uploads///Backlog to Revenue

Transocean’s New Contracts with ConocoPhillips and Chevron

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Jul. 31 2018, Updated 1:09 p.m. ET

New contracts

In the previous part of this series, we looked at Rowan Companies’ (RDC) latest fleet report published last week. In this part of the series, we’ll look at Tranoscean’s (RIG) latest contracts.

Last week, Transocean announced two contracts. Its ultra-deepwater semi-submersible GSF Development Driller I secured an 11-well contract with Chevron (CVX) in Australia. The contract will begin in the first half of 2019 and last 955 days. IT will add $158 million to Transocean’s backlog. It also has four one-well options.

Transocean’s mid-water semisubmersible Transocean 712 secured a 13-well contract with ConocoPhillips (COP) in the United Kingdom’s North Sea. The contract will begin in March 2019 and last 580 days. It will add ~$75 million to the company’s backlog. The contract also includes a one-well option.

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Backlog

Tranoscean’s backlog at the end of the first quarter was $12.5 billion. Transocean has one of the highest backlogs among its peers. Its backlog-to-TTM (trailing-12-month) revenue ratio is 322%. Transocean’s contracts stretch beyond 2025.

At the end of the first quarter, Noble Corporation’s (NE) backlog-to-TTM revenue was 287%. Ensco (ESV) has one of the lowest backlog-to-TTM revenue ratios of 168%. Diamond Offshore Drilling (DO) has a backlog-to-TTM revenue ratio of 186%.

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