Transocean LTD (NYSE:RIG) reported that Invictus was awarded a 2-year deal plus three 1-year priced options with a subsidiary unit of BHP Billiton. The backlog linked with the firm contract is around $106 million. This deal is anticipated to start in the Q2 2018.
Jeremy Thigpen, the CEO and President of Transocean, reported that they are extremely delighted to continue working with BHP Biliton. Since they welcomed the Invictus into their fleet in 2014, the combination of Transocean, the Invictus and BHP has delivered top performance; and, they look forward to extending their productive association through this multi-year deal.
In unrelated update, Bloomberg published a story today detailing Transocean’s retirement of six floating rigs that will result in write-off of $1.4 billion as an indication of just how dim the future appears for deepwater drilling.
Pathfinder is the most popular of six floating rigs the firm is retiring that will add up to a write-off of $1.4 billion. As per Heikkinen Energy Advisors expert David Smith, peers are following the same route, abandoning more rigs in the Q3 than have ever been disorganized in a 90-day stretch. Thomas Curran of FBR Capital Markets mentioned that deepwater will play a much-reduced role on the international oil-supply stage compared to what the industry anticipated as recently as three years earlier.
After oil prices plummeted in 2014, Transocean didn’t send all of its unsolicited rigs out to sea in the time-honored provisional holding arrangement where rigs keep working and crew remains on board, something termed as warm stacking that amounts to a daily bill of around $40,000. Instead, Transocean declined anchor on 9 high-tech ships 12 miles off the coast of Trinidad and Tobago and simply close the motors off.
In the last trading session, the stock price of Transocean declined more than 4% to close the day at $10.31.