Transocean reported on their Q4 results and full year of 2021, below are the highlights
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Total contract drilling revenues were $621 million, compared to $626 million in the third quarter of 2021 (total adjusted contract drilling revenues of $671 million, compared to $683 million in the third quarter of 2021);
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Revenue efficiency(1) was 94.5%, compared to 98.1% in the prior quarter;
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Operating and maintenance expense was $430 million, compared to $398 million in the prior quarter;
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Net loss attributable to controlling interest was $260 million, $0.40 per diluted share, compared to $130 million, $0.20 per diluted share, in the third quarter of 2021;
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Adjusted EBITDA was $250 million, compared to $245 million in the prior quarter; and
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Contract backlog was $6.5 billion as of the February 2022 Fleet Status Report.
A net loss attributable to controlling interest of $260 million, $0.40 per diluted share, for the three months ended December 31, 2021.
Fourth quarter 2021 results included net unfavorable non-cash items of $134 million, or $0.21 per diluted share, as follows:
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$72 million, $0.11 per diluted share, related to discrete tax items;
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$37 million, $0.06 per diluted share, loss on impairment of investment in unconsolidated affiliate; and
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$28 million, $0.04 per diluted share, allowance for excess materials and supplies, certain items.
These unfavorable non-cash items were partially offset by:
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$3 million, gain on disposal of assets.
After consideration of this net unfavorable item, fourth quarter 2021 adjusted net loss was $126 million, $0.19 per diluted share, compared to $122 million, $0.19 per diluted share, in the third quarter of 2021.
Contract drilling revenues for the three months ended December 31, 2021 decreased sequentially by $5 million to $621 million, primarily due to lower revenue efficiency and a rig that was idle in the fourth quarter, partially offset by one rig that returned to work following a planned shipyard stay and one rig that returned to work after being idle in the prior quarter.
A non-cash revenue reduction of $50 million was recognized in the fourth quarter as a result of contract intangible amortization associated with the Songa and Ocean Rig acquisitions in 2018. The reduction, compared to $57 million in the prior period, is the result of the completion of the contract acquired in the Ocean Rig acquisition.
Operating and maintenance expense was $430 million, compared with $398 million in the prior quarter. The sequential increase was primarily the result of a $28 million increase in our allowance for excess materials and supplies, increased personnel costs and higher in-service maintenance costs across our fleet, partially offset by a settlement with insurance carriers, reduced activity and lower shipyard costs.
General and administrative expense was $49 million, up from $40 million in the third quarter of 2021. The increase was primarily due to research and development costs incurred in the fourth quarter 2021 with no comparable activity in prior quarter and increased legal and professional fees.
Interest expense, net of amounts capitalized, was $107 million, compared with $110 million in the prior quarter. Interest income was $4 million, which is in line with the third quarter of 2021.
The Effective Tax Rate(2) was (74.0)%, down from (26.1)% in the prior quarter. The decrease was primarily due to the discrete tax impact of the transition to ordinary taxation in Switzerland. The Effective Tax Rate excluding discrete items was (44.9)% compared to (18.1)% in previous quarter.
Cash flows provided by operating activities were $185 million, compared to $141 million in the prior quarter. The fourth quarter increase was primarily due to the timing of interest payments and decreased income tax payments, partially offset by increased payroll-related payments.
Fourth quarter 2021 capital expenditures of $71 million, compared to $37 million in the prior quarter, were primarily related to the company’s newbuild drillships under construction.
“Our steadfast focus on safety, reliability and efficiency enabled us to once again deliver strong operational results for our customers in 2021, which ultimately translated into industry leading financial results,” said Chief Executive Officer, Jeremy Thigpen. “Despite the continuing challenges that COVID-19 presented to us all, for the full year, we delivered exceptional uptime performance resulting in revenue efficiency of 97.0% and Adjusted EBITDA of $995 million. I recognize and thank the entire Transocean team for its dedication and commitment throughout 2021.”
Thigpen added: “As we move into 2022, we are more optimistic than we have been in the past seven years. Energy demand remains resilient driving oil prices to seven-year highs. As a result, we are experiencing a growing list of opportunities from customers across the globe who value our high-specification floating fleet and our strong and consistent operating performance. With customer demand growing, and utilization for active high-specification assets pushing higher, we expect the upward trend in dayrates to continue as we progress through the year.”
Full Year 2021
For the year ended December 31, 2021, net loss attributable to controlling interest totaled $592 million, or $0.93 per diluted share. Full year results included $118 million, or $0.19 per diluted share, net unfavorable non-cash items listed as follows:
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$57 million, $0.09 per diluted share, loss on disposal of assets;
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$47 million, $0.08 per diluted share, related to discrete tax items;
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$37 million, $0.06 per diluted share, loss on impairment of investments in unconsolidated affiliate; and
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$28 million, $0.04 per diluted share, allowance for excess materials and supplies, certain items.
These unfavorable non-cash items were partially offset by:
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$51 million, $0.08 per diluted share, gain on retirement of debt.
After consideration of these net unfavorable items, adjusted net loss for 2021 was $474 million, $0.74 per diluted share.
Source: Transocean
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