After listening to last quarter's conference call, I noted Transocean's (NYSE:RIG) increasing comfort with its revenue visibility out to 2010. Investors seemed too pessimistic about the company's outlook at the time, given its firm order backlog.

Seven weeks later, Transocean has signed a major new contract, surely boosting the confidence of management and investors alike. Shares have been bid up roughly 20% since I wrote the initial piece, and the discount I perceived has narrowed. Perhaps we'll find clues to the resurgence in investors' sentiment by reading the latest contract.

BP (NYSE:BP) has a major presence off the coast of Angola, thanks to its merger with Amoco in 1998. Apparently, the company still sees plenty of upside there, and it's ordered a newly built drillship for the region from a Transocean subsidiary.

Unlike drilling platforms, which are moored to the ocean floor, a drillship uses its thrusters to achieve "dynamic positioning," staying in a fixed position atop moving waves. This vessel will have a drill depth of 40,000 feet, matching the capability of other recent builds ordered by Chevron (NYSE:CVX) and Norsk Hydro (NYSE:NHY) for their work in the deepwater Gulf of Mexico. (40,000 feet is totally the new 30,000 feet.)

Let's quickly compare the terms of these deals to see how Transocean is making out. Last year, it signed a roughly $822 million five-year contract with Chevron, and a $694 million four-year contract with Norsk Hydro. The new contract, if taken at the five-year option, secures a higher dayrate than either of last year's deals. It will also pay back the nominal cost of the rig after 3.5 years, the fastest repayment rate relative to contract duration of any of the three deals.

The contract also provides BP an option to extend the deal out to seven years. That seven-year option would include somewhat lower dayrates, but at these prices, you won't find Transocean shareholders complaining.

Drill deep for further Foolishness:

Fool contributor Toby Shute is deeply interested in deepwater. He doesn't own shares in any company mentioned. Norsk Hydro is an Income Investor pick. The Motley Fool has a dynamic disclosure policy.