Transocean Ltd. (RIG)

[eastunder]

TRANSOCEAN LTD. REPORTS SECOND QUARTER 2023 RESULTS
https://www.sec.gov/Archives/edgar/data/1451505/000145150523000093/rig-20230731xex99d1.htm

Total contract drilling revenues were $729 million, compared to $649 million in the first quarter of 2023 (total adjusted contract drilling revenues of $748 million, compared to $667 million in the first quarter of 2023);

Revenue efficiency(1) was 97.2%, compared to 97.8% in the prior quarter;

Operating and maintenance expense was $484 million, compared to $409 million in the prior quarter;

Net loss attributable to controlling interest was $165 million, $0.22 per diluted share, compared to $465 million, $0.64 per diluted share, in the first quarter of 2023;

Adjusted EBITDA was $237 million, compared to $217 million in the prior quarter;

Cash flows from operations was $157 million, versus $(47) million in the first quarter of 2023; and

Contract backlog was $9.2 billion as of the July 2023 Fleet Status Report.

STEINHAUSEN, Switzerland—July 31, 2023—Transocean Ltd. (NYSE: RIG) today reported a net loss attributable to controlling interest of $165 million, $0.22 per diluted share, for the three months ended June 30, 2023.

Second quarter results included net unfavorable items of $55 million, or $0.07 per diluted share as follows:

$53 million, $0.07 per diluted share, loss on impairment of assets; and
$2 million, other discrete items, net.
After consideration of these net unfavorable items, second quarter 2023 adjusted net loss was $110 million, or $0.15 per diluted share.


Contract drilling revenues for the three months ended June 30, 2023, increased sequentially by $80 million to $729 million, primarily due to increased activity for rigs that returned to work after being idle in the first quarter, the commencement of operations of the newbuild Deepwater Titan and $19 million of revenues associated with the early termination of Transocean Endurance and Transocean Barents, partially offset by reduced activity for two rigs that were idle in the second quarter of 2023.


Contract intangible amortization represented a non-cash revenue reduction of $19 million. This compares with $18 million in the prior quarter.


Operating and maintenance expense was $484 million, compared with $409 million in the prior quarter. The sequential increase was primarily due to rigs that returned to work after being idle, the commencement of operations of the newbuild Deepwater Titan and higher costs associated with two rigs undergoing contract preparation.



Interest expense, net of amounts capitalized, was $168 million, compared with $249 million in the prior quarter. Interest expense included a non-cash loss of $46 million, compared with $133 million in the prior quarter, associated with the fair value adjustment of the bifurcated exchange feature embedded in our exchangeable bonds issued in September of 2022. Interest income was $11 million, compared with $19 million in the previous quarter.


The Effective Tax Rate(2) was 8.8%, up from (12.3)% in the prior quarter. The increase was primarily due to updates to our forecast to include losses on revaluation of our exchangeable bonds. The Effective Tax Rate excluding discrete items was 11.7% compared to (29.0)% in the previous quarter.


Cash provided by operating activities was $157 million during the second quarter of 2023, representing an increase of $204 million compared to the prior quarter. The sequential increase is primarily due to increased collections from customers, reduced payments for payroll-related items, and reduced payments for interest.


Second quarter 2023 capital expenditures of $76 million decreased primarily due to reduced spending for our newbuild rigs under construction. This compares with $81 million in the prior quarter.


“During the second quarter, we continued to benefit from increased demand for our fleet of high-specification floaters. As of our latest fleet status report, we secured an additional $1.2 billion of backlog at a weighted average dayrate of approximately $456,000,” said Chief Executive Officer, Jeremy Thigpen. “As evidenced by our customers contracting rigs well in advance of their programs and committing to long-term contracts, the outlook for our high-specification assets and services remains robust.”


Thigpen concluded, “In addition to securing contracts at market-leading rates, our focus remains on the flawless execution of our offshore operations to maximize the value of our $9.2 billion backlog for our shareholders.”

Non-GAAP Financial Measures

We present our operating results in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). We believe certain financial measures, such as Adjusted Contract Drilling Revenues, EBITDA, Adjusted EBITDA and Adjusted Net Income, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under U.S. GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP.


All non-GAAP measure reconciliations to the most comparative U.S. GAAP measures are displayed in quantitative schedules on the company’s website at: www.deepwater.com.


About Transocean

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a particular focus on ultra-deepwater and harsh environment drilling services, and operates the highest specification floating offshore drilling fleet in the world.


Transocean owns or has partial ownership interests in and operates a fleet of 37 mobile offshore drilling units, consisting of 28 ultra-deepwater floaters and nine harsh environment floaters. In addition, Transocean holds a noncontrolling ownership interest in a company that is constructing one ultra-deepwater drillship.


For more information about Transocean, please visit: www.deepwater.com.



Conference Call Information

Transocean will conduct a teleconference starting at 9 a.m. EDT, 3 p.m. CEST, on Tuesday, August 1, 2023, to discuss the results. To participate, dial [phone] and refer to conference code 623461 approximately 15 minutes prior to the scheduled start time.


The teleconference will be simulcast in a listen-only mode at: www.deepwater.com, by selecting Investors, News, and Webcasts. Supplemental materials that may be referenced during the teleconference will be available at: www.deepwater.com, by selecting Investors, Financial Reports.


A replay of the conference call will be available after 12 p.m. EDT, 6 p.m. CEST, on Tuesday, August 1, 2023. The replay, which will be archived for approximately 30 days, can be accessed at [phone], passcode 623461. The replay will also be available on the company’s website.