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Transocean - Increasingly Bullish Outlook If Newbuild Issues Can Be Addressed

May 05, 2021 1:36 PM ETTransocean Ltd. (RIG)VAL203 Comments
Henrik Alex profile picture
Henrik Alex


  • Discussing recent fleet status and earnings reports. Management more bullish than ever before in its expectations for near-term industry recovery.
  • Delayed delivery dates for newbuild drillships "Deepwater Titan" and "Deepwater Atlas" entitle customers to terminate the respective drilling contracts which would be a disaster for the company.
  • Transocean might be required to take delivery of the rigs even in case customers decide to walk away. Discussions with customers and shipyard are ongoing.
  • With increased demand finally meeting materially reduced rig supply, pricing power should return as the industry moves into 2022.
  • Wait for the serious newbuild overhang to be resolved before placing your bets on Transocean. Speculative investors looking for near-term industry exposure should consider Valaris which recently emerged from bankruptcy with ample liquidity and a strong balance sheet with no net debt.

Transocean Oil Rig Schiffe vor Elefsina, Griechenland vor Anker
Photo by Ion-Creations/iStock Editorial via Getty Images


I have covered Transocean (NYSE:RIG) previously, so investors should view this as an update to my earlier articles on the company.

Last week, leading offshore driller Transocean published another uninspiring fleet status

This article was written by

Henrik Alex profile picture
I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research at no charge to followers and the entire Seeking Alpha community.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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