The September 13 bond and warrant deals closed on Sept 30, 2022. Transocean Inc. issued $300m of 4.625% exchangeable bonds due 2029, exchangeable at about $3.44 per share, plus 22,175,910 warrants exercisable at $3.71 per share until March 13, 2026. These were issued in exchange for $72,976,000 of 0.5% 2023 exchangeable bonds, $43,254,000 of 7.25% 2025 notes and $188,095,000 in cash. Shares could be issued if the bonds are exchanged or the warrants exercised, which would dilute existing holders.
Transocean announced private deals with holders of its 0.50% exchangeable bonds due 2023 and its 7.25% notes due 2025. It will swap about $73.0m of the 2023 bonds and about $43.3m of the 2025 notes for new 4.625% exchangeable bonds due 2029 (about $73.0m and $38.9m), and sell about $188.1m more of the new bonds, each with share warrants. Proceeds go to repurchasing about $13.8m of the 2025 notes for about $11.7m and to general corporate purposes. The company says this adds about $175m of liquidity. Separately, 43,000,000 new shares were issued at par (CHF 4.3m) to a wholly-owned subsidiary on Sept 8, taking issued shares to 797,244,072. Warrants and exchangeable bonds could dilute shareholders if used. This continues the company's earlier bond exchanges, and the subsidiary share issues seen in 2021 and 2022.
Transocean announced two awards for Deepwater Asgard totalling about $181 million of firm backlog. One is a one-well Murphy Oil contract at $395,000 per day (about $20 million) starting late fall 2022, with an option for a second well. The other is a one-year contract with another operator at $440,000 per day (about $161 million, plus up to $40,000 per day for extras) starting in the first half of 2023, with three one-year options at dayrates to be agreed. This follows Asgard's current contract with an undisclosed customer that ends in August 2022.
On August 5, 2022 Transocean signed an Equity Distribution Agreement with Morgan Stanley to sell up to $435 million of new shares at market prices, with commission up to 2.0%. It includes the unsold remainder of the June 2021 Jefferies programme, so it replaces that programme. Proceeds are for general corporate purposes, which may include debt repayment or refinancing, rig acquisitions and working capital. Existing shareholders could be diluted if shares are sold; the filing does not say how much was sold under the earlier programme.
Transocean announced two contract awards adding about $1.24 billion of backlog. Petrobras 10000 got a 5.8-year contract offshore Brazil with a national oil company (about $915 million, Oct 2023 to Aug 2029), and Deepwater Conqueror got a two-year US Gulf of Mexico contract with a major operator at $440,000 per day (about $321 million), starting December 2022 straight after its current contract. This extends work beyond the Conqueror's Dec-22 and Petrobras 10000's Oct-23 expiries shown in the fleet report.
On July 27, 2022 Transocean Inc. amended its Citibank-led revolving credit facility (the one dated June 2018, due to mature June 2023). The maturity is extended to June 22, 2025 for the extended commitments, but borrowing capacity falls from $1.33 billion to $773.5 million until June 22, 2023 and then to $600 million. Borrowing is also now conditioned on at least $325 million of available cash (down from $500 million), and the company must prepay borrowings if cash exceeds $325 million. This resolves the earlier open question about the revolver's maturity, though the filing does not say whether the earlier cross-default talks are settled.
Transocean published its routine fleet status report dated July 25, 2022. It still lists 27 ultra-deepwater rigs, 10 harsh environment rigs and two ultra-deepwater drillships under construction. Deepwater Titan's Chevron contract now shows a Q2 2023 start (previously Q1 2023), and Deepwater Atlas's Beacon contract starts Oct-22 at $315,000. Deepwater Conqueror is at $367,000 with Chevron to Dec-22, and Deepwater Asgard moved to $395,000 for Jun-22 to Aug-22. Estimated average dayrates are $329,000 (ultra-deepwater) and $362,000 (harsh) for Q3 2022.
Transocean published its routine April 25, 2022 fleet status report. Atlas's Beacon contract start has moved again, to Q4 2022 with the full sequence now running to Q4 2024, Development Driller III shows a Petrobras job in Colombia (Apr-22 to Jun-22) at 331,000, and KG1 shows Reliance at 215,000 from Mar-22 to Feb-23. Estimated average dayrates are $312,000 (ultra-deepwater) and $386,000 (harsh environment) for Q2 2022.
On March 11, 2022 Transocean issued 26,067,616 new shares at par (CHF 2,606,761.60 total) to one of its own wholly-owned subsidiaries, raising issued share capital to 754,243,781 shares. This follows the 46 million shares issued to a subsidiary in April 2021; the filing does not state the purpose. Shares held by a subsidiary are not shown as sold to outside investors in this filing (the filing calls them 'Treasury Shares'), though whether they feed the $400m at-the-market programme or exchangeable bond settlement is an inference, not stated.
Transocean published its routine February 14, 2022 fleet status report. Atlas's Beacon contract start has slipped to Q4 2022 (from Q3 2022), Dhirubhai Deepwater KG2 and Development Driller III are now shown as idle since January 2022, and Inspiration shows a Hess contract to Aug-22 followed by EnVen Energy. Estimated average dayrates are $311,000 (ultra-deepwater) and $392,000 (harsh environment) for Q1 2022.
