Transocean reported on their financial results for Q2 and here are the highlights:
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Total contract drilling revenues were $656 million (total adjusted contract drilling revenues of $713 million), compared with $653 million in the first quarter of 2021 (total adjusted contract drilling revenues of $709 million);
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Revenue efficiency was 98.0%, compared with 97.4% in the prior quarter;
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Operating and maintenance expense was $434 million, compared with $435 million in the prior period;
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Net loss attributable to controlling interest was $103 million, $0.17 per diluted share, compared with net loss attributable to controlling interest of $99 million, $0.16 per diluted share, in the first quarter of 2021;
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Adjusted EBITDA was $255 million, compared with adjusted EBITDA of $245 million in the prior quarter; and
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Contract backlog was $7.3 billion as of the July 2021 Fleet Status Report.
Transocean Ltd. reported a net loss attributable to controlling interest of $103 million, $0.17 per diluted share, for the three months ended June 30, 2021.
Second quarter 2021 results included net favorable item of $6 million, or $0.1 per diluted share, related to discrete tax items. After consideration of this net favorable item, second quarter 2021 adjusted net loss was $109 million, $0.18 per diluted share, compared to $117 million adjusted net loss, $0.19 per diluted share, in the first quarter of 2021.
Contract drilling revenues for the three months ended June 30, 2021 increased sequentially by $3 million to $656 million, primarily due to three rigs that returned to work following a shipyard stay, partially offset by two rigs that went idle in the second quarter.
A non-cash revenue reduction of $57 million was recognized in the second quarter as a result of contract intangible amortization associated with the Songa and Ocean Rig acquisitions. This compares with $56 million in the prior quarter.
Operating and maintenance expense was $434 million, compared with $435 million in the prior quarter.
General and administrative expense was $39 million, in line with the first quarter of 2021.
Interest expense, net of amounts capitalized, was $115 million, in line with the first quarter of 2021. Interest income was $4 million, compared with $3 million in the previous quarter.
The Effective Tax Rate(2) was (4.6)%, down from 17.8% in the prior quarter. The decrease was primarily due to higher earnings in jurisdictions with lower tax rates, releases of uncertain tax positions related to settlements and other various discrete items. The Effective Tax Rate excluding discrete items was (10.2)% compared to (5.7)% in previous quarter.
Cash flows provided by operating activities were $153 million, compared to $96 million in the prior quarter. This was primarily due to the timing of interest payments and reduced personnel-related payments.
Second quarter 2021 capital expenditures of $41 million were primarily related to our newbuild drillships under construction. This compares with $59 million in the previous quarter.
“Operationally, we delivered another solid quarter, with an Adjusted EBITDA Margin of 36% on Adjusted Revenue of $713 million,” said President and Chief Executive Officer, Jeremy Thigpen. “These better than anticipated results were driven largely by our continued focus on operational excellence, as evidenced by our strong uptime performance, which resulted in revenue efficiency of 98 percent.”
“During the quarter, we took meaningful steps to improve our liquidity by agreeing to delay delivery and payment of our two newbuild drillships, the Deepwater Atlas and the Deepwater Titan, ultimately deferring over $450 million of near-term capex. Additionally, we further improved our liquidity through the initiation of our ATM program that provides us with additional optionality. We will remain pragmatic yet disciplined in using this tool now and in the future.”
Thigpen concluded: “As we enter the back half of this year, we remain encouraged by the upcycle that is currently unfolding. Assuming oil prices remain supportive, we see utilization and dayrates for our ultra-deepwater assets materially improving as we move into 2022."
Source: Transocean
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