Earnings call transcript Q4 2022

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Operator

Good day, everyone, and welcome to the Transocean Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later you will have a opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call will be recorded and I’ll be standing by if you should need any assistance.

It is now my pleasure to turn the conference over to Alison Johnson, Director of Investor Relations. ahead. go Please

Alison Johnson

schedules, Good at XXXX Todd. press welcome Transocean’s posted statements to covering non-GAAP disclosures Thank measures financial conference morning, call. quarter are and supporting with earnings results, our our reconciliations A fourth and financial regarding website you, on along and including deepwater.com. copy release of

and and me this morning’s Mark Executive Mackenzie, President Adamson, Keelan Operating President on Commercial call Officer; Chief and Officer; Joining Officer. and Executive Mey, Chief Executive Vice President Vice Officer; Roddie are Jeremy Financial Chief Chief Thigpen,

management During matters the are subject course certain may and historical of make risks our based certain to to statements forward-looking this company various and uncertainties. call, upon regarding Such and are expectations not Transocean facts. assumptions, statements therefore, business and that certain related are current

Many refer cause future statements certain Please impact that to to our differ for could our risks more factors materially. forward-looking actual for regarding information uncertainties and filings could results and results. SEC our

Also, that statements. or update no revise undertakes please duty the forward-looking note to company

conduct Jeremy, will prepared and question-and-answer session Mark’s comments, we our Keelan, with Following team. a

Thank initial this and speak, please one opportunity to one give to the During yourself I’ll to follow-up to more an limit now much. Jeremy. time, participants you question. turn over very question call

Jeremy Thigpen

Thank our welcome analysts employees, to today’s you, call. and participating Alison, customers, investors, on and

to awarded on full fourth in earnings when fixtures the have million margin quarter, year very in were EBITDA fourth million on which approximately EBITDA yesterday’s $XXX the Transocean us note. an quarter a XX%, the for combined positive in XXXX release, adjusted reported a new helped revenue, $XXX of resulting adjusted we close As of with adjusted in delivered

materially Transocean. announcements, January by XXXX primary And will rates be contracting Transocean pivotal remembered rates Offshore throughout industry, December a Indeed activity for demand. particularly year and this the contract in our we beneficiary to and as a significantly, day increased evidenced the higher utilization year. of offshore drilling driving think as heightened continues that be

months time marketing a secure several added approximately helped during last the billion rewarding us have $X say our the year busy Transocean to bringing $X.X incremental backlog quarter, full but backlog very to been in an Needless the team billion. as to they for

As awards, Gulf a $XXX,XXX recent reminder Mexico, our three-well with was estimated the an Deepwater contract independent U.S. awarded of Invictus per of an in days. day contract at XXX operator for the a

expected tender pool Brazil, quarter is contract In to commence for the to contracts year. day in have services. including Deepwater this Orion finalized. been the The per continuation and at for approximately program. current contract KGX selection start rigs expected contract a the integrated Deepwater in The awarded is third previously Brazil, of the of disclosed $XXX,XXX XXX-day Also direct and Corcovado the was the

quarter of Deepwater As was and four-year $XXX,XXX in Corcovado the $XXX expected the a of this Orion is a at a was Deepwater commence awarded rigs is to fourth begin per in contract direct to program. The reminder, at current contract expected and day per three-year awarded year. day continuation

busy Concern one last to on wells $XXX,XXX days a option [indiscernible] contract keeps on its XX of at and Development incremental expected III. Energy quarter. well the rate exercised The the Driller per with rig third day through

now contract per this $XXX,XXX approximately In XXX days the incremental and firm. for with average of Wintershall Transocean Nordic term Norway, previously rate options disclosed are day Dea The under day. OMV is

XXX and operator with UK a a one Sea rate commence major well days. per Transocean work The was anticipated contract last In the Barents to day. of quarter a at $XXX,XXX awarded is approximately North this

expected $XXX,XXX exercised of XXX North its Loyd with additional extended [indiscernible] contract the the Sea UK to wells the in at terms also and Paul quarter Jr. third third days B contract the day. of on Finally Harbor the XXXX. last and Energy option The per

have busy legal you’ve our and finance been also in extremely see supporting no transactions. a doubt As organizations variety of

In a to these with venture market. minority drill Perestroika, Rock load, to two November, and excited market offshore load partner Partners drilling another have bring with Deepwater in deep ultra high we to joint of we’re stake Lime Liquila organizations announced a the Ventures, high our that the Aquila hook deepwater understanding – ship

the As operations joint early refined certain we improving financing secure the our venture our the on rig. partners, maintained In series and market part to the Transocean agreement right January, raised of we Titan with of our secure of exclusive liquidity. notes also this Deepwater and manage

other sheet balance discuss moments. will few a our and Mark these in efforts to simplify

size Additionally, investment candidate a for nodule GSR, conversion this and a transaction Global in which deep-sea of an the Resources Sea our earlier drillships, or Olympia. was month, Ocean contribution company, to this exploratory Rig of collection including vessel. on The of criteria, optimal whole Mineral we stacked number mineral ease one Olympia of announced the included our based

will GSR, for this Contribution although rationalizes – shareholders time. In over investment, and of fleet to further our environment transition vessel. asset the the of non-controlling of benefiting we rig, this prove floaters a be global with ultimately our believe nine better a also a GSR rationalizes further exchange interest received operations responsible use in for of

investment in deep-sea the This is exploration second industry. Transocean’s minerals

