Transocean says net doubles to $252.6 million, notes rig market weakness

Transocean Sedco Forex Inc., a large offshore drilling company based in Houston, declared net income for the fourth quarter of 2001 of $56 million on revenue of $747.6 million. For the year, Transocean declared net income of $252.6 million on revenue of $2.8 billion.

Feb. 6, 2002

3 min read

By the OGJ Online Staff

HOUSTON, Feb. 6 -- Transocean Sedco Forex Inc., a large offshore drilling company based in Houston, declared net income for the fourth quarter of 2001 of $56 million on revenue of $747.6 million. For the year, Transocean declared net income of $252.6 million on revenue of $2.8 billion.

During the same quarter in 2000, Transocean announced a net loss of $9.2 million on revenue of $314.9 million. For the full year 2000, Transocean declared net income of $108.5 million on revenue of $1.2 billion.

Transocean's merger with R&B Falcon Corp. closed on Jan. 31, 2001, so results for the year only include 11 months of operating results for R&B Falcon.

However, the results include pro forma combined rig fleet utilization rates for 2001 and 2000.

J. Michael Talbert, CEO of Transocean Sedco Forex, said, "During the fourth quarter of 2001, our international and US floater contract drilling services business segment experienced higher average utilization and day rates when compared to the third quarter of 2001. However, segment profitability declined as operating and maintenance expenses increased compared with the third quarter."

He also said that the US shallow and inland water business continued to decline as lower average gas prices and reduced customer spending levels sent utilization and average jack up day rates to the lowest level of the year.

The shallow and inland waters jack up and semisubmersible utilization rate dipped to 27% in the fourth quarter, down from 52% in the third quarter and 70% in the fourth quarter 2000.

Talbert said, "As we enter 2002, some regions requiring semisubmersibles and drillships, or floaters, are displaying signs of weakening demand as operators reassess exploration and production spending plans against the risk of increased volatility in crude oil prices."

The company plans to move premium drillship Discoverer 534 from the Gulf of Mexico to India, partially in response to softening day rates in the gulf. It will move the semisubmersible Sovereign Explorer from the North Sea to Equatorial Guinea for a 1-year contract.

Transocean noted that once the semisub Transocean Arctic completes its contract off Norway, no additional work is foreseen for 3-6 months.

"In contrast to the floater market, the international jack up market remains stable, particularly in the West Africa, Middle East and Southeast Asia regions," said the company. "Prospects for an immediate recovery within our US-based jack up rig fleet are currently limited," it added, citing high natural gas storage levels. Transocean cut its US jack up fleet to 17 from 25 in mid-2001 in an effort to limit costs.