Transocean published its routine October 25, 2021 fleet status report. Deepwater Atlas now shows a Beacon contract (start Q3 2022, 315,000 a day), Invictus shows BHP extensions at higher rates through May 2022, and Conqueror shows a Chevron extension (Jan-22 to Oct-22) at 335,000, well below its current 579,000. Estimated average dayrates are $327,000 for ultra-deepwater and $401,000 for harsh environment for Q4 2021. Deepwater Titan's Chevron contract (Q1 2023 to Q1 2028 at 455,000) is unchanged from the prior report.
Transocean published its routine July 21, 2021 fleet status report. Deepwater Titan's Chevron contract now runs Q1 2023 to Q1 2028 at $455,000 a day, reflecting the delay agreed in June. Discoverer Inspiration, idle since October 2020, now shows a Hess contract (Sep-21 to Apr-22) at $215,000, and Petrobras 10000 shows extensions to Oct 2023. Estimated average dayrates for Q3 2021 are $343,000 for ultra-deepwater and $378,000 for harsh environment rigs.
On June 14, 2021 Transocean set up an at-the-market programme with Jefferies LLC, letting it sell shares from time to time up to $400m at market prices, with a commission of up to 2.0%. The proceeds are for general corporate purposes, which may include repaying or refinancing debt. If used, this would issue new shares and dilute existing holders; the filing does not say how many will be sold. This may relate to the 46 million shares issued to a subsidiary in April, but the filing does not say so (inference).
Transocean agreed with the Jurong shipyard (Sembcorp Marine) to delay delivery of its two newbuild drillships: Deepwater Atlas to about December 2021 and Deepwater Titan to about Q2 2022 (the press release says May 2022). In return the shipyard will finance part of the remaining price at 4.5% a year: about $370m for Atlas and about $90m for Titan, repayable over up to six years after delivery. Atlas's financing is expected to be secured by a lien on the rig; Titan's is expected to be unsecured if it is delivered on schedule and starts its Chevron contract. The press release says this improves year-end 2022 liquidity by over $450m. It also says Atlas is expected to work for Beacon on Shenandoah from Q3 2022, subject to Beacon's investment decision by July 31, 2021, and Titan's Chevron operations are now expected to start in Q1 2023. This follows the earlier fleet reports, where Atlas had no contract and Titan's Chevron start was H1/H2 2022.
Transocean published its routine April 28, 2021 fleet status report. It lists Deepwater Titan's Chevron contract starting H2 2022 at $455,000 a day and Deepwater Atlas still with no contract. It shows new short Beacon work for the idle Deepwater Asgard (Jun-Oct 2021) and BHP work for Invictus (Jun-Aug 2021), and a Nautilus contract with POSCO (Apr-Aug 2021). Estimated average dayrates for Q2 2021 are $342,000 for ultra-deepwater and $356,000 for harsh environment rigs.
On April 6, 2021 Transocean issued 46 million new shares at par (CHF 4,600,000 total) to one of its own wholly-owned subsidiaries, raising issued share capital to 685,676,165 shares. The filing describes these as treasury shares issued to a subsidiary, not sold to outside investors; the board also renamed its Health, Safety, Environment and Sustainability Committee. The filing does not state the purpose of the issuance.
26 Feb 2021capital raising announcement● NeutralMajor
On February 26, 2021 Transocean Inc. issued $293,751,000 of new 4.00% senior guaranteed exchangeable bonds due 2025 plus $11,300,670 in cash in exchange for $322,806,000 of its 0.5% exchangeable bonds due 2023, with no cash proceeds received. The new bonds are guaranteed by Transocean Ltd. and six holding subsidiaries and are exchangeable at 190.4762 shares per $1,000 into shares, cash or a mix at the company's election, so shareholders could be diluted if shares are used (inference); this continues the August 2020 exchange of the same 2023 bonds.
Transocean furnished its routine February 12, 2021 fleet status report listing rig contracts and dayrates; the filing states no new financial results or transactions. Compared with the October report, it shows Deepwater Asgard idle from Jan-21, GSF Development Driller I stacked from Nov-20, Deepwater Nautilus idle from Dec-20, Transocean Barents with MOL Norge from May-21 to Dec-21 at $270,000, and Dhirubhai Deepwater KG1 now listed with Reliance through Nov-22. Deepwater Atlas still has no contract.
On October 14, 2020 the NYSE told Transocean its shares no longer meet the rule requiring an average closing price of at least $1.00 over 30 trading days. It has six months to cure (or until the next annual meeting if shareholder approval is needed, e.g. for a transaction); the shares keep trading as RIG with a ".BC" tag, and Transocean says this does not cause a default under its material debt agreements. The filing says the NYSE may start delisting procedures if it is not cured, and that options may include transactions needing shareholder approval.
Transocean furnished its routine October 14, 2020 fleet status report listing rig contracts and dayrates; the filing states no new financial results or transactions. In this report Deepwater Titan (Chevron, H1 2022 to H1 2027, $455,000) still has a contract and Deepwater Atlas still has none, and the report lists Discoverer Inspiration as idle from Oct-20 and Discoverer India as stacked from Jul-20.