Through purchased play energy carbon global we lower interest Ocean a and supply transactions, these to last diversification excited contributing in year – Ltd. of economy. Minerals recall, a are you we the As to minority

also throughout accomplished Our projects teams operations XXXX. key and objectives

miles, the with from that months Atlas share longest commences Deepwater contract a drilling the the XX-inch I’m to to run the X.X its delivery has shipyard. Titan record and made pleased be Offshore very set nearly likely for just first Notably, Beacon casing of few in asset. its records Atlas already with this operation, of – the of the many took we class first new of Deepwater new set

these two further eighth drillships. state-of-the-art In fact, to Keelan? discuss hand at it this Keelan over time, I’ll generation to

Keelan Adamson

construction start good key and complete you, Thank Atlasand eighth our project of I and and Deepwater two like state-of-the-art the drillships to thanking our dedication by teams, for our their Titan. operations Marine and would Sembcorp the Jeremy, Deepwater commitment morning suppliers all. off to generation to remarkable

I and our that Chevron, would trusting wells us the and work them or Beacon technically contracted their commercially development industry for Atlas and Energy infeasible. thank previously drilling to drillships have represent rigs newest XX on of who also generation of capable either with projects. like respectively Offshore were These Titan customers leading completing deepwater the

of and functionality projects opens Titan of developed such packages yet as control be to door complete discuss preventers. Atlas We psi XX,XXX two XXK outfitted the other blowout Gulf Mexico. and often the Anchor and This many drillships in well the assets. U.S. the with these capability first be the Shenandoah Indeed, primarily will prospects including

This to designs well. and boards run immediately facilitate of net to addition first these per pounds. and and X strings, Atlas Perhaps are more improved production costs. million with heavier lifting therefore their translate foreseeable optimize production allows well future, In fitted larger our lower well the development and for casing and importantly, tubing which capable to drillship customers capacity Titan their increase field the designs and a longer well XXK capability the only can ultimately

the also well development drills activities areas which world of feature to most opportunities. completion capable the rigs, are ultimately universe extends accommodate the exploration deck and The and and space expand in of purpose-built will

of new expect our its fleet. will and expertise, Titan, we Transocean to into us refine and fleet and drillships the return rigs contract bringing enabled have in our and on invaluable Atlas our has active fleet nine now had the prove contract a and to as decade. and yard of brought delivery out which build of the on the efficiency the These Expertise, of put to fully a we operating marked capability With idle ships them past impact total stacked additions service. to the

the revenue expectation the will of is builds would extraordinary work cost are time these level of our build months the new safely, at floater, with achievement we six and any in which that new learned first starting efficiently. We serial look A equipment. reactivate as apply completing expectations, our the line successful rigs reactivation with operations to average stacked of equipped cold builds and since only a one reliably project perform operation, an within lessons new also efficiency from but variety assets. be not Our rig is especially number scope these for delivery fleet

To achieve data operational is this, a robust have service driven, oriented. drilling contractor a performance operational Transocean’s must management culture and focused system.

decisions. processes fleet. at These make resulting and last the multitude tools the and across excellence right technologies these delivery pillars, the right with of our provide in we implemented to operational our right of several Over people support information to the years, developed time a the

our of allows Technologies us procedure which our are call, to include a OPS, and manage application checks digital with designs the people deliver time, ability our a that risk vision operations effectively, system, monitor equipment and real facilitates discipline health platform condition verification provides smart barrier permit analytics, custom procedural tasks, execution. necessary the identify work, and work flawless to our and in which which to and equipment

cycle, technology, rigs forward into with As level the them industry shareholders. long most Transocean the for opportunity the to our preparing of Because by this manner to they’ve service bring our has overdue safest, the We and bringing best through company our downturn and ensure highest this back fleet idle people, operational embarks contractors in of effective the on the drilling that our experience operations investing been grow reliably, and cost fleet back performance. restarting capability safely, assets the a in look our to to for into operational challenges efficiently. and must reality overcome returns high steadily

back I to that, With hand it Jeremy. will

Jeremy Thigpen

Thanks, is of topical. Keelan. reactivation very prospect a The

or drillships highest cold the to is XX% near assets not currently all that the above of active XXX%. remain Active are As utilization utilization next at our or expected or two drillship years. warm With for contracted. at of specification stacked

our foreseeable the remain that services will for We the future. rigs for and expect elevated demand

