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