Transocean Ltd. RIG has strengthened its offshore drilling backlog with approximately $1.1 billion in additions following a new contract award from Shell plc’s SHEL Norwegian subsidiary A/S Norske Shell and final approval of a previously announced agreement with Equinor ASA EQNR. The developments reinforce the company's contracted drilling activity offshore Norway and improve the visibility of future work for its harsh environment and offshore drilling fleet.
Shell Contract Adds $62M to Firm Backlog
Transocean's semisubmersible drilling rig Transocean Norge has secured a two-well contract with A/S Norske Shell. The program is expected to involve approximately 120 days of work and contribute around $62 million to the company's firm contract backlog, excluding additional services.
The contract is scheduled to begin immediately after the rig completes its previously awarded drilling programs in Norway. This continuation of work supports the rig's operational utilization and helps maintain its contracted activity in the region. The agreement also includes an option for one additional well, providing potential for further work beyond the initial program.
Equinor Agreement Converts $1B Into Firm Backlog
In a separate development, Transocean, currently flaunting a Zacks Rank #1 (Strong Buy), received final approval from Equinor in late September for a previously announced agreement covering three harsh-environment semisubmersible drilling rigs operating offshore Norway. The approval converts approximately $1 billion in contract value into firm backlog.
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The agreement covers the Transocean Enabler, Transocean Encourage and Transocean Endurance. With the necessary approval secured, the contract value is now included in Transocean's firm backlog, strengthening its contracted business and providing greater visibility into future drilling activity.
Norwegian Offshore Operations Strengthen Backlog Visibility
The Shell contract and Equinor agreement represent approximately $1.1 billion in additions to Transocean's firm contract backlog. The developments reinforce the company's position in the Norwegian Continental Shelf, where demand for specialized offshore drilling capabilities supports its focus on technically challenging operations.
Transocean specializes in ultra-deepwater and harsh-environment drilling services and operates a fleet of 27 mobile offshore drilling units, comprising 20 ultra-deepwater floaters and seven harsh-environment floaters. The latest contract developments strengthen the company's contracted work profile and underline the importance of its specialized drilling fleet in serving offshore energy operators.
Overall, the two agreements expand Transocean's firm backlog and enhance visibility into future contracted activity. The Shell award adds a new drilling program, while the Equinor approval formalizes a substantial previously announced contract, together bolstering the company's offshore drilling business in Norway.
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This article originally published on Zacks Investment Research (zacks.com).