TRANSOCEAN LIMITS LOSSES AND STAYS THE COURSE IN CHALLENGING ENVIRONMENT
Swiss offshore drilling contractor Transocean reported net loss attributable to controlling interest of $392 million for the three months ended March 31, 2020.
First quarter 2020 results included net unfavorable items of $205 million as follows:
• $167 million, $0.28 per diluted share, loss on impairment of assets; and
• $57 million, $0.09 per diluted share, loss on retirement of debt.
These unfavorable items were partially offset by $19 million related to discrete tax items.
After consideration of these net unfavorable items, first quarter 2020 adjusted net loss was $187 million. Contract drilling revenues for the three months ended March 31, 2020, decreased sequentially by $33 million, primarily due to reduced activity related to rigs that were idle and lower revenue efficiency. These decreases were partially offset by a full quarter of revenues from the recently reactivated ultra deepwater floaters Deepwater Mykonos and Deepwater Corcovado. First quarter 2020 results reflected a non-cash revenue reduction of $48 million, compared to $47 million in the prior quarter, from contract intangible amortization associated with the Songa and Ocean Rig acquisitions.
First quarter 2020 capital expenditures of $107 million decreased primarily due to reduced expenditures for the reactivation of two rigs and leasehold improvements, partially offset by increased expenditures for the company’s newbuild rigs under construction. This compares with $128 million in the previous quarter.
“With the challenges we confronted related to COVID-19, I am very proud of the strong quarterly financial results we delivered,” said Jeremy Thigpen, President and Chief Executive Officer. “Through outstanding effort across our entire organization, we delivered revenue in line with our guidance, and at lower than projected costs; even with the additional hurdles we overcame crewing and equipping our rigs to meet their contractual requirements for our customers. Looking forward, we recognize the dramatic decline in oil prices, coupled with the continued uncertainties surrounding the containment of COVID-19, and the resumption of the global economy, will invariably delay the contracting activity that we expected in 2020. However, with our industry-leading backlog and proven track record for managing costs, we expect to continue to deliver industry-best margins. With continued strong operating performance, and the prudent management of our liquidity, Transocean is well-positioned to continue delivering the highest level of service while keeping our employees and our customers safe.”
Transocean owns or has partial ownership interests in, and operates a fleet of 41 mobile offshore drilling units consisting of 28 ultra-deepwater floaters, 12 harsh environment floaters, and one midwater floater. In addition, Transocean is constructing two ultra-deepwater drillships.
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