Image: Transocean Deepwater Asgard. Source: MarineTraffic.com
Investment Thesis
Transocean (NYSE:RIG) continues to be one of the best offshore drillers with a considerable backlog of $12.4 billion as of 12/28/2018 (including Ocean Rig). This amount doesn't include options that could add more than $8 billion after the acquisition of Songa Offshore.
Note: This article is an update of my preceding article published on Oct. 24, 2018.
Despite the recent drop in price, RIG remains my most significant long-term investment in the offshore drilling sector specialized in the ultra-deepwater and deepwater segment.
I'm a long-term shareholder and I've followed the company on Seeking Alpha for more than four years now. My recommendation has not changed, and I still recommend accumulating the stock for the long term, especially at this depressed level.
However, the drilling industry is extremely volatile and it's paramount to take advantage of this sharp volatility by trading short term a significant portion of your RIG position based on the future oil price outlook.
Complete Fleet Status estimated as of Dec. 28, 2018.
- Based on the Transocean fleet status released on Oct. 22, 2018, with adjustments. Click here.
- Transocean completed the acquisition of Ocean Rig UDW on Dec. 5, 2018.
- Transocean noted in the press release that the fleet including ORIG is comprised of "57 floaters, with 17 of the top 50 and 31 of the top 100 ultra-deepwater drillships in the industry." List InfieldRigs click here.
- Transocean announced a five-year contract for one of its drillship under construction to Chevron. Total backlog $830 million.
1. Rigs Under Construction
| #Ultra-deepwater Drillships | RIG | K feet | Delivery | Contract End | Day Rate K $ | Location |
| 1 | JSPL Ultra-deep Espadon TBN 1 ("1") | 12/40 | 2Q'20 | 2Q'25 | ~455 | [Chevron] GoM |
| 2 | JSPL Ultra-deep Espadon TBN 2 ("1") | 12/40 | 4Q'20 | Available | ||
| 3 |
