Offshore drilling contractor Transocean narrowed its quarterly loss despite lower revenues and is encouraged by the current upcycle in the offshore drilling market, expecting rig utilization and day rates to improve heading into next year.
Transocean reported similar sentiment in its 1Q 2021 financial report, when the rig owner expressed optimism that oil prices would remain constructive and drive increased contracting for the remainder of the year.
In its 2Q 2021 report on Monday, Transocean said its total contract drilling revenue was $656 million compared with $653 million in 1Q 2021 and compared with $930 million in 2Q 2020.
Contract drilling revenue for 2Q 2021 increased sequentially by $3 million to $656 million, primarily due to three rigs returning to work after a stay in the yard, partially offset by two rigs that were idle in the second quarter.
Net loss attributable to controlling interest was $103 million, compared with a net loss attributable to controlling interest of $99 million in the first quarter of 2021 and compared with a net loss of $497 million in the second quarter of 2020.
According to Transocean, its second quarter 2021 results included a favorable net item of $6 million related to discrete tax items. After considering this favorable net item, the adjusted net loss for the second quarter of 2021 was $109 million, compared with an adjusted net loss of $117 million for the first quarter of 2021.
The contract backlog was $7.3 billion as of the July 2021 State of the Fleet Report, when Transocean reported contracts for five of its drillships and four semisubmersible rigs.
Transocean President and CEO Jeremy Thigpen said, “During the quarter, we took significant steps to improve our liquidity by agreeing to delay delivery and payment for our two newbuild drillships, the Deepwater Atlas and Deepwater Titan, ultimately deferring more than $450 million of near-term capex.”
Thigpen concluded, “As we enter the second half of this year, we remain encouraged by the upward cycle currently underway. Assuming oil prices remain favorable, we see utilization and dayrates on our ultra-deepwater assets improving substantially as we move into 2022″.