Key Developments: Transocean Ltd (RIG)
20 May 2013
Latest Key Developments (Source: Significant Developments)
Reuters reported that Transocean Ltd said that Chairman Michael Talbert will step down later this year. Talbert, a director since 1994 who was also chief executive from 1994 to 2002, told the board that if re-elected at the upcoming shareholder meeting on May 17, 2013, he will step down as chairman by November and leave the board no later than the 2014 annual meeting, Transocean said. Full Article
Reuters reported that a federal judge on February 14, 2013 accepted Transocean Ltd's guilty plea for violating the U.S. Clean Water Act and the rig contractor's payment of $400 million to settle U.S. criminal charges over the 2010 Gulf of Mexico oil spill at BP Plc's Macondo well. U.S. District Judge Jane Triche Milazzo, of U.S. District Court for the Eastern District of Louisiana, accepted the plea, citing the resulting large fine as a good example of the deterrent effect of the plea process. The overall settlement, unveiled last month by the U.S. Department of Justice, included $1 billion in civil penalties in addition to the $400 million in criminal penalties. The Deepwater Horizon rig, which was owned by Transocean and contracted by BP, was drilling a mile-deep well on April 20, 2010, when a surge of methane gas caused a blowout that killed 11 workers. The well spewed 4.9 million barrels of oil into the Gulf of Mexico for 87 straight days, unleashing a torrent of oil that fouled the shorelines of four Gulf Coast states and eclipsed the 1989 Exxon Valdez spill in Alaska in severity. The accident led to a months-long U.S. deepwater ban and intense scrutiny of the offshore drilling industry, which is now booming worldwide despite lingering public concerns. Of the $400 million in Transocean criminal fines, $150 million will help protect the Gulf of Mexico, while another $150 million will fund spill prevention and response efforts there. Full Article
Reuters reported that Transocean Ltd has agreed to pay $1.4 billion to settle U.S. government charges over BP Plc's massive Gulf of Mexico oil spill in 2010 and the rig contractor admitted that its crew on the Deepwater Horizon was partly responsible. Transocean, which employed nine of the 11 workers killed in the accident, had set aside $1.5 billion for the U.S. Department of Justice out of a $1.95 billion Macondo loss provision. The settlement, unveiled on January 3, 2013 by the DoJ, includes $1 billion in civil penalties and $400 million in criminal penalties. Full Article
Reuters reported that Transocean Ltd has won reversal of decision in favor of AP Moeller Maersk A/S's Maersk Drilling USA in patent litigation in the United States (US) appeals court. Lower court had rejected claims that Maersk did not infringe patents, which were related to offshore drilling. The US federal circuit court of appeals decided that the trial jury had had substantial evidence to justify USD 15 million damages as a reasonable royalty. The federal circuit reverses lower court order granting Maersk's motion for new trial. Full Article
Transocean Ltd announced that on September 28, 2012, Brazilian Superior Court of Justice President, Minister Felix Fischer granted the request of the ANP, the Brazilian oil regulatory agency, and partially suspended the preliminary injunction order that required Transocean to stop operating in Brazil within 30 days. As a result of Justice Fischer's decision, Transocean is permitted to continue to operate its rigs in all fields offshore Brazil, with the exception of the Campo de Frade field. Transocean currently has 10 rigs under contract in Brazil; nine of which are currently assigned to work for customers in other fields. This Superior Court decision was announced one day after Transocean had been served with the preliminary injunction order. The Company experienced no interruption of contract revenue from its operations in Brazil which, for the six months ended June 30, 2012, comprised approximately 11% of its consolidated operating revenues. The Company continues to vigorously pursue all legal avenues to ensure complete resolution of litigation against it in Brazil, including restrictions related to its operations in the Campo de Frade field. Full Article
Reuters reported that Transocean Ltd is selling 38 rigs to focus on more lucrative shallow-water units as well as rigs that work in water more than a mile deep. The Company said the book value of the rigs it sold was $1.4 billion, higher than what it will receive. Full Article
