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Transocean Secures Important CAT-D Rig Contracts With Equinor - Buy On Weakness

Mar. 28, 2023 9:34 PM ETTransocean Ltd. (RIG)EQNR78 Comments
Henrik Alex profile picture
Henrik Alex


  • Company secures eagerly-awaited follow-on work with Equinor for two of its so-called Category D ("CAT-D") rigs at respectable terms.
  • Total firm backlog addition amounts to $382 million. Both rigs will be upgraded at the expense of Equinor.
  • While Transocean will take a slight cash flow hit under the new contract terms, rates are actually among the highest awarded offshore Norway in recent years.
  • While the company still needs to secure near-term work for the harsh environment rigs Transocean Equinox, Transocean Endurance, and Transocean Barents, Tuesday's announcement represents a major step forward in navigating ongoing weak market conditions in the North Sea.
  • While I wouldn't chase the shares after the most recent recovery rally, investors should consider adding on any major weakness.

Semi Tauchboot Transocean Sedco 704 an der Nordsee

arild lilleboe/iStock via Getty Images

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

After the close of Tuesday's regular session, leading offshore driller Transocean announced

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 stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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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