XXXX In as fact, expected, demand to cannot tendering starting that aware we’re met XXXX supply the of active if drillships. work current the in and current bid opportunities of by be develop and

we estimated be Indeed, we there the in XX XX of return an rig our XX an in pay Rig new that, of combination and our initial position the environment a fees, for over programs that robust. anticipated absolutely rate and next day term rig months, acceptable total are plus awarded work. a contract. the reactivation not for use will reactivate entire to said of customers, is harsh unless Having demand [ph] were a firm mobilization

demand Importantly, of XXXX. this this nearly in drilled is Consistent with XX% outlook, increase number by the wells offshore industry analysts predict globally diversified. will

been has drilling demand under of continued a years services up awards, tenders. of floater XX lead and an to last in to for existing this source with currently up be important incremental Brazil open we continue the two for Petrobras for to Brazil XXXX. contracted these may offshore potential to expect eight demand

the anticipate will assets in reactivated higher some exhausted, to XXXX which from as XXX% of incremental XXXX. demand from – to and in new active region which fixtures requiring driving have upgraded will regions, to Importantly, that rates, demand support the day to supply continue already be We Brazil. decline is other is be the need mobilized

we highest While activity in is loads, to long-term the local highest we under supply relatively tight currently typically don’t of expected Mexico Gulf balance. the keeping currently This demands see which demand are contract. rigs remain the the and all and Brazil, U.S. hook relative with same with of volume specification region see

could direct our bring the demand. on on rigs there West demand the and region a also sufficient into Additionally, negotiations, Mediterranean experienced long-term or we more one Africa future return believe that of two programs. based to are

tenders in opportunities with including are Energy, Azule multi-year with Angola venture relatively duration and there Romania one in short OMV. between While and are one Eni a many joint BP in multiple

rigs to by encouraged satisfy current this available To fulfill India, KGX there as upcoming to no in these is requirements, up this currently XX% will the to our Brazil, rig ONGC its predicted from as require are following region uptick drilling in to and the three year. tenders. heading We ultra-deep In and the announcement requirements nearly need region. that is to be are mobilized other and regions water rigs increase will

India. anticipate As on in awards such, these than higher rates to awards be the we most recent

deficit believe Africa, happens, holistic anticipate work In more elsewhere. the we opportunities to semis months and UK, other least and a a North the departed of market, contracted multiple at in specification be even the six West for Norway to harsh this high have XX If – months, semi-submersibles semis last two Norway Taking will environment additional be Canada, Sea. harsh for departed in Australia. expected supply there in will next Norway have the Norway regions, view get potentially We XXXX. environment XX for in in

incentives XX in approximately in As the tax the encouraged sanctioned. record two previous sanctioning calls, past projects with half mentioned totaling wells Norway years and over XXX

As comeback this will expected require see rigs to believe in demand. demand, a XXXX to from to Norway’s activity floater heightened return translates market we the meet will that strong

In we be through prevailing active environment, should for sustained well of well floating reducing of specification summary, focus acute high the day turn starkly continue to support on our specification in the and trajectory should our other reliable, we a as we anticipate for debt efficient and upward recovery. is floaters positioned on is operations strong remains shareholder available Transocean secure as An will multiyear expect to the continue and what fleet backdrop outlook safe, high rates. [ph] which prosper of value demand delivering deliver as supply our positive, customers assets exempt longer term, bid,

I’ll to now turn Mark. the call over

Mark Mey

all. good call, Thank then our full as as results expectations you, XXXX. Jeremy, first and the provide well day will recap today’s fourth I for update quarter and of for briefly Through to an year guidance quarter

to an will update on our XXXX. I liquidity forecast Lastly, provide

I’d actions take review few to minutes the management liability a last have the like over taken to numerous year. we

XXXX. opportunistically transactions two extended Deepwater provided an further through market XXXX, the stage Then on transactions our a Last a in the secured the transactions, million we market. today’s capital medium and Titan sheet. notes, of June, oversee which refinancing the the financing balance month securities improved July, in series our the of term In $XXX and more with September $XXX liquidity. environment of incremental set $X.XXX improve and and of our materially contracted rate facility we of credit us executed exchange were simplify million company both broader four senior well billion revolving we First of by that liquidity context our for interest get these flexibility delever, or in

Now to results. the

release, certain results of our yesterday’s As the or diluted adjustments fourth loss on net $X.XX of for detail press loss reported we controlling $XXX million. to share. in attributable additional in adjusted XXXX, release, are interest press of net $XXX After per the which reported million we include reported quarter stated

cash offset flow $XXX fourth our And from $XXX of During innovation million, which the drillships. reflected quarter into CapEx mentioned quarter flow million EBITDA This the I adjusted approximately shipyard of $XXX million translated the earlier. million Titan, as associated the we $XXX of raise generated operations [ph]. in cash was payments in negative with XH subsequently free with for our Deepwater

fourth our than average of bonus Looking anticipated delivered day This $XXX our strong and revenues of contract results, rate more closer at reflects the and an approximately above revenue. recharge quarter, is drilling revenue we adjusted million guidance at higher days, $XXX,XXX. during operating than expected

