Transocean Is Coastin'

It's good to be the drill king.

Transocean (NYSE: RIG) just reported its first full post-GlobalSantaFe quarter, and the numbers are, as one would expect, quite regal. Contract drilling revenue came in at $2.64 billion, while some additional sources kicked the full top line to over $3.1 billion. Field operating income, which is Transocean's own way of talking about operating results before non-cash items clutter the picture, hit $1.95 billion. That's a nearly 70% sequential rise.

The fourth quarter only included about a month's contribution from GSF, so the comparison isn't terribly useful. The margin picture, however, brightened meaningfully. Field operating income margins lifted from the upper 50% range into the lower 60s. Note that this includes all revenue sources, some of which are lower-margin than drilling, so the figure is understated compared to the contract drilling margins I tend to talk about when I praise Noble's (NYSE: NE) dynasty or ENSCO International's (NYSE: ESV) excellence.

I've talked about the tax rates of some of these drillers, which vary widely due to geographic factors. Diamond Offshore (NYSE: DO) reports about the highest rate that I've seen, while the two aforementioned aces fall in the high teens. Transocean did them one better, with an effective tax rate of 15.5% -- and that included some unfavorable items. This light tax treatment helped Transocean turn out a solid 38% net income margin.

Transocean's been scoring some big contract wins in India, an exciting basin that has been overshadowed by the exploration exhilaration in places like Angola and particularly Brazil. Reliance Industries, a bit like a Petrobras (NYSE: PBR) of India (granted, Reliance has more competition vis a vis ONGC), is exploring aggressively in what's known as the KG basin, offshore India. Yesterday's announcement of a new drillship order takes Reliance's deepwater vessel commitments with Transocean up to six, with three active rigs and both vessels from Transocean's joint venture with Pacific Drilling under construction. If Reliance hits anything like Petrobras' Tupi, Jupiter, or Carioca finds, then expect the fireworks to really fly.

Related Foolishness:

• Diamond Offshore has faded a bit.
• Find out why everyone was ogling Transocean last November.
• I'm done whining about this driller's formidable fleet.