Transocean Nets $252MM Deal for Newbuild Drillship

Transocean Nets $252MM Deal for Newbuild Drillship
Transocean Ltd. (NYSE: RIG) has revealed that BOE Exploration & Production LLC has awarded the company a $252 million contract for its Deepwater Atlas newbuild ultra-deepwater drillship.

Transocean Ltd. (NYSE: RIG) has revealed that BOE Exploration & Production LLC has awarded the company a $252 million contract for its Deepwater Atlas newbuild ultra-deepwater drillship.

The deal includes a mobilization fee of $30 million and provides for a “significant” performance bonus opportunity based upon agreed operating metrics, Transocean outlined. The company noted that this award results from the final investment decision of BOE and the Shenandoah working interest owners to sanction the previously announced Shenandoah project in the U.S. Gulf of Mexico.

Once delivered from the shipyard, the Deepwater Atlas is expected to commence operations in the third quarter of 2022, initially using dual blowout preventers rated to 15,000 psi. Upon completion of the initial drilling program, which is expected to last approximately 255 days, a 20,000 psi BOP will be installed on the rigmaking it Transocean’s second asset with a 20,000 psi-rated well control systemFollowing this installation, the rig will start the well completion program phase of the development, which is expected to last approximately 275 days.

“This is a significant milestone for Transocean, BOE and the Shenandoah partners, as we jointly venture into this new frontier of ultra-deepwater drilling,” Transocean President and Chief Executive Officer Jeremy Thigpen said in a company statement.

“We are extremely pleased to have secured the maiden contract for the Deepwater Atlas; the first of our two 8th generation ultra-deepwater drillships that will enter the market in 2022, both of which will be outfitted for 20,000 psi ultra-deepwater well operations,” he added in the statement.

“We are very encouraged by the growing list, across multiple customers, of 20,000 psi opportunities in the U.S. Gulf of Mexico. And, with the only two assets in the world specifically designed to maximize efficiencies for 20,000 psi well completions, we are the undisputed market leader in this space, and thus excited about the future prospects for these state of the art assets,” Thigpen went on to say.

Last month, Transocean revealed that it had been awarded two contracts in the U.S. Gulf of Mexico, which, on aggregate, contribute approximately $55.5 million in backlog. The deals were for the Deepwater Conqueror and Deepwater Asgard rigs.

Back in June, Williams (NYSE: WMB) announced that it had recently reached an export agreement with Beacon Offshore Energy Development LLC and its co-owner ShenHai, LLC, to provide offshore natural gas gathering and transportation services and onshore natural gas processing services to the Shenandoah development through the Discovery infrastructure in the central Gulf of Mexico.

Shenandoah, which is located 160 miles off the coast of Louisiana in the Walker Ridge area of the Gulf of Mexico,  is expected to come online as early as late 2024, Williams highlighted on June 16.

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