due expected timing in-service to lower Operating to other guidance, mainly and for service and maintenance due is This $XXX costs. lower was both and fourth our maintenance below mostly quarter expenses, expense P&L million. the than

in ended and million undrawn cash sheet, of billion, the XXXX flow credit including million restricted approximately cash $XXX $XXX facility. million, for we of liquidity unrestricted balance service approximately quarter fourth of total approximately $XXX a equivalents the revolving of our from cash cash debt and $X.X

degree performance. financial based our Revenue for includes in level also on We’re Report, component, we a full contracts the Status [ph] primarily confidence. as firm listed and have a guidance expectations quarter now of year speculative which on providing but first updates is high Fleet

bonus potential revenue is guidance. from Any excluded

first higher revenue the XX.X%. than average expect This to increased upon by quired XXXX, fleet fourth activity of operating quarter. certain revenue on quarter to efficiency partially based $XXX due largely slightly we XXXX, drilling days rigs contract of is quarter the an of For adjusted million fewer offset

last For revenues quarter, the also $X anticipating between to billion full efficiency. XX.X% year and guided on and $X.X as revenue I’ve interested billion, based we’re be

guidance as we progresses, modify may necessary. as the year usual, our As an

the O&M We the first to This and costs service quarter-over-quarter Orion the million. is increase Deepwater contracts in lower slight maintenance primarily included quarter attributable activities. preparation approximate to be in in of partially KGX expense $XXX offset expect by Brazil, contract due relation to for higher

approximately the and be expense For to participating full earn $X.X year, we’re billion.

G&A and and $XX between million for approximately be the expect to million ranging We expense year. $XXX for quarter $XXX this million

to associated fair for charges forecast exchange quarter is non-cash a $XX of the interest with approximately quarter exchangeable in $XXX million. be further Excluding capitalized XXXX the the approximately adjustment interest value net our basic of embedded expense million. in first This includes bonds feature issued third of

approximately including for of million, $XX are for anticipating capitalized Cash quarter be we’re million quarter year, interest taxes $XX first million. CapEx of approximately This $XX for approximately of million $XXX expense including includes maintenance of for expenditures the $XX $XX interest million net approximately $XX approximately will year. million. full first the interest new For to million be Capital forecast capitalized expected CapEx. approximately build and approximately the the and within

December we and highlight in required guidance approximately $XXX for includes of cash between revenue CapEx for includes maintenance $XX and Our $XXX the the fleet-wide million Brazil which particular billion million cost million million related of long-term program. [indiscernible] in of maintenance CapEx contractually schedule for our in two Orion contracts a bills to the which million KGX CapEx Deepwater $XXX and The million CapEx. our new our of mainly $XX billion, expectations facility for to as and $XXX including is and is the website reserved and XXXX forecast XXXX our expected million, $XXX liquidity capacity that restricted of our of $X.X liquidity service. approximately This revolving be and credit is reflecting $X.X

In positioned way. past capital months us actions capital significant We one may debt improving further upgrades and progress clearing CapEx have our XXK BOP over well reliability XX board conclusion, new liquidity on our includes for spend. mobilization, interest capital The structure. our the

our We focus on right balance sizing will now sheet. simplify and

our average increase rigs which Report. more for with flows leveraging. feed We is contract approximately already $XXX,XXX day transition seeing free our with this cash estimated day indicated higher to to Fleet rates, people As in per year-over-year rate of Status day other organically contract accelerate as $XX,XXX model approximately

the in to we we As of recovery, this the cyclical continue. are train early expect stage

the current to in that ability stated last have program. of we I do our [ph] data our reduce not the plan plans for organically ATM without As overtime equity the use market We drilling our the supports sales to incremental quarter, believe utilize offshore equity.

continue creates and delivering as Operationally shareholders. supports will, however, safe, delivering We reliable, our operations, deleveraging which actions and to value for our pursue remain sense. goals we that when ultimately makes and focused, efficient

my turn I’ll concludes This prepared to now over comments. back Alison. it

Alison Johnson

now Thanks, Todd, ready we’re questions. Mark. to take

As please one to one and a question. the initial yourself limit participants, reminder to follow-up question

Operator

Thank first you, with question Alison. [Operator Instructions] Lewis from comes BTIG. Greg Our

Greg Lewis

afternoon the the last everybody. Thank on getting title over good that and rig work work, the years done congratulations to clearly last was you, KGX your Jeremy, you rig. have good and couple guys morning on all and

year be, there to clearly ahead year, of some are As rigs. going in look have and we next in the this your reactivated competitors

reactivating willingly alluded more. to rigs customers You’ve and to are in come demand as pay

make to think the demand to about, on be rig Does or meet think wave are side going of over rigs next ability we the later two needed current and the maybe market to what’s Transocean the to reactivate your going it that into on the early years? we of side to As in the reactivations, sense come for market.

