message
     
    A common misconception, chop...shale is not that much less expensive than offshore per barrel...and the decline rates in shale wells are horrendous even in just the first year..and the reservoir sizes on offshore finds are massive and they can produce for decades...[If offshore wasn't competitive and shale was so cost effective offshore would have already died off] ...so...do a little research on this and see what you learn...

     

    [I have friends who work for the big players in the Eagle Ford..they well understand stuff like well economics, decline rates in shale, etc. They are a good resource for facts vs. assumptions..] TYR
    27 Feb 2014, 12:44 PM Reply Like
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