Transocean Inc. reports the deepwater drill ship Discoverer Enterprise remains on location in the U.S. Gulf of Mexico at zero dayrate while continuing the investigation with respect to the riser separation which occurred on May 21, 2003. A significant portion of the riser string has been recovered and preparations are being made to recommence operations after completing some riser component treatment based on the results of the investigation to date. The company believes that this work will be completed within the next two to three weeks. Seven other Transocean deepwater drill ships use the same type of riser. As a precautionary measure, the company plans to schedule some downtime on the seven other drill ships to inspect the riser, but does not believe such downtime will be significant. Once the investigation and inspections are complete, the company will determine what modifications, if any, will be required. The eight Transocean drill ships that use this type of riser are the three Enterprise-class rigs (Discoverer Enterprise, Discoverer Sprit, Discoverer Deep Seas), the four Pathfinder-class rigs (Deepwater Discovery, Deepwater Frontier, Deepwater Millennium, Deepwater Pathfinder) and the Deepwater Expedition.
With respect to the second quarter, the company had previously stated that it expected deterioration in its financial results and identified a number of factors that were likely to lead to such decline in results. In light of the incident on the Discoverer Enterprise, unexpected downtime on several other rigs and an approximate $10 million loss of revenue due to the Nigeria labor strike, the company now expects revenues for the quarter ended June 30, 2003, to be at or slightly below first quarter 2003 revenue levels.