Jeremy Thigpen

thanks question, don’t Greg. for anything. to alluded I Hey, quick think we’ve the

suitable for customer term form to the mobilization pays some returns. reactivations, in the been for position and day that to, reactivation that payment they’re and Transocean, or party some with we’re mixture may generates the itself, very for in a to if that, upfront we’ve for actually contract, reactivation clear reactivate of that. And the or to that it it think lesser than on than I first fees our and so more has plus okay on rate peers mean return that willing pay spec our later we’re of by

Roddie Mackenzie

I so discipline, often that tenders Roddie it’s to is to to this kind I add demonstrate awards talk little us bit, Yes, think, negotiations. of that to get individual and for difficult here, about a and

in results However, on know public a which couple as the there you all Brazil, tenders are published. is, great one there’s fully are where example, certain

the where we So in basket, for tender awarded job a to also lot $XXX,XXX be the day line, the in pool won the Orion, day. we example that the and next was on rig a in one with were the two rig that’s rate

we upon, but went just the return since the of return to However, you not that and the we that have away disclosed one to Petrobras take that that going be that so according didn’t the forward our approach tender the should not the from the cash wait very, this award then that’s next flows have adequate. we into took next the we out, contracts to operator a moved walked reassure we as wanted that and decided publicly timeline to lease That’s putting be kind very which was when and on details went execute and results some through through information of public did from going of meet We’ll disciplined the turns see further. because $XXX,XXX or to seriously of and to provide contractor, that they [indiscernible] aside the stepped how we just DS-X, rig Petrobas that the any tender, the And we requirements, see that. at the day. to their discipline

Greg Lewis

the North Yes, it it’s this seems in higher. in like we’re important Norway, these – pricing’s air to company. multiyear the it and going want I going the harsh XXXX. we’re just because to like pocket to Yes, heading did EBITDA driver shift seems Sea to to are be in an for contracts fleet, be gears

something one rigs, rigs CAT maybe and opportunities, is Africa, as I depth relying and in the the you rig, idle the feet some but more it’s could X,XXX XXXX? the Southern guess rebound call, developing say, in we like what like about the of these for we it one and of work? let’s rigs, that those of these, kind potentially water rigs Australia I lines and mentioned think those Norway, to a just on where that find or Or outside wait [ph] along market’s of is we a, of some how West see have place manage know – the CAT maybe As we North some market think Sea, that about

Roddie Mackenzie

Yes.

Okay. I’ll one. Great question. take that

from, of had So about interesting at What’s the see Norwegian you the as Jeremy Norwegian in years, excess available and numbers are compare period moving XXXX. out you in rigs XX, where market that that look to XXXX, two explained, the XXXX you like basically dropped six to rigs at we of to look the market. down rigs about rigs there’s in XX in of them XX available that number is, if has of we a in and supply in

to Canada. also rigs and some Africa to stuff West out be about the So, that There’s more are are region, than about a lot some the one to you’re as even going the talking growing maybe Australia, to seems where going the going that that’s but to moving you that’s rigs UK even in further. the going have, think West about stuff of Africa, of speculation they’re effect

units in was packages. South efficiency certain drilling them targeting And from with be to the that had the really larger with merge tender expect that we’ve high interesting specifically in we operators America, is next thing discussions going

CAT-Ds spec the So of in harsh that high any for the other likes environment the of would or Norway. ideal be rigs

on elsewhere that key driver. little So a little, earlier, to just basis bit cost with be than so mentioned that’s going a to you margin Norway a higher being it touch and is the

fully now four pointed more once mobilizations the pretty move these for as three or make you expect over And seen the of margins and outside. move kind see of hurdle customers So out, six got rigs movement are out, better you’ve soon. out, Jeremy rigs paying those when to you’ve the those

essentially With So environment them have increased rigs back. jobs including our and all sight our those. to the of hurdle for it’s for those all about placing say harsh CAT-D environment going come details for really an including on of to I Norway, of to to come the stacked we fleet, be that of we’re safe negotiations in all said, it’s can’t that, CAT-D the much disclose harsh in stack active pretty but to for line back that

you’re the trajectory the get to going you’ll harsh raise rigs. think see all that on them. few fixtures rigs much pretty rates day environment and I those eyebrows in the those year, a associated this see the locations rates of for over period of And should of terms and

Greg Lewis

Okay. Thanks time. day. a for the everybody Great. have Roddie, thank Hey, great you and

Operator

Thank you.

