Transocean posted a third quarter loss of $1.4billion due to impairment related to rig retirements.
The impairment cost for the sidelining of six floaters totaled $1.3billion. Adjusted for impairment, Transocean’s net income for the quarter was $64 million. The firm, which acquired Songa Offshore, posted a 97.1% revenue efficiency rate.
“Despite the challenging environment, we continue to operate at a high level, delivering another quarter in which Revenue Efficiency exceeded 97% and Adjusted Normalized EBITDA margin approached 50%,” said Jeremy Thigpen, president and chief executive officer.
“In addition to the strong operating results, during the quarter, we continued the high-grading of our fleet by announcing our intent to acquire Songa Offshore, which includes the addition of four new, high-specification, harsh environment semisubmersibles. We also announced our decision to recycle six additional floaters, further improving the overall quality and competitiveness of our fleet.”
Thigpen added: “During October, we issued $750 million of senior unsecured debt with the intent of retiring our near-dated maturities. This action, coupled with cash flow from operations of $384 million, and the anticipated incremental backlog of approximately $4 billion attributable to the Songa Offshore transaction, further extends our liquidity runway, and positions us well for a market recover.”
General and administrative expense was $39million, up from $35million in the second quarter of 2017. The increase was due largely to acquisition costs related to Songa Offshore. Depreciation expense was $197million, down from $219million in the second quarter of 2017. The decrease was primarily due to the sale of the jackup fleet in the second quarter of 2017.
Contract drilling revenues for the three months ended September 30, 2017, decreased $6 million sequentially to $699 million. Fleet utilization improved to 52%, compared with 44% in the prior quarter, reflecting the positive impact of the warm-stacked reactivation of the ultra-deepwater floaters, the Deepwater Asgard and Development Driller III, and the harsh environment semisubmersible Transocean Barents. The increase in activity was partially offset by the divestiture of the company’s jackup fleet in the second quarter of 2017.
Contract backlog totals $9.4billion as of October 2017.