What happened

Shares of Transocean (NYSE:RIG) skyrocketed 38.2% in December, according to data from S&P Global Market Intelligence, as a confluence of events fueled a broader rally in energy-related stocks.

Oil stocks surged as a group starting early last month as U.S. Energy Information Administration data indicated falling oil-storage levels and, in turn, strong demand for what had previously been endured as an oversupplied oil market. 

Oil, gas, and propane prices on an LED screen.

Image source: Getty Images.

So what

For perspective, the SPDR S&P Oil & Gas Exploration and Production ETF (NYSEMKT:XOP) simultaneously gained just over 16% last month. But as the world's largest offshore drilling contractor, Transocean is uniquely positioned to enjoy the outsize benefits of higher oil prices -- and its stock responded in kind last month. 

Now what

On Wednesday, Transocean also announced $352.9 million in new rig contracts and options exercised by its customers, clearly indicating the continued improvement in the offshore drilling market.

"Customer demand for the highest specification ultra-deepwater floaters now equals or exceeds the number of marketable rigs currently available in many areas," CEO Jeremy Thigpen said. "As a result, new contracts more consistently reflect materially increased dayrates, which will generate significantly improved cash flow."

Investors will receive fresh color on the extent to which those developments are reflected in Transocean's top and bottom lines when the company releases fourth-quarter 2019 results in mid-February. But given the catalysts that materialized last month, it was hardly surprising to see shares rally in response.