I'd like to take this opportunity to welcome Esa Ikäheimonen, who will assume the CFO responsibilities on November 15. Esa's extensive experience and industry knowledge make him a great fit for this key role at Transocean. Although it's a bit premature as he will be here until the end of the year to help with Esa's transition, I'd like to thank Greg for his dedication and extraordinary efforts.
As you can see from our many filings and press releases this week, we have made significant progress executing on our asset strategy. First of all, we are pleased to announce that we reached the definitive agreement to sell 38 shallow water drilling rigs to Shelf Drilling International for $1.05 billion. This marks a major milestone in our asset strategy and a significant step to increase our focus on High-Specification Floaters and Jackups, improving our long-term competitiveness by reducing the diversity of our fleet. We have made measurable progress on this important goal, and this is extremely encouraging.
Let me give you a few key highlights of the transaction. The $1.05 billion sales price comprises $855 million in cash and $195 million in seller financing. The seller financing will be in the form of preference shares issued by the parent company of Shelf Drilling to Transocean. And we expect the transaction to close in the fourth quarter of this year.
As part of this transaction and to provide as seamless a transition as possible for our customers and for our employees joining the new company, we've agreed to provide various support services to Shelf Drilling for a period of time following closing.We also announced our discussions with a major oil company for the potential construction of 4 ultra-deepwater newbuild drillships, which we would expect to be backed by 10-year drilling contracts. We currently have a nonbinding letter of intent that outlines most of the commercial terms associated with this project, including an estimated capital investment of $3 billion or about $750 million per rig. Contract backlog associated with this newbuild opportunity is expected to be approximately $7.6 billion, representing 40 rig years of work. The implied day rate for each rig is $520,000.Read the rest of this transcript for free on seekingalpha.com
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV