Despite a quarter that saw a good deal of shipyard maintenance and upgrade activity, Transocean
Even with a sequential pullback in fleet utilization from 91% to 87%, the offshore contract driller cranked out roughly flat operating revenue. Transocean has rising dayrates to thank for that cushion. Every category, save for the lowest of the low-quality rigs, saw sequential strengthening in its average daily take. Before we check out some other fleet tweaks, let's review a few contract highlights.
Italian explorer Eni
Other notable contracts were a Petrobras
In addition to improvements to existing rigs, largely in preparation for new assignments, Transocean also sold some vessels in the quarter. The GSF Arctic II and IV will bring in $750 million in time, but seller financing delays those payments. The other divestiture will immediately bring in cash and go toward paying down Transocean's quickly shrinking debt.
That brings us to the fine dilemma of how to return excess cash to shareholders. This firm is rapidly approaching its comfort level in terms of debt as a proportion of backlog free cash flow, which now stands at $18 billion. No decision has been made yet, but I'd expect news on either a special dividend or, if the share price sags, a share repurchase program sometime in the back half of the year.