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Transocean Secures $1.1 Billion in Backlog After Equinor and Shell Contract Approvals

BullishMedium impact
RIG$5.51 −0.54%

Transocean Ltd. (NYSE:RIG) has expanded its firm contract backlog by approximately $1.1 billion. This growth comes after an existing $1.0 billion agreement with Equinor was fully approved and converted into firm backlog. Additionally, the offshore drilling contractor secured a new contract with A/S Norske Shell valued at roughly $62 million.

The backlog addition provides the company with substantial revenue visibility and secures long-term utilization for its fleet. The Equinor agreement involves three harsh-environment semisubmersible rigs. Meanwhile, the new Shell contract covers a two-well program in Norway lasting about 120 days, which also includes a one-well option and is scheduled to start immediately after the rig finishes its current campaign.

Investors will likely monitor how these contracts translate into future earnings as work begins. The commencement of the Shell work in direct continuation of existing programs helps minimize idle time between projects. Shareholders will also watch for whether Shell exercises its option for an additional well, which could further boost backlog figures. Following the announcement, shares of the company rose 2.78% to $5.54.

Key points

  • Transocean Ltd. added approximately $1.1 billion in firm contract backlog.
  • An agreement with Equinor worth $1.0 billion for three semisubmersible rigs has been fully approved.
  • A new two-well contract with A/S Norske Shell in Norway adds about $62 million to the backlog.
  • The Shell drilling program is expected to run for approximately 120 days and includes a one-well option.

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Questions and answers

How much backlog did Transocean add from the Equinor and Shell deals?

Transocean added approximately $1.1 billion in firm contract backlog, consisting of a $1.0 billion approved agreement with Equinor and a $62 million contract with Shell.

What are the details of Transocean's new contract with Shell?

The contract with A/S Norske Shell is for a two-well program lasting about 120 days in Norway, adding $62 million to the backlog, and includes a single-well option.

Which rigs are involved in the Equinor agreement?

The Equinor agreement, which has now been fully approved, covers three harsh-environment semisubmersible drilling rigs.