Rich Duprey
4 min read
Quick Read
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RIG shares surged 21% ahead of Nov. 2 earnings, fueled by $1.6B in fresh October backlog and the nearly closed $5.8B all-stock VAL merger.
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SHEL and EQNR anchored RIG’s October contract wins, with a separate $1.0B conditional Equinor award covering three harsh environment semisubmersibles already on the books.
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With a put/call ratio of 0.07, options traders lean bullish, raising the bar for RIG to prove new backlog is driving faster debt reduction.
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Transocean (NYSE:RIG) reports third-quarter results on Monday, Nov. 2. Shares have climbed 21.38% over the past month to $6.53. Now the earnings report has to back up a rally driven by fresh backlog and a nearly finished Valaris (NYSE:VAL) deal.
Backlog Keeps Building Through a Softer Quarter
Last quarter, Transocean posted adjusted EPS of $0.03 against a $0.0132 consensus, and revenue of $966 million came in slightly above estimates. Free cash flow reached $212 million, and net debt fell to $4,312 million. Fleet utilization slipped to 78.2% from 86.7%, with ultra-deepwater at 72.6%.
The contract book has grown since then. Transocean added roughly $1.6 billion in firm backlog during October from deals in the U.S. Gulf and Norway, including work for Shell (NYSE:SHEL) and Equinor (NYSE:EQNR). That follows Q2 fixtures at a weighted average dayrate near $461,000 and a $1.0 billion conditional Equinor award covering three harsh environment semisubmersibles.
Management guided Q3 contract drilling revenue to $920 million to $960 million at 96.5% revenue efficiency.
Consensus Points to a Year-Over-Year Dip
Nine analysts cover EPS. Over the past 30 days, estimates saw two upward revisions and no cuts.
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