On October 2, 2020 PIMCO, Whitebox and others holding about $211m of the 2025 notes sent a second default notice with the same claim about the Mid Holdings guarantees; about $543m of those notes remain outstanding. Transocean calls it meritless, has filed counterclaims in the Whitebox lawsuit seeking a ruling that no default exists, and is in talks with revolver lenders with no assurance of the outcome. This continues the dispute from September.
The exchange offers closed on September 11, 2020: Transocean Inc. issued $687,343,000 of new 11.50% senior guaranteed notes due 2027 in exchange for $1,514,108,000 of existing notes across eleven series (the 2021 to 2041 maturities). That cuts the principal outstanding on those older notes, with the new notes carrying a higher 11.50% rate and guaranteed by Transocean Ltd. and the three Mid Holdings subsidiaries; this completes the exchange offers whose legal challenge was covered earlier.
Holders including PIMCO and Whitebox (together 25.1% of the 8.00% notes due 2027) sent a notice of default, claiming the new Mid Holdings subsidiaries should have guaranteed those notes. Whitebox also sued, but a court denied its request for a temporary restraining order and injunction on September 3. Transocean calls the claims meritless and extended its debt exchange offers to September 9; if a default were upheld and notes accelerated, it could trigger a default under the $1.3bn revolver, which had no borrowings and $25m of letters of credit at June 30, 2020.
14 Aug 2020capital raising announcement● NeutralMajor
On August 14, 2020 Transocean Inc. issued $237,933,000 of new 2.5% exchangeable bonds due 2027 in exchange for $396,556,000 of the 0.5% exchangeable bonds due 2023, with no cash proceeds received. The new bonds are guaranteed by Transocean Ltd. and three new Mid Holdings subsidiaries and can convert into shares at 162.1626 shares per $1,000, so shareholders could be diluted if holders convert (inference on dilution); the principal amount owed on these bonds falls.
Transocean furnished its routine July 15, 2020 fleet status report listing rig contracts and dayrates. Deepwater Titan (Chevron, Q4 2021-Q4 2026, $455,000) still has a contract and Deepwater Atlas still has none; the filing states no new financial results or transactions.
Transocean filed its regular fleet status report dated April 16, 2020. Compared with February, Henry Goodrich is shown stacked from March 2020 and Transocean 712 is shown stacked from April 2020, ending its ConocoPhillips contract listing that ran to January 2021. Dayrates for several Petrobras rigs, the Transocean Norge, Enabler and Encourage are lower than in the February report, and Discoverer Inspiration's Chevron contract no longer appears, replaced by Talos from April 2020. Dayrate reductions are shown but the filing excerpt gives no reason for them.
Transocean filed its regular fleet status report dated February 14, 2020. It lists a new under-construction rig, Deepwater Atlas (no customer or dates given), alongside Deepwater Titan (Chevron, Q4 2021 to Q4 2026, $455,000). The Development Driller III shows a Trinidad contract (customer not disclosed) from April 2020 to April 2021 at $250,000, replacing its $192,000 ExxonMobil rate. Deepwater Asgard is shown with Beacon Offshore at $220,000 from January 2020 and $240,000 from July 2020, the Inspiration with Talos at $210,000 from April 2020, and the KG2 with Woodside in Myanmar at $250,000 from October 2020. Henry Goodrich is shown idle from February 2020. The report states 28 ultra-deepwater rigs.
On January 17, 2020, Transocean Inc. closed the $750 million offering of 8.00% senior unsecured notes due 2027 announced January 8 (Wells Fargo trustee; guaranteed by Transocean Ltd. and three Holdings subsidiaries). The same day it gave notice that it will redeem all of its 9.00% senior notes due 2023, issued in July 2016, on February 16, 2020, at 100% of principal plus accrued interest plus an applicable premium. The filing does not explicitly tie the new notes' proceeds to this redemption and does not state the amount outstanding; linking them would be an inference. This resolves the earlier open question of the unstated use of proceeds for these notes only in part, and it removes the 9.00% notes that had shaped the revolver's maturity terms.
On January 8, 2020, Transocean Inc. started offering $750 million of senior unsecured notes due 2027, guaranteed by Transocean Ltd. and certain subsidiaries. Proceeds are meant to refinance, repurchase and/or redeem existing debt and/or for general corporate purposes. The company also said it had about $3.0 billion of liquidity at December 31, 2019 (including $1.3 billion available under its undrawn secured revolver) and had added $352.9 million of contract backlog since October 2019, including the Development Driller III Trinidad contract (customer undisclosed) announced in December.
Transocean announced on December 12, 2019 that the semisubmersible Development Driller III won a one-year contract off Trinidad and Tobago, expected to start in Q2 2020 and add about $91 million of backlog, excluding mobilization reimbursement. This follows the rig's current ExxonMobil contract in Equatorial Guinea, which the October fleet report showed running to February 2020. The release puts the fleet at 45 units (28 ultra-deepwater, 14 harsh environment, three midwater) plus two drillships under construction; the customer is not named in the filing.
