EQNR - Transocean Secures Important CAT-D Rig Contracts With Equinor - Buy On Weakness
2023-03-28 21:34:53 ET
Summary
- Company secures eagerly-awaited follow-on work with Equinor for two of its so-called Category D ("CAT-D") rigs at respectable terms.
- Total firm backlog addition amounts to $382 million. Both rigs will be upgraded at the expense of Equinor.
- While Transocean will take a slight cash flow hit under the new contract terms, rates are actually among the highest awarded offshore Norway in recent years.
- While the company still needs to secure near-term work for the harsh environment rigs Transocean Equinox, Transocean Endurance, and Transocean Barents, Tuesday's announcement represents a major step forward in navigating ongoing weak market conditions in the North Sea.
- While I wouldn't chase the shares after the most recent recovery rally, investors should consider adding on any major weakness.
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Transocean Secures Important CAT-D Rig Contracts With Equinor - Buy On Weakness