Transocean (NYSE:RIG) announced yesterday that it has inked a five-year contract deal with Chevron (NYSE:CVX) valued at $1.1 billion. Transocean will be supplying the energy company with a state-of-the-art newbuild ultra-deepwater drillship, the latest addition to the company's fleet of 79 rigs.

Equipment this size takes time to build, and shipyard delivery isn't expected until Q1 2016, with the contract commencing in Q4 2016. Transocean expects capital investment to clock in at around $725 million, excluding capitalized interest.

"We are delighted to continue our partnership with Chevron in pioneering ultra-deepwater drillships that in the past have set world records and achieved strong utilization with time-saving efficiencies," said Steven L. Newman, president and chief executive officer of Transocean Ltd., in a statement. "Further, the addition of this latest newbuild drillship demonstrates the execution of our asset strategy and commitment to increasing our exposure to high-specification floaters with industry-leading capabilities."

Construction on this latest project will start in Q4 2013 in Okpo, South Korea, where Transocean has already churned out five Enhanced Enterprise-Class rigs and where six other ultra-deepwater rigs are currently being built.

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