• Adjusted EBITDA (Q4 2024): $323 million.
• Adjusted Contract Drilling Revenues (Q4 2024): $952 million.
• Adjusted EBITDA Margin (Q4 2024): Approximately 34%.
• Adjusted EBITDA (Full Year 2024): $1.15 billion.
• Adjusted Contract Drilling Revenues (Full Year 2024): Approximately $3.5 billion.
• Adjusted EBITDA Margin (Full Year 2024): Approximately 33%.
• Net Income Attributable to Controlling Interest (Q4 2024): $7 million.
• Net Loss Per Diluted Share (Q4 2024): $0.11.
• Cash Flow from Operations (Q4 2024): Approximately $206 million.
• Positive Unlevered Free Cash Flow (Q4 2024): $177 million.
• Operating and Maintenance Expense (Q4 2024): $579 million.
• Total Liquidity (End of Q4 2024): Approximately $1.5 billion.
• Contract Drilling Revenues Guidance (Q1 2025): Between $870 million and $890 million.
• Operating and Maintenance Expense Guidance (Q1 2025): Between $610 million and $630 million.
• Contract Drilling Revenues Guidance (Full Year 2025): Between $3.85 billion and $9.5 billion.
• Operating and Maintenance Expense Guidance (Full Year 2025): Between $2.3 billion and $2.4 billion.
• Capital Expenditures Guidance (Full Year 2025): Approximately $130 million.

• Warning! GuruFocus has detected 4 Warning Signs with RIG.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Transocean Ltd (NYSE:RIG) reported strong financial performance with an adjusted EBITDA of $323 million for Q4 2024, reflecting a robust EBITDA margin of approximately 34%.
• The company achieved near full utilization of its active fleet through mid-2026, indicating strong demand for its high-specification rigs.
• Transocean Ltd (NYSE:RIG) successfully deployed new technologies, such as the Intellial automation platform and robotic riser bolting systems, enhancing safety and operational efficiency.
• The company secured several high-value contracts, including a $410,000 per day contract with Reliance Industries in India, ensuring strong cash flow through 2027.
• Transocean Ltd (NYSE:RIG) demonstrated industry leadership by installing the first 20k subsea completions in offshore drilling, showcasing its technological advancements and expertise.

Negative Points

• The company reported a net loss of $0.11 per diluted share for Q4 2024, impacted by financial instruments related to exchangeable bonds.
• There are concerns about potential day rate declines due to temporary supply-demand imbalances in the industry, which could affect future contract negotiations.
• Transocean Ltd (NYSE:RIG) faces challenges with its cold-stacked rigs, as reactivation costs and market conditions may delay their return to service.
• The company anticipates increased operating and maintenance expenses in Q1 2025, primarily due to out-of-service and contract preparation periods.
• There is uncertainty regarding the timing of future projects, with potential delays in program commencements for 2026 and 2027, which could impact revenue forecasts.

Q & A Highlights

Q: What are your thoughts on potential day rates for contracts later this year, given industry-wide concerns about supply-demand imbalances? A: Roddie Mackenzie, Executive Vice President and Chief Commercial Officer, stated that while there may be some fixtures at lower rates, especially for commodity 7th generation rigs, it's unlikely for high-specification units. The company believes that drillers will be patient and not sacrifice long-term deals for short-term dips in the market.

Q: How are you evaluating the reactivation of your 7th generation cold-stacked rigs, and could we see one working before 2028? A: Jeremy Thigpen, CEO, mentioned that they continuously evaluate their fleet, considering factors like reactivation costs and potential day rates. They will remain disciplined and only reactivate if the customer is willing to cover reactivation costs with a decent return.

Q: Can you elaborate on the discussions for potential projects in 2026 and 2027, and how are you navigating pricing in these discussions? A: Jeremy Thigpen explained that they are focusing on high-specification rigs, which are in demand. Despite short-term market fluctuations, they are confident in the value of their assets and services and will price contracts accordingly.

Q: What gives you confidence that programs for 2026 and 2027 will materialize as expected, given concerns about delays? A: Jeremy Thigpen and Roddie Mackenzie expressed confidence based on customer commitments and ongoing negotiations for multi-year opportunities. They noted that utilization rates for 2025 and 2026 are already high, indicating strong demand.

Q: Could you provide an update on the Brazil market and Petrobras's future rig demand? A: Roddie Mackenzie highlighted that Petrobras plans to increase its rig count, with expectations of 32 to 33 rigs by late 2025. The company acknowledges the need for all currently contracted rigs, suggesting potential incremental demand.

Q: What are the expected lead times for deploying rigs on new contracts, especially for warm versus cold-stacked rigs? A: Keelan Adamson, President and COO, stated that warm rigs could take 3 to 6 months to prepare, depending on regulatory and customer requirements, while cold-stacked rigs might require 12 to 18 months.

Q: What are your plans for technology and rig safety advancements, particularly regarding Haloguard? A: Keelan Adamson emphasized the success of Haloguard and plans for wider deployment. The focus will be on technologies that enhance safety and decision-making for personnel, preventing accidents and improving operational efficiency.

Q: How do you view the Gulf of Mexico's future drilling activity, and what factors could influence it? A: Jeremy Thigpen noted that while a favorable administration could help, these are long-term projects that take time to materialize. He expects any regulatory benefits to take time to impact demand significantly.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.