Transocean Ltd. (NYSE: RIG) has secured additional contract fixtures for two of its harsh environment semisubmersibles in what is the latest development in the recovery of the offshore drilling industry from a prolonged downturn.
Combined, the fixtures represent a $113 million in firm contract backlog.
The Transocean Endurance was awarded a multi-well plug and abandonment contract in Australia by an independent operator. This lucrative 240-day contract, slated to commence in January 2024, will contribute an impressive $91 million to the company’s backlog. The contract, which excludes fees for mobilization, also offers a series of options that could potentially keep the rig operating in Australia through the fourth quarter of 2025.
Meanwhile, in Norway, Wintershall DEA has exercised a one-well option on the Transocean Norge. The well is set to begin operations in May 2023, ahead of the existing firm term, and is expected to add an additional $22 million to the backlog over a 60-day period.
Transocean’s Chief Executive Officer, Jeremy Thigpen, expressed optimism about the company’s performance, citing these fixtures as “additional evidence of the strength of this cyclical recovery, notably for our harsh environment assets.” Alongside the recent awards for the Transocean Enabler and Transocean Encourage with Equinor in Norway, the company has successfully added an incremental $494 million in backlog from its high-specification harsh environment fleet.
In releasing Transocean’s fourth quarter and full year 2022 results in February, Thigpen highlighted that the company had secured its largest annual backlog addition since prior to the industry downturn in 2014.
“As an industry, it is clear that we have finally emerged from eight exceptionally challenging years and are now in the early stages of what we believe will be a multi-year upcycle. To maximize value for our shareholders during this upcycle, Transocean will continue to secure high-quality backlog, maintain our acute focus on operational excellence, exercise capital discipline, and take the necessary steps to right-size our balance sheet,” Thigpen said.