The last time we took a look at the level of rates charged by deepwater contract drillers, Transocean
These rates are well off Transocean's
This week, Transocean landed a contract for the last of its ultra-deepwater (i.e., 7,500 feet or more of water depth) rigs with availability in 2010. The Deepwater Horizon has made waves lately, drilling a well to record depth in the discovery of BP's giant gusher in the deepwater Gulf of Mexico. Clearly satisfied with the rig's performance, BP has signed a three-year contract extension at $544 million, or around $497,000 a day.
That's about a 6% slip from the rate Transocean got with Noble, but it's important to note that that award only covered 15 months of activity. BP got a slightly lower rate by offering some significant terms on this deal. Transocean shareholders should be quite pleased with this arrangement.
For anyone long the drillers, be it Noble
Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.