Transocean sees rigs busier in 2013, costs heading higher
(Reuters) - Transocean Ltd (RIG.N), owner of the world's largest offshore oil drilling fleet, said on Monday that it expects most of the recent improvement in revenue-generating levels of its rigs will be sustained next year, though costs are headed higher due to a global offshore booms.
Transocean shares rose 5 percent after it reported higher-than-expected third-quarter earnings overnight, helped by a sharp rise in revenue efficiency, which measures the revenue generated by its rigs against their total revenue-generating capacity.
Revenue efficiency of continuing operations rose to 94.3 percent from 92.1 percent in the prior three months and 88.5 percent in the third of 2011. Transocean said it expects that figure to average 93 percent in the fourth quarter and throughout 2013.
Chief Executive Steven Newman, in a conference call on Monday said the improvement was the result of a better operational model deployed worldwide. "I give the guys offshore a lot of credit for embracing the model and utilizing the tools and systems and applying those rigorously to deliver these kind of results," he said.
Revenue in the fourth quarter was expected to be lower than the third as rigs spend more time in the shipyard. Transocean said that next year the number of out-of-service days is forecast to fall to 1,744 from an estimated 2,524 days in 2012.
Rising costs remain a challenge across the industry due to the influx of new rigs and heavy activity soaking up spare labor and equipment, said Newman, who promised a more detailed update along with the next set of earnings.
"We are focused on minimizing the impact of inflation on our bottom line through disciplined cost control and the negotiation of appropriate commercial terms that account for the economic environment," he said.
Separately, he said Transocean remained open to a U.S. government settlement over the BP (BP.L) Macondo well disaster, but added that recent rulings supported the strength of its case.
Transocean shares were 4.8 percent higher at $48.26 in late morning trading on the New York Stock Exchange.
(Reporting by Braden Reddall in San Francisco; Editing by Leslie Adler)
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