Our next Eddie question from Barclays. comes Kim with

Eddie Kim

Hi, good morning.

biggest So from group force beholden locking we’ve guys so and point But obviously are rigs the for their getting the a of them large to are multiple Petrobras seen to of clearly the where has rigs, many is that. years? demand we going haven’t to because have multi-year almost many majors seen this is just beneficiary in absorbing a contracts Petrobras most yet, quite to likely that investors. hand up driven past a been nine which we been months, mostly lot loader But by as you shifting the majors, just

Roddie Mackenzie

Yes.

the is that really would what’s So that majors now been I have happening. see And quiet.

contracts some would We appear the are for fact, there Mexico. In majors. the we and it like the be two-year signed in are contracts to that slower. Gulf several multi-year moving know by But signed our others they with contrast of majors of

we would the seven years, But move Petrobras really moved Petrobras is at faster ever smart level. because impresses their mid-XXXs here than I affected what on the very bargain a rigs is Petrobras they argue at and from different they’re bulk but progressing but prove in is view they’ve everybody. they’re context think moving a The tenders past rates, available clip that absolute in [ph]. day point time to going get an be they’ll the to of because consider would of solid will I

that, to that, rates our kind the And for Jeremy other into your that’s inflection once will said, as of where of tier point the typically not we point, And the there prospects. next be on of rates, XX% get course comes. supply those utilization much had left

Not optimistic are mainly we’re to lot Brazil, and in Africa only we really longer-term. focus a West world, contracts look, can really So but to because are long-term push volume they’re the that. particularly because we beginning about beginning majors on the around the of see

going the will made multi-year the West to African few nature. over fixtures see region, be in next will in that you’re several months So be

others So it the makes Board. so you’ll Petrobras across look it moving just that I the think are is that It’s like quickly, not. see

Eddie Kim

rates Got for it. moving Got it. forward. That sounds day very positive

one highlighted to costs, higher your competitors cost crews Just this so offshore support. in year of onshore for shifting yesterday

of level about one something rig guide? rig in moving or OpEx range. costs in seeing embedded talked kind your Another up high-single O&M well? Is is per digits year uptick that that full kind currently the in And as expecting peers of of your you’re

Keelan Adamson

Thanks, yes, Yes. ongoing the your Yes, labor you seeing and labor that X% cost the blend in similar area the costs. somewhere Eddie. X% market, increases, clearly plus we’re with tight currently O&M say I’d both inflation to if

yes. So

Eddie Kim

Got it.

I’ll for that all Thanks color. turn it back. Understood. Okay.

Operator

you. Thank

Clarksons question please next come And sir, Securities. Fredrik with will from Our Stene go ahead.

live. is Your line

from Fredrik question looks try another like Okay. we Securities. Stene ahead. next with Clarksons We’ll Please line our go have

Fredrik Stene

guys you can hear Hey, me now?

Jeremy Thigpen

hear here. you please. can Yes, We sir,

Fredrik Stene

Okay. Perfect.

and I’m happened thank team, for there, Sorry and Jeremy hey, not for good today. sure – but you what update

of there. my I you but help could been covered, Mark, maybe me some out think questions have

in year, you prepared the work proper the balance mentioned over as done remarks. the sheet some You’ve on last

But said might – to more you work do. you also there be that,

what be color sizing some and thinking def sensible balance that timing about rewind have would level around in you and to we at terms you any your and go right have sheets, also that? share but on simplifying are able now, next definitely would steps – wise how You more high of

Mark Mey

Yes.

comments, cycle. never over the ourselves flow. higher have Fredrik, cyclical as of Transocean saying buy that, delever goal in question. rates we’re in actions Look, So generating great mentioned been months a the – we’ve last was XX we I as in a a a of can We since prepared result and cash I significant now day down Well, taken time. joined the my XXXX. to I’ve this some

unsecured, different simplify, be down our to Clearly, take there’s other is of to our the means so secured, from to four the so types and and prepared focus our and balance clearly the sheet. on them there’s By on but over debt PGNs simplifying we debt you one first is organic going by then to know, sheet. sheet, time moving So balance got look sheet. as those into at delever of using we’ll the grow these but flows time, taking SPGNs, balance there eventually, And we types there PGNs. are balance four

exchangeable have we bonds. then And thirdly,

or that tranches us on have over address the of We the table next so. for three year to also

Fredrik Stene

you investment own other about you helpful. first Super Two market quick owners the ones managing go will How stacked example your covered to. me, the and you’ll for older the have your which versus how one, how rights [ph]? for marketing Aquila, also assets, there that

Mark Mey

as you in to a you’re experienced the Norga Perfect. avoid you’re the didn’t a very team the doing clean if in we of have marketing antitrust any whereby similar third aware, concerns. think well maintain process that’s this, referring have own clear, hear case, but we we I and a interest Fredrik, I we to kind Aquila,

So, the that if we’ll Libra use get approach with we the and perhaps rig Aquila the well. as same

Fredrik Stene

Thanks. of there’s many How – year? chain peers super you Do supply have per the handle to think will you and quick reactivations. time? guys for Do And do Perfect. any limit your many Thanks. at same can reactivations that? reactivate how you the idea the global

Mark Mey

obviously a or that each perfect their the foots at at XX what least to take rigs Brazil, And not But line this you rig of given right a and seen believe contracts from operator a fact activate [ph] stacked well. in any rig now Korea. that in know, there’s on don’t start first contracted contract, to a we’ve are the I are cold sitting several to conjunct projected rigs the and at elsewhere these I are as shipyard this year. to think going months We consensus own think really requirements that those because completed equipment their can Jeremy the yards contracts be in that cold is South I’m and around the as the rigs, stab opportunity. XXXX, are in West from in being it’s are has prepare and of that Africa already throughout for

you it’s by the upfront also of the there measured risk unless sure going amount paid mainly it’s sheet a customers. So supports required that program balance I’m to this of look to not reactivation I because at come of but cash it through fact of especially, the be drillers if are significant wholesale those restructuring. the think because constraint, And is do this.

