Yahoo Finance Transocean (RIG) Secures Major Contract Extensions Worth $161M
Transocean Ltd. RIG has secured new contract extensions for three of its harsh environment semisubmersible rigs — Transocean Spitsbergen, Transocean Norge and Transocean Endurance. The new deals contribute approximately $161 million in firm contract backlog.
The Transocean Spitsbergen received a three-well contract extension in Norway from Equinor. The rig has been contracted by Equinor since November 2023. The extension with Equinor should contribute around $72 million in firm backlog, excluding additional services and including options to embrace six additional wells. The extension is slated to begin in the fourth quarter of 2025 in continuation with the rig’s current contract.
The Transocean Norge has been awarded a contract extension with Wintershall Dea for three wells. The extension is expected to contribute approximately $71 million in contract backlog, excluding additional services. The program, estimated to last for 140 days, is scheduled to start in the first quarter of 2028 in direct continuation with the current program.
The third semisubmersible Transocean Endurance was contracted by Woodside Energy by exercising its second option for the rig. The contract extension includes an estimated 45-day well, which should contribute approximately $18 million to Transocean’s contract backlog. The program is scheduled to commence in continuation with the rig’s current program.
Transocean believes that the high-specification harsh environment market’s outlook remains positive. The company’s confidence in the market is underscored by the advance contracting of rigs for up to four years by its customers.
Zacks Rank and Key Picks
Currently, RIG carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Archrock Inc. AROC, Hess Midstream Partners LP HESM and Sunoco LP SUN.Archrock presently sports a Zacks Rank #1 (Strong Buy), while Hess Midstream and Sunoco carry a Zacks Rank of #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Hess Midstream owns, operates, develops and acquires a wide range of midstream assets, providing services to Hess Corporation and other third-party customers. The partnership has a stable fee-based revenue model secured via long-term commercial contracts. Since Hess Midstream operates through 100% fee-based contracts, it is exposed to minimal commodity price risks.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores as well as distributors. Its current distribution yield is greater than that of the composite stocks in the industry, providing unitholders with consistent returns.
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