Transocean Inc. to Report Net Loss for Second Quarter 2003

Transocean Inc. announced that it expects to report a net loss for the three months ended June 30, 2003 of between $0.13 and $0.15 per diluted share. Excluding the impact of the $14 million ($0.04 per diluted share) after-tax loss from the early retirement of debt and $26 million ($0.08 per diluted share) of after-tax charges associated with asset impairments described below as well as the effect of a $15 million ($0.04 per diluted share) favorable resolution of a non-U.S. income tax liability, the company anticipates results for the quarter to be a net loss of between $0.05 and $0.07 per diluted share.

The company reported that in addition to a previously announced after-tax loss of approximately $14 million resulting from the early retirement of debt, it expects to recognize an approximate $14 million after-tax charge relating to the impairment of a note receivable from Delta Towing Holdings, LLC, the U.S. inland marine and shallow water support vessel business in which the company owns a 25% equity interest. Also, quarterly results are expected to include approximately $12 million of after-tax charges pertaining to the impairment of five jackup rigs belonging to the company's Gulf of Mexico Shallow and Inland Water business segment, one mid-water semisubmersible rig and one self-erecting tender rig following the decision to remove the units from drilling service.

The company also reported that its deepwater drillship Discoverer Enterprise has recommenced operations following a riser separation incident on May 21, 2003. Inspections of seven other Transocean deepwater drillships utilizing the same type of riser have been completed, with minimal downtime experienced on the rigs for these inspections. The company is exploring whether modifications of the riser systems employed on these eight deepwater drillships are necessary. If modifications are required, they are currently expected to be made over the balance of 2003 and into early 2004 at a total repair cost approximating $10 million.

The riser separation incident on the Discoverer Enterprise, combined with unexpected downtime on other rigs and the estimated $10 million loss of revenue from the Nigerian labor strike, is expected to result in a decline in total revenues in the second quarter of 2003 to approximately $604 million compared to $616 million reported in the first quarter of 2003. In addition, operating costs during the second quarter are expected to exceed the previously announced guidance of $400 million to $410 million largely due to the unexpected costs of approximately $15 million associated with the Discoverer Enterprise riser incident, the labor strike in Nigeria and the well control incident on inland barge Rig 62.

Transocean further stated that it anticipates a difficult earnings environment for the remainder of 2003 driven mainly by lower than expected profitability within the company's Gulf of Mexico Shallow and Inland Water jackup and barge fleet and diminishing opportunities for semisubmersibles and drillships in the North Sea, Brazil and Southeast Asia. The company has previously noted that a decrease in earnings can substantially increase its effective tax rate due in part to the effect of operations in countries with revenue-based taxes. The deterioration in 2003 profitability is now expected to result in an effective tax rate of approximately 38% on 2003 earnings, excluding the impact of the above-described asset impairments and debt retirement loss. The application of the higher rate to earnings for the first six months of 2003 is expected to result in a charge for income taxes in the second quarter significantly higher than previously anticipated, offset by the tax benefits relating to the asset impairments, debt retirement loss and favorable resolution of the non-U.S. income tax liability.

Transocean will report earnings for the six months ended June 30, 2003 on the morning of Tuesday, July 29, 2003. Following the earnings report, expected to be released prior to the commencement of trading in the United States, the company will conduct a teleconference call at 10:00 a.m. EDT on July 29. Individuals who wish to participate in the teleconference call should dial 212-329-1455 approximately five to 10 minutes prior to the scheduled start time of the call.

In addition, the conference call will be simulcast through a listen-only broadcast over the Internet and can be accessed by logging onto the company's Worldwide Web address at and selecting "Investor Relations." It may also be accessed via the Worldwide Web at by typing in the company's New York Stock Exchange trading symbol, "RIG."

A telephonic replay of the conference call should be available after 1:00 p.m. EDT on July 29 and can be accessed by dialing 303-590-3000 and referring to the passcode 544298. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses. Both replay options will be available for approximately 30 days.