Fredrik Stene

That’s Thank Right. Thanks. from all much. me. you so

Operator

Thank you.

Stanley. Johnson Our with from question Thomas Morgan next come will

Thomas Johnson

Hi, on should thanks. work do there how the Clearly, update issuance much work an are us give maybe for outlook assume higher. Titan. in Atlas. Question we that relative you conversations think if for Deepwater quick the that that, you following mid-XXXX on how similar that to give potential or could of going rig But and on to addition secured would contract the Thanks. that be kind sign expiration. on a maybe to any us And update rates capacity today, would we just against the the about

Jeremy Thigpen

Yes.

Okay. so I’ll in [indiscernible] follow-on work one. that contract. Yes, after take discussions we’re for

some I on still out, was about several interesting know the the in record we record a high hook main Keelan the longest have bites one few super Deepwater that of say in Conqueror. this through And that’s gets And of rig on set Gulf to of – we before the Mexico. set most there’s the had [indiscernible] as But but contract. that, a them So pointed days is load. XXk the are before the – in which the of space, features while

now capacity. stressing market Atlas for was that her So And loads. really in maximum higher those we to the hook the have available even her

be We thinkthere’s can real XXk do rig. we’re course really she only with and that. ultra about optimistic So she that assay, that and demand the these strings, happens casing heavy for to of

basically a her in kept fronts, available So all and we’ve capable most the rig concept on the is have we relatively near-term situation.

what’s So her. to going come we’re very next for optimistic about

Thomas Johnson

maybe a Great, on has a what commentary potential contract maybe Titan? receive, just announced to any relative secured were plans And you Atlas to capacity the on just recently thanks. been the issuance or if on multi-year then for

Mark Mey

that. Thomas, but we for it, get don’t think all see that crack to I moment, bit we we a the need Yes, clearly when at

Thomas Johnson

I’ll Got it it. Thanks. turn back.

Operator

Thank you.

next with comes Energy David Partners. Pickering question Smith Our from

David Smith

good Hey, morning and thank you.

So up looking at the of floater little a year SPS is I their increase rigs mix for special fleet the this twice we the surveys as and market third or marketed in fleet, second many next to on year, coming think close entire see growing. floater

needs demand. rationalized are and busy the reactivations, So last industry of OEMs lot time, the in At same the to new some stranded four have delivery capacity maybe growing like accommodate feels shipyards it years. a

question, different for maybe reactivation I you slightly So among actually taking reactivation. a governing that as there. wanted on a constraints, contractors were prior mentioned ask angle think But if cash to I factor a

to wanted if to the petrol you capacity OEM floaters of active see years? a and see – for Just constraint in next the growing do shipyard supply be on couple

Mark Mey

significantly because capacity XX it as having you’ve reason months least the the [indiscernible]. challenges OEMs that during to Clearly, our are Yes the reduce of takes indicated, at they reactive because do. rigs, we that the

we’re up, drilling these something Keelan as now substantially. demand And I’ll the pause to challenges they’re improved because see So starting has from to add. has contractors there. see And ramping

Keelan Adamson

those us, and their a and equipment on hand you’ve continually chain have able capability, suppliers side reactivation. agreements around but the to have our we major their to our projects collaboration key have we confident at also take care are our look those important No, suppliers supply that agreements very not with Mark, from to and it at restrictions we I covered would understand demand plan very with add only their that I well, engaged we think are capital forecast the through that handle to that we look

I So say collaboratively that it working remove it. ways But to is to would find a we’re restriction.

Jeremy Thigpen

past some in as and the ways the because at can’t we industry. add so overbuild, what is can’t chain the the healthy and to just I drilling contractors done supply actually in be we’re some think overbuild that We with Sorry, to the in of for capital it’s recovery OEMs ways, and why an that, challenges do and prolonged point a shipyards in industry facing that’s the we going this we’ve time. constraints

bunch should And the be growth will really adding day so And a as rates slow, fleet. growth through longer. while steep the come breaks to be last it’ll of will to and opposed

David Smith

the color. Appreciate all

in view many have how Brazil might you And sorry if working XXXX? a I missed on floaters be it, off but do

Jeremy Thigpen

looking maybe significant as six get and programs of not time counts Equinor other that Yes. at or you’re more. to there’s Total, Because got to from that of the increase By are Shell, capacity, adding we to the the range going well. be XX likes others XXXX only Petrobras satisfied even but

of So, next dip down to terms kind it’s the to we little count but going while. the of Brazil, teens in in over rig double

