• Home
  • News
  • Transocean Ltd. reports 3Q 2018 results
  • 2018 October 30 13:15

    Transocean Ltd. reports 3Q 2018 results

    Transocean Ltd. (NYSE: RIG) on October 29, 2018 reported net loss attributable to controlling interest of $409 million, $0.88 per diluted share, for the three months ended September 30, 2018.

    Third quarter 2018 results included net unfavorable items of $439 million, or $0.94 per diluted share, as follows:
    $432 million, $0.93 per diluted share, loss on impairment primarily for two floaters previously announced for retirement;
    $4 million, $0.01 per diluted share, in acquisition costs; and
    $3 million loss related to other unfavorable items.

    After consideration of these net unfavorable items, third quarter 2018 adjusted net income was $30 million, or $0.06 per diluted share.

    Contract drilling revenues for the three months ended September 30, 2018, sequentially increased $26 million to $816 million due to higher utilization partially offset by lower revenue efficiency on the company’s ultra-deepwater fleet.

    Contract drilling revenues included customer early termination fees of $37 million on the Discoverer Clear Leader in both the second and third quarters. The third quarter also included a non-cash revenue reduction of $29 million from contract intangible amortization associated with the Songa acquisition. The second quarter non-cash revenue reduction from contract intangible amortization was $30 million.

    Operating and maintenance expense was $447 million, compared with $431 million in the prior quarter. The sequential increase was the result of the reactivation and contract preparation costs related to Development Driller III and Deepwater Nautilus, increased quarterly maintenance costs and legal fees associated with a dual activity patent settlement; offset by reduced operating costs and the recovery of certain legal fees in Norway.

    General and administrative expense was $35 million, compared with $52 million in the prior quarter. The decrease was primarily due to charges in the second quarter of 2018 related to the early retirement of certain personnel and a legal reimbursement, partially offset by third quarter Ocean Rig acquisition costs.

    Depreciation expense was $201 million, down from $211 million in the second quarter of 2018. The decrease was primarily due to the previously announced floater retirements.

    Interest expense, net of amounts capitalized, was $160 million, compared with $148 million in the prior quarter. The increase was due to the senior secured notes issued during the third quarter of 2018 partially offset by senior secured term loan facilities assumed during the Songa acquisition that were retired. Capitalized interest was $8 million in the third quarter of 2018, compared with $7 million in the prior quarter. Interest income was $11 million, compared with $13 million in the prior quarter.

    The Effective Tax Rate(2) was 6.7%, up from (8.0)% in the prior quarter. The increase was due to the relative blend of income from operations in certain jurisdictions and a tax benefit on the pre-tax loss in the third quarter. In addition, the second quarter of 2018 included a reasonable estimate of transition taxes associated with U.S. tax reform (“2017 Tax Act”).

    Cash flows from operating activities increased $211 million sequentially to $214 million primarily due to the collection of certain receivables, decreased income tax payments, insurance prepayments, and interest payments.

    Third quarter 2018 capital expenditures of $48 million were primarily related to the company’s newbuild drillships. This compares with $39 million in the previous quarter.

    “We continued to operate at a high level in the third quarter, with revenue efficiency again exceeding 95%, resulting in quarterly revenue of $816 million,” said Jeremy Thigpen, President and Chief Executive Officer. “We also delivered an industry-leading Adjusted Normalized EBITDA margin of 42% through the efficient conversion of our industry best $11.5 billion backlog.”

    Thigpen added, “We remain encouraged by the increase that we are experiencing in floater contracting activity. Over the past three months, as a testament to our fleet quality, operating performance and customer relationships, we secured almost $500 million of new backlog, bringing our 12-month total to over $1.5 billion.”

    Thigpen concluded, “In preparation for an offshore recovery, during the quarter, we also continued the high-grading of our fleet by announcing our agreement to acquire Ocean Rig. With its strong balance sheet, and fleet of 11 high-specification ultra-deepwater drillships, two of which are currently under construction, and two harsh environment semisubmersibles, Ocean Rig presents us with a unique opportunity to continue enhancing both our fleet and our optionality as the market recovery unfolds. We look forward to a favorable shareholder vote at our Extraordinary General Meeting scheduled for November 29, and to ultimately closing the transaction in December.”

    Further to the above referenced Ocean Rig acquisition, Mark Mey, Executive Vice President and Chief Financial Officer added, “Consistent with our objective of protecting near-term liquidity, last week we successfully issued $750 million of seven-year priority guaranteed notes replacing the committed Ocean Rig acquisition financing with permanent financing.”

    About Transocean
    Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services, and believes that it operates one of the most versatile offshore drilling fleets in the world. Transocean owns or has partial ownership interests in, and operates a fleet of 41 mobile offshore drilling units consisting of 23 ultra-deepwater floaters, 12 harsh environment floaters, two deepwater floaters and four midwater floaters. In addition, Transocean is constructing two ultra-deepwater drillships and one harsh environment semisubmersible in which the company holds a 33.0% interest.

2022 January 21

19:15 PortNews’ week updates and insights summary
18:20 More than 600 boxships stay off ports waiting for berth space, Seaexplorer disruption indicator shows
18:07 Green Innovation Fund adopts joint project on “Mass-production and Cost Reduction of Floating Offshore Wind Installation”
17:44 The new Stena Baltica has debuted on Stena Line’s Baltic Sea route from Ventspils to Nynäshamn
17:16 Port of Los Angeles breaks cargo record in 2021
17:06 Finnlines strengthens Germany-Sweden route with a fourth ship
16:36 Maersk opens its logistics center for South Western Europe at port of Barcelona
16:03 Dublin Port sees a small reduction in volumes in 2021
15:24 Kongsberg Digital joins the NorthWind project to develop digital twin technology for offshore wind
14:03 ClassNK issues Approval in Principle for ammonia-fueled Panamax bulk carrier developed by Planning and Design Center for Greener Ships (GSC)
14:02 TGE Marine announces completion of largest LNG Bi-Lobe Type C Tanks
13:23 Samskip adds 150 new sustainable reefer containers to its fleet
13:01 Icebreakers remain busy assisting shipping of the Gulf of Finland eastern part
12:13 Freight volumes increase at the Port of Gothenburg in 2021
12:12 Nippon Paint Marine’s new fastar antifouling earmarked for Cosco Shipping VLCC fleet
11:42 RZD invested heavily in its rolling stock upgrade in 2021
11:31 DP World launches a premium barge service between the Upper Rhine region and Rotterdam World Gateway
11:03 Israel orders three new submarines from thyssenkrupp Marine Systems
10:31 Port of Oakland import volume hit new record in 2021
10:11 Crude oil prices drop on US oil reserves growth
09:32 MABUX: Global bunker prices may slide down on Jan. 21
09:21 Baltic Dry Index as of Jan 20

2022 January 20

18:35 EuroDry announces agreement to acquire a 2014-built Supramax bulker
18:05 Valaris announces floater contract awards
17:43 Alfa Laval experiences increased demand for solutions related to LPG as fuel
17:26 Throughput of Chinese sea and river ports in 2021 climbed by 6.8% YoY
17:15 The U.S. Army gets $22.81 billion in supplemental funding of studies, projects and programs
17:05 Sanmar Shipyards delivers fourth powerful compact tug to SAAM Towage
16:50 Cargo traffic on IWW of Russia in 2021 rose by 1.2% to 110.3 million tonnes
16:35 Uber Boat by Thames Clippers builds the UK’s first hybrid high speed passenger ferries
16:15 American Cruise Lines unveils Project Blue
16:05 TGE Marine announces the completion of the tank building phase for two large LNG cargo tanks
15:31 Hafnia plans to acquire 12 modern LR1 tankers
15:25 Holland Shipyards Group develops new tug EDDY 24-50 E
15:05 ZIM announces new chartering agreement for three 7,000 TEU LNG dual-fuel container vessels
14:40 Exports of LNG and gas condensate from port Sabetta exceeded 19 million tonnes in 2021
14:11 Stena Line and Associated British Ports sign £100M deal for new ferry terminal at the Port of Immingham
13:45 Federal authorities asked to step into situation with coal transportation by Russian Railways
13:19 MABUX: Bunker Weekly Outlook, Week 03, 2022
13:12 Norside buys the platform supply vessel 'Farland' for offshore wind
12:46 New ICS guide helps seafarers navigate the digital bridge
12:08 The Harbour Master’s Division of the Port of Rotterdam Authority makes it through the second corona year unscathed
11:51 Port of Long Beach sets annual record with 9.38 million TEUs
10:46 Global Ports' consolidated marine container throughput increased by 2.8% y-o-y in 2021
10:10 Increase of cargo predicted for the Port of Riga this year
09:33 MABUX: Global bunker prices may turn over downward correction in the end of the day
09:25 Crude oil market sees downward price correction
09:08 Baltic Dry Index as of January 19

2022 January 19

18:20 New SGMF publication provides expansive and highly relevant guidelines on safe bunkering of LNG
18:03 ESL Shipping sells the barge Espa
17:52 High efficiency Wärtsilä power solutions to drive seven new Arctic Shuttle Tankers
17:50 Euroseas announces new charter for its 2,788 TEU, 2004-built vessel
17:33 Freeport of Riga Authority to invest almost EUR 1 million in implementation of port digital technology and IT solution projects this year
17:15 ABS, SDTR and SDARI develop methanol-fueled bulker
16:54 Thistle Wind Partners land 2 GW in ScotWind offshore wind leasing round
16:26 Results of Russian ports in 2021: infographics and analytics
16:05 Port of Blyth orders Konecranes Gottwald Generation 6 Mobile Harbor Crane
15:40 Equinor awarded 26 new production licences on the Norwegian continental shelf
14:56 Oboronlogistics’ Sparta IV to deliver project cargo to India
14:29 Sea Port of Saint-Petersburg increased its throughput in 2021 by 17% YoY