Transocean LTD (NYSE:RIG) faces pressure related to profit margins


Dallas, Texas 09/04/2013 (Financialstrend) – It is expected that many of the offshore drilling contractors such as Transocean LTD (NYSE:RIG) would face pressures related to profit margins in the near future, primarily due to heavy increase in the supply of rigs in the market. Such an increase in supply would result in the lower level of utilization of rigs supplied by the companies or would present lower day rates for the use of some of the lower specification floater rigs. To add on to this pressure of heavy supply, it was also observed that the demand had been sluggish in the markets of Brazil and West Africa. It thus appears that the situation is getting worse for both the mid water and deep water rig contract suppliers such as Transocean Ltd. which would in turn hit heavily on the profit margins.

This company had stayed to be the largest provider of offshore drilling contract services in the international markets for the exploration and production activities related to the oil and gas wells. The company holds the advantage of specializing in technically demanding sectors with primary focus on harsh environment and deepwater drilling services and is found to be operating one of the highly versatile offshore drilling fleets across the globe.

Transocean LTD (NYSE:RIG) presented gain in share prices on Tuesday to close at $45.32 per share which was an increase of 0.42% over previous close. The intraday prices of the stock moved in the range of $45.10 to $45.85 per share and the 52 week prices are at low of $43.65 and high of $59.50 per share. The stock on Tuesday reported trading volume of 1.88 million shares and the average level is at 2.61 million shares per day. Presently the company has 360.41 million shares traded in the market with institutional ownership at 62%.