Transocean Endurance

Impairments take Transocean deeper into the red

Offshore drilling contractor Transocean recorded a wider loss in the first quarter of 2020 when compared to the same period last year due to asset impairments.

Transocean Endurance by SP Mac

Net loss attributable to controlling interest was $392 million compared with a net loss of $51 million in the fourth quarter of 2019 and a net loss of $171 million in 1Q 2019.

First-quarter 2020 results included net unfavourable items of $205 million. This included $167 million loss on impairment of assets and $57 million loss on retirement of debt.

After consideration of these net unfavourable items, first quarter 2020 adjusted net loss was $187 million. This compares with an adjusted net loss of $263 million in the previous quarter.

Total contract drilling revenues were $759 million compared with $792 million in the fourth quarter of 2019 and $754 million in 1Q 2019.

Contract drilling revenues for 1Q 2020 decreased sequentially by $33 million, primarily due to reduced activity related to rigs that were idle and lower revenue efficiency.

These decreases were partially offset by a full quarter of revenues from the recently reactivated ultra‑deepwater floaters Deepwater Mykonos and Deepwater Corcovado.

Jeremy Thigpen, Transocean President and Chief Executive Officer, said: “Looking forward, we recognize the dramatic decline in oil prices, coupled with the continued uncertainties surrounding the containment of COVID-19, and the resumption of the global economy, will invariably delay the contracting activity that we expected in 2020”.

Transocean’s current contract backlog is $9.6 billion.

Photo by SP Mac