Transocean LTD (NYSE:RIG) reported its plan to close the ultra-deepwater floaters Sedco Energy, GSF Jack Ryan, Cajun Express, Deepwater Pathfinder, Sedco Express, and the Transocean Marianas. The rigs will be stated as held for sale and will be reprocessed in a naturally responsible way. All six rigs were earlier cold stacked. The firm will identify an impairment charge of around $1.4 billion during the Q3 2017 related with these measures.
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Jeremy Thigpen, the CEO and President of Transocean, reported that they continue to improve the quality of their fleet through the addition of latest high-specification assets, and the closure of older, less competitive rigs. They remain committed to offering their consumers with the highest quality and most technically capable ultra-deepwater and harsh environment resources in the industry, and will continue to demonstrably assess their rigs and high-grade their fleet as the market advances.
In the Q2 2017, Transocean reported revenue of $751 million as against revenue of $785 million in the Q1 2017. Cash flows from operating plans came at $135 million primarily due to the collection of definite receivables. Capital expenditures of $136 million in Q2 2017 were mainly linked to the firm’s new build drillships.
The CEO of Transocean reported that they continue to efficiently and safely convert their industry leading backlog of $10.2 billion into cash. Across their international fleet, they have now run for 15 successive months without a single lost time event. The revenue efficiency once again surpassed 97%. And, despite a sequential drop in revenue, the Adjusted Normalized EBITDA enhanced to 49%. Thigpen added that in addition to this consistent and excellent operating performance, during the second quarter, they continued to further strengthen their balance sheet.
In the last trading session, the stock price of Transocean gained more than 2% to close the day at $9.32.