Transocean Inks New Contracts, Extensions; Sees More Downtime

Drilling contractor Transocean Ltd. reported late Wednesday several new contracts and contract extensions valued at approximately $662 million.

The company also increased its expected downtime estimate for this year by 117 days, Transocean reported in its fleet summary update. However, 75 percent of this downtime is related to preparations for a new ultra-deepwater award at a leading-edge day rate, according to a May 16 analysts note for Barclays Research.

This downtime includes 89 days due to shipyard acceleration into 2013 from 2014 and contract preparation for the Deepwater Millennium (UDW drillship), which has been awarded a two-year contract through February 2016 by an unnamed operator for work offshore Australia. The rig currently is drilling the Kiboko-1 well for Anadarko Petroleum Corp. offshore Kenya, according to Rigzone's RigLogix database.

Deepwater Millennium will work at a day rate of $605,000, higher than its previous day rate of $545,000. The new award represents a $442 million estimated contract backlog, Transocean said in its rig fleet summary.

Transocean also received a three-month contract through October for Jack Bates (DW semisub) from an undisclosed operator for work offshore Australia. The rig currently is drilling the Bassett West 1 well, according to RigLogix.

ConocoPhillips awarded a two month extension through February 2014 to the Transocean Legend (mid-water semisub). The rig will work at a day rate of $440,000, higher than Barclays' previous estimate of $325,000 and higher than its current rate of $293,000, Barclays analysts noted.

Transocean John Shaw (mid-water semisub) has also been awarded a one-year contract extension for work in the UK North Sea at $415,000, up from the rig's previous day rate of $360,000. The rig has been working for TAQA Bratani in the region.


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