Transocean Ltd announced that its wholly owned subsidiary, Transocean Inc., priced a public offering of $750 million of 2.500% Senior Notes due 2017, issued at a price of 99.714% of the principal amount, and $750 million of 3.800% Senior Notes due 2022, issued at a price of 99.309% of the principal amount (together, the Senior Notes). Transocean Ltd. will fully and unconditionally guarantee the Senior Notes. The offering is expected to close on September 13, 2012, subject to the satisfaction of customary closing conditions. Transocean will have the right to redeem all or part of the Senior Notes at any time prior to maturity at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest and, except, in the case of the 3.800% Senior Notes due 2022, after July 15, 2022, a "make-whole premium." Transocean Inc. intends to use the net proceeds from the offering to fund all or part of the costs associated with the construction of four newbuild drillships. Transocean is currently in discussions with a major integrated international oil company for the construction of, and associated drilling contracts for, four ultra-deepwater newbuild drillships. Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and DNB Markets, Inc. are acting as joint book-running managers in the offering. Full Article
Transocean Ltd announced the proposed public offering of senior notes of wholly owned subsidiary, Transocean Inc. Transocean Ltd. expects to fully and unconditionally guarantee the senior notes. Transocean Inc. intends to use net proceeds from the offering to fund all or part of the costs associated with the construction of four newbuild drillships. To the extent Transocean does not enter into the drilling contracts with customer, and does not construct the newbuilds or, to the extent it does not require the full amount of the proceeds for construction of drillships, Transocean would instead apply net proceeds from this offering to the repayment of debt and for general corporate purposes outside of Switzerland. Pending application of net proceeds from the sale of the senior notes, Transocean Inc. intends to invest such proceeds in cash or cash equivalents. The senior notes will be issued under a shelf registration statement filed by Transocean Ltd. and Transocean Inc. with Securities and Exchange Commission on September 16, 2010, which became automatically effective. Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and DNB Markets, Inc. are acting as joint book-running managers in offering. Full Article
Transocean Ltd Announces Definitive Agreements to Sell 38 Shallow Water Drilling Rigs to Shelf Drilling International Holdings, Ltd.
Transocean Ltd announced that it has reached definitive agreements to sell 38 shallow water drilling rigs to Shelf Drilling International Holdings, Ltd. (Shelf Drilling) for approximately $1.05 billion. The list of rigs to be acquired by Shelf Drilling in the transactions is provided as Appendix A. Shelf Drilling is a newly formed company sponsored equally by Castle Harlan, Inc., CHAMP Private Equity and Lime Rock Partners. The sales price includes approximately $855 million in cash, subject to working capital and other closing adjustments, and $195 million in seller financing. Seller financing will be in the form of preference shares issued by an affiliate of Shelf Drilling. As a component of the agreement, Transocean will provide various transition support services to Shelf Drilling for a period subsequent to the closing of the transactions. The transactions are expected to close in the fourth quarter of 2012, subject to certain conditions. Full Article
BP Plc's $7.8 Billion Gulf Spill Pact Wins Initial Court OK, Settlement Not Include Disputes Between Transocean LTD. And Halliburton Company-Reuters
Reuters reported that BP plc won preliminary court approval of an estimated $7.8 billion settlement to resolve more than 100,000 claims by individuals and businesses stemming from the 2010 Gulf of Mexico oil spill. The accord comprises two agreements, including one that covers economic and property claims and one covering medical claims. In separate rulings on Wednesday, U.S. District Judge Carl Barbier in New Orleans said the agreements reached on March 2 were 'fair, reasonable, and adequate', had 'no obvious deficiencies' and were reached without collusion. He set a November 8 fairness hearing to address objections, and will then consider whether to grant final approval. The settlement does not cover claims by the U.S. government or Gulf Coast states, which could amount to $10 billion, or resolve disputes between BP and its drilling partners Transocean LTD. and Halliburton Company. Full Article
NEW ORLEANS - The officer in charge of safety on Transocean's Deepwater Horizon drilling rig, destroyed in a BP well accident that caused the worst-ever U.S. offshore oil spill, said the post-blowout fire was too big to fight and the evacuation saved lives.