UPDATE 1-Transocean cuts capital spending on rig payment timing

Thu May 9, 2013 12:01pm EDT

May 9 (Reuters) - Transocean Ltd, owner of the world's largest offshore drilling fleet, said on Thursday its capital expenditures this year would be $2.4 billion instead of $3 billion due to the timing of payments on rigs under construction.

More than half of the $2.4 billion was devoted to the new rig building program, Chief Financial Officer Esa Ikaheimonen told analysts on a conference call.

Transocean now has six ultra-deepwater rigs and two shallow-water jackups being built in shipyards, while at the same time the company is shrinking its existing fleet to sharpen its focus on high-end assets.

The two new jackups will be able to operate in 350 feet of water and drill to 35,000 feet. On the other hand, one of three rigs Transocean sold last quarter was the Interocean III, which was built in 1976 and had a rated water depth of about 300 feet and a drilling depth of 20,000 feet.

The company expects to sell off its remaining four low-specification shallow-water rigs by the end of this year. The company has already brought its fleet size down from 136 rigs a few years ago to 83 now - leaving out the rigs held for sale.

Shares of Transocean were down 1.2 percent at $54.58 on Thursday morning on the New York Stock Exchange, after it posted lower-than-expected profits due to an industry-wide bolt inspection which Ikaheimonen said cost it about $63 million in revenue.