XX So, you’re rigs. XX, plus looking I at think

David Smith

much. so Thanks

Operator

you. Thank

from Samantha Evercore Hoh with Our will final ISI. question come

Samantha Hoh

Gulf stay thanks fleet operating Hi. going really be maybe to I a think looks It I five a wanted you’re like if wondering congrats region, maybe and about in quarter. in really Mexico was to so questions that taking country, lot you and there provide have Brazil. on a there, five, that could does commentary of sort that of for just Thanks just some my around, market? a U.S., of the profitability Brazil. the vessels little of and in many concentrated productive bit topic on drillships of what I one around when have concentration for rigs and you your

Jeremy Thigpen

Yes, of okay. Around that in market. the rigs concentration

and tender. basically minimum as you Brazil about or a work there’s in of in go you either is the form So a what’s it out And you interesting qualify the specification comes to of most don’t. the tender,

our is required assets. a for [indiscernible] And up world opens Brazil. it So for thing good view of from realistically is, the point what’s the possibilities set our specification that in of about

to successful. So highest to be we have Brazil necessarily potentially the earners seventh able be to to deploy generation, the don’t which are

So that’s interest us. why of been it’s significant for

or had for booking and taking be would optimistic of there, able or we’d familiar high We’re contracted in our lower two contracts basically And looking five one, so. them now multi-year spec to to we’re that the region on presence I next very rigs with. we’re a that day over years. very XX a over rigs more that be add And rate three being year at we’ve course

little It incremental bit one your a way certainly tremendous a was there. that, energy add have you But question effort there you much larger add and a were to don’t a larger rigs, there add up in scale question safely, a with and I And requires ultra-deepwater run base support are a to working amount so this reliably, just – economies end, little asking of muffled on onshore. of the Samantha, and And as installed experience scale. apologize, of with but you around economies fleet to efficiently. time of to and think then

rigs So can there’s the definitely some we add certain more economy of be had to a jurisdiction. to scale

Samantha Hoh

like of that, looks that in taking I I guess market? versus project just so are profile its that Namibia? thoughts similar high has which Brazil your out that, wanting press terms much potential a and term? Namibia, longer And And What I exploration mean, type development mean gotten I vein, lately. rig of and of longer Excellent. Is is development work, in duration in just excitement guess terms like that work in the a exploration like versus type visibility that of of view what the

Jeremy Thigpen

take I’ll one. Yes, that

kind look, Namibia, they’ve on you’ve of several dipped in their stuff So success. and the had are good operators, that who toe got now exploration

development So a in the into down they further exploration, the with success move phase little bit track.

got two basically working kind you of you’ve in rigs So, Namibia.

for in additional there’s demand is more, in out the Now mid. an Gulf for Energies fact tender

be to the foreseeable jurisdiction future. So, a I going that’s solid really think for

rigs. see you’re multiple to think going I

into I think over few development exploration the next appraisal the you’re years. of and kind going phase switch from then to

saw a you in see there to Guyana what ExxonMobil. to story similar expect would I with So, very

because years. last year positive use lot that again, harsh just really than the you’ve discoveries here you so benign is have particularly more think rigs environment than aren’t the auditors in they in seen But a So around more you I just I that’s had rigs. some interested, a previous the sign, difference rather world, think even

this delivering works rather of more these terms to see of You shift more lot going towards because will in all see development as fields wells timeframe. that’s that long-term contracts those you’re how than in cycle given we typically a of just exploration,

Samantha Hoh

that you. could that potential use just guys year same see initially, the or the really for sort that you’re into type bit your type used return to phrase mentioned wondering, toes, toes. of it’s opportunity if economics interesting Olympia in interest was Aquila, essentially Aquila? out you that are can that terms have you the nice like one was in there a like we with but year swapping contract what that you guys looking be one-third should that the the north? of about mean, be type that I about new profile? like on the around similar Anything Because and the we thinking thinking is one your in dipping Jeremy guys in, last used that, when I you that obviously of dipping phrase that kind year earlier first Okay, squeeze thank think deep-sea mining, I it exciting a And you your this JV more just venture. I has little of shifted announced modeling, for a

Jeremy Thigpen

Samantha, pulled but really Hey, profile this return return in, think, on sorry, you I deep-sea about on the mining the opportunities.

Samantha Hoh

Yes.

Jeremy Thigpen

the – the Aquila? on on or it was Oh

Samantha Hoh

In Aquila.

Jeremy Thigpen

now and been really defer Oh, the, we investor could that to call difficult has it, it with afterwards just you. that the understand to a teams because,

Sorry.

Samantha Hoh

guys thanks that. about time. Sorry your for all But

Jeremy Thigpen

Samantha. right. Thanks, All

Operator

our Q&A you. additional I’ll back or closing conclude Session. turn it That management for to does remarks. any Thank

Alison Johnson

everyone when you We XXXX talking quarter call. participation with for today’s results. day. again you to And look forward first good our report your a Todd. we on you, Thank thank Have

Operator

call. This today’s you Thank participation. your for concludes

may any You at disconnect time.

Transocean (RIG) 22 Feb 232022 Q4 Earnings call transcript