Transocean Limited Reports Results for the Second Quarter of 2022

Transocean Ltd. reported a $68 million, $0.10 per diluted share net loss for the quarter ended June 30, 2022. Operating and maintenance expenses were $433 million, up from $412 million. Effective Tax Rate excluding discrete items was (5.2)% vs. (22.8%) in the previous quarter.

Transocean Ltd. reported a three-month net loss of $68 million, or $0.10 per diluted share.

Contract drilling revenues for the three months ended June 30, 2022, increased sequentially by $106 million to $692 million, primarily due to three rigs that returned to work after being idle in the prior quarter, increased dayrate for three rigs, higher revenue efficiency, and one additional calendar day, partially offset by reduced activity for two warm-stacked rigs.

Contract intangible amortization reduced non-cash revenue by $30 million in the first quarter of 2022.

Operating and maintenance expenses were $433 million, up from $412 million. The sequential increase was due to returning the three rigs to work and higher fleet maintenance costs.

General and administrative expenses were $43 million, the same as in Q1 2022.

Interest expense, net of capitalized amounts, was $100 million, down from $102 million. The previous quarter's interest income was $2 million.

The current quarter's Effective Tax Rate(2) was 4.7% and 17.6% in the prior quarter. The change in rate was primarily due to reduced loss before income tax expense and reduced tax expense, but the loss before income tax movement was much greater, shifting the effective tax rate. Comparatively fewer uncertain tax positions were released this quarter. Effective Tax Rate excluding discrete items was (5.2)% vs. (22.8%) in the previous quarter.

Second-quarter 2022 operating cash flow was $41 million, up $42 million from the previous quarter. The sequential increase is due to higher second-quarter operating activity and lower payroll-related and interest payments.

Second quarter 2022 capital expenditures increased from $106 million to $115 million due to payments related to the company's newbuild drillships under construction, including the final milestone payment for the delivery of Deepwater Atlas in June 2022.

“The Transocean team continued to operate at an extremely high level throughout the second quarter, once again delivering safe, reliable, and efficient operations for our customers,”

said Jeremy Thigpen, Chief Executive Officer.

“Our strong uptime performance and contractual bonus conversion resulted in revenue efficiency of approximately 98% across our global floater fleet.”

Thigpen added,

“While the past eight years have been extremely challenging for the entire industry, it is clear that the recovery in offshore drilling is underway, as contracting activity, utilization rates for high-specification ultra-deepwater and harsh-environment assets, and dayrates all continue to rise. And, with a backdrop of hydrocarbon supply challenges, we are increasingly encouraged that this momentum could continue for the foreseeable future.”

Source: Transocean news