Transocean Ltd. (NYSE:RIG) Q2 2022 Results Conference Call August 2, 2022 9:00 AM ET Company Participants Alison Johnson - Investor Relations Jeremy Thigpen - Chief Executive Officer Keelan Adamson - President and Chief Operating Officer Mark Mey - Executive Vice President and Chief Financial Officer Roddie Mackenzie - Executive Vice President and Chief Commercial Officer Conference Call Participants Thomas Johnson - Morgan Stanley Greg Lewis - BTIG David Smith - Pickering Energy Partners Fredrik Stene - Cl ...

Transocean Ltd. (NYSE:RIG) Q1 2022 Earnings Conference Call May 3, 2022 9:00 AM ET Company Participants Cale Dillingham - Investor Relations Jeremy Thigpen - Chief Executive Officer Keelan Adamson - President and Chief Operating Officer Mark Mey - Executive Vice President and Chief Financial Officer Roddie Mackenzie - Executive Vice President and Chief Commercial Officer Conference Call Participants Ian Macpherson - Piper Sandler Connor Lynagh - Morgan Stanley Taylor Zurcher - Tudor Pickering Holt Greg Lewi ...

Financial Data and Key Metrics Changes - For Q4 2021, the company reported adjusted EBITDA of $250 million on adjusted revenue of $671 million, reflecting strong operational performance despite challenges [7][26] - The net loss attributable to controlling interest was $260 million, or $0.40 per diluted share, with an adjusted net loss of $126 million [26] - Operating cash flow for Q4 was approximately $185 million, an increase from $140 million in the previous quarter [26] Business Line Data and Key Metrics Changes - The fleet-wide revenue efficiency was over 94.5% for Q4 and 97% for the year, marking the highest annual revenue efficiency in the company's history [7] - Average day rate for Q4 was $352,000, consistent with guidance and reflecting strong revenue generation across the fleet [27] Market Data and Key Metrics Changes - Oil prices are currently in the $90 per barrel range, significantly above most offshore field break-evens, supporting increased onshore activity [13] - Global oil and gas discoveries fell to a 75-year low in 2021, with upstream investment declining 23% from pre-pandemic levels [14] - Active utilization for sixth and seventh generation drillships has surged to over 90% globally, up from the low-mid-80s [16] Company Strategy and Development Direction - The company aims to manage its rig portfolio prudently to achieve optimal combinations of rate and term, with a focus on reactivating cold stacked rigs as market conditