Transocean Increases Share Repurchase Authorization
Transocean Inc. (NYSE: RIG) announced that the company's Board of Directors has authorized an increase in the amount of ordinary shares which may be repurchased pursuant to the company's share repurchase program from $2.0 billion, which was previously authorized and announced on October 17, 2005, to $4.0 billion. As of today, the company has repurchased $600 million, or 8,593,251 of its ordinary shares under the share repurchase program. While the share repurchase program does not have an established expiration date and may be suspended or discontinued at any time, the company expects to repurchase approximately $3.6 billion of ordinary shares by the end of 2007, inclusive of the $600 million repurchased to date, subject to requirements generated by its success in signing additional newbuild contracts. The ordinary shares may be repurchased from time to time in open market or private transactions. The company's decisions as to when and how many shares to repurchase and the method and funding of such repurchases are based upon the company's ongoing capital requirements, regulatory considerations, cash flow generation and other factors. The company plans to continue to fund the repurchase program from current and future cash balances, but may also access its revolving credit facility to fund share repurchases. Transocean Inc. currently has approximately 325 million ordinary shares outstanding.
Also, the company reported that its Board of Directors has authorized an expansion of Transocean's revolving credit facility to $1 billion from the previous amount of $500 million.
Robert L. Long, President and Chief Executive Officer of
Transocean Inc., commented, "Our decision to increase the company's
share repurchase program to $4.0 billion reflects the substantial
increase in the company's contract backlog, which currently totals an
estimated $17 billion compared to approximately $8 billion in October
2005 and takes into consideration the improved outlook for
reinvestment opportunities. To date, we have signed contracts for the
construction of an enhanced Enterprise-class deepwater drillship and
two significant upgrades of our Sedco 700-series semisubmersible rigs
totaling in excess of $1.2 billion in capital investment. In addition,
we remain encouraged by the prospects for further deepwater
construction programs expected to be awarded in the near future and
are hopeful that the company may secure at least one additional
newbuild opportunity in the coming months. We believe the size and
timing of the revised repurchase program allows the company to
maintain the financial flexibility necessary to capture these
potential growth opportunities."
Manages 46 Offshore Rigs
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