PRESS RELEASE

Transocean's $2.7bn merger with Ocean Rig 'a winning deal'

By
Tuesday, September 4, 2018

Wood Mackenzie press release

Commenting on today's announcement by Transocean that it will merge with Ocean Rig in a $2.7 billion deal, Leslie Cook, principal analyst, upstream supply chain, at Wood Mackenzie, said: "The purchase of Ocean Rig is in line with Transocean's strategy to have the number one fleet of premium ultra-deepwater and harsh environment rigs.

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"The announcement is not a surprise. Industry consolidation is necessary to get these premium assets back to work over the next two to three years. The Ocean Rig fleet aligns very well with Transocean's best-in-class portfolio."

She added: "It is Wood Mackenzie's view that the premium ultra-deepwater drillship market has reached the bottom and rates for some of the highest-spec assets have the potential to double in the next couple years as active utilisation begins to tighten.

"Operators are already demonstrating a preference for newer rigs that offer greater efficiency in their drilling programmes."

Ms Cook said: "As rates begin to float back up, the need to keep drilling costs down will drive demand for these newer rigs that can offer efficiency gains.

"By buying Ocean Rig, Transocean is positioning itself to offer the industry premium rigs at competitive dayrates.

This is a winning deal - for Transocean, for Ocean Rig and for the industry."