• Total contract drilling revenues were $691 million, compared to $692 million in the second quarter of 2022 (total adjusted contract drilling revenues of $730 million, compared to $722 million in the second quarter of 2022);
• Revenue efficiency was 95.0%, compared to 97.8% in the prior quarter;
• Operating and maintenance expense was $411 million, compared to $433 million in the prior period;
• Net loss attributable to controlling interest was $28 million, $0.04 per diluted share, compared to $68 million, $0.10 per diluted share, in the second quarter of 2022;
• Adjusted EBITDA was $268 million, compared to $245 million in the prior quarter; and
• Contract backlog was $7.3 billion as of the October 2022 Fleet Status Report.

Transocean has reported a net loss attributable to controlling interest of $28 million, $0.04 per diluted share, for the three months ended September 30, 2022.

Third quarter results included favorable items of $13 million, or $0.02 per diluted share as follows:

• $7 million, $0.01 per diluted share, gain on retirement of debt; and
• $6 million, $0.01 per diluted share, discrete tax items.

After consideration of these favorable items, third quarter 2022 adjusted net loss was $41 million, $0.06 per diluted share.

At $691 million, contract drilling revenues for the three months ended September 30, 2022 were approximately flat sequentially. Lower revenue efficiency in the period was partially offset by net $14 million in revenue associated with the early termination of the Transocean Equinox contract and one additional calendar day in the third quarter.

Contract intangible amortization represented a non-cash revenue reduction of $39 million, compared to $30 million in the second quarter of 2022. The increase was primarily due to the accelerated recognition of $10 million of remaining contract intangible for Transocean Equinox as the result of customer’s early termination of the drilling contract.

Operating and maintenance expense was $411 million, compared with $433 million in the prior quarter. The sequential decrease was primarily due to reduced activity from rigs that became idle in the third quarter and the favorable impact of the strengthening U.S. dollar.

General and administrative expense was $42 million, which is in line with the $43 million in the second quarter of 2022.

Interest expense, net of amounts capitalized, was $96 million, compared with $100 million in the prior quarter. Interest income was $9 million, compared with $4 million in the previous quarter.

The Effective Tax Rate was 16.3% in the current quarter and (4.7)% in the prior quarter. The change in the rate was primarily due to release of valuation allowance and movement in deferred tax expense. The Effective Tax Rate excluding discrete items was (1.2)% compared to (5.2)% in the previous quarter.

Cash provided by operating activities was $230 million, compared to $41 million in the prior quarter. The sequential increase is primarily due to lower payment to vendors and increased collections from customers, partially offset by the timing of interest payments.

Third quarter 2022 capital expenditures of $87 million, compared to $115 million in the prior quarter, were primarily related to the company’s newbuild drillships under construction, including the cash component of the final milestone payment for the delivery of Deepwater Atlas in June 2022.

“The Transocean team continued to provide safe, reliable and efficient operations during the third quarter, resulting in uptime of 97.5%” said Chief Executive Officer Jeremy Thigpen, “I would like to extend my sincere gratitude to the entire Transocean team – offshore and onshore – for delivering for our customers and continuing to take the steps necessary to maximize value for our shareholders.”

Thigpen added, “The robust demand for our assets and services helped us secure an incremental $1.6 billion since our July 25 Fleet Status Report, contributing to our already industry-leading backlog. We remain encouraged by the sustained strength in the offshore drilling market globally and expect demand for the increasingly scarce high-capability drilling rigs Transocean owns and operates to remain strong for the foreseeable future, resulting in higher utilization and dayrates.”

KeyFacts Energy Industry Directory: Transocean