Transocean Signs Offshore Drilling Contract at $505,000/day
Offshore drilling contractor Transocean has announced an offshore drilling contract at a bargain price above $500,000/d amid continued demand for high-performance offshore drilling rigs.
General Director D. Thigpen spoke about this during the webcast of the April 29 report on Transocean’s profits for the 1st quarter. 2024
Deepwater Asgard contract details:
- In the previous contract, the freight rate was $440,000/day.
- Transocean signed 2 drilling contracts in the Gulf of Mexico in November 2022 for a period of approximately 14 months of work.
- In the 1st quarter, the company’s situation improved, and Transocean’s adjusted net loss for the 1st quarter. 2024 was $22 million, $00.03 per diluted share.
Superhuman optimism by Jeremy Thigpen:
- the agreement highlights the limited market for high-performance floating installations;
- there is a steady demand for high-performance offshore drilling rigs of the 6th and 7th generations and an increase in daily freight rates;
- with the increase in daily rates and the extension of terms, the financial obligations of our clients have become much more significant, which required more approvals from our clients and their partners;
- as of April 17, 2024, Transocean’s total outstanding obligations were approximately $8.9 billion;
- We remain encouraged by the demand outlook and expect to secure numerous long-term contracts over the next few months.
Earlier this week, rival Valaris announced a 60-day option on the VALARIS DS-17 drillship to Equinor offshore in Brazil at a rate of $497,000/day.
Freight rates of around $500,000/day for two companies already signal that the offshore drilling rig charter market is slowly picking up since the long downturn in the offshore drilling industry began in 2014.
Offshore Drilling Market
Wood Mackenzie Forecast for 2024 Number of Drilling Rigs:
- growth of operating drilling rigs from 111 units. in 2023 to 123 units. in 2024, which will correspond to the level of 2019;
- in 2019, these rigs were only 69% loaded, in 2024 the utilization rate will be 88% due to the smaller overall size of the rig fleet;
- for comparison, in 2023, the utilization of the Drilling fleet was 82%.
Freight rate:
- shallow water work averaging $250,000/d in 2024 compared to $240,000/d YoY;
- heavy-duty drilling increased from $370,000/day to $390,000/day;
- ultra-deepwater drilling – an increase from an average of $410,000/day to $430,000/day.
