Public Companies

Transocean 3Q loss jumps to $381 million on plan to exit shallow water

by Patrick Flanagan

Offshore drilling rig contractor Transocean Ltd. said Nov. 6 that its third-quarter loss ballooned to $381 million, hurt in large part its expensive plan to exit the shallow water rig market.

The Zug, Switzerland-based company owned the Deepwater Horizon rig that caught fire and sank in the Gulf of Mexico in April 2010, killing 11 people and leading to the worst offshore oil spill in U.S. history.

Transocean, which has major operations in Houston, owns or has a stake in a fleet of 115 mobile offshore drilling units, according to the Associated Press.

For the quarter ended Sept. 30, Transocean's loss amounted to $1.06 per share and compared with a loss of $32 million, or 10 cents per share, in the same quarter last year.

The majority of the charges were related to the company's plan to exit the standard jackup market. Jackup rigs typically stand on the ocean floor in relatively shallow waters.

In September, the company announced it would sell 38 of its shallow water rigs for about $855 million in cash. The majority of Transocean's revenue is generated by its ultra-deepwater high-specification fleet, so the company is focusing on developing that business.

Excluding one-time items, the company said it posted an adjusted profit from continuing operations of $499 million, or $1.37 per share.

Revenue rose 23 percent to $2.44 billion from $1.99 billion, as contract drilling revenue increased 26 percent to $2.31 billion.
The adjusted earnings beat Wall Street predictions, while the revenue fell short. Analysts, on average, expected earnings of 76 cents per share on $2.53 billion in revenue, according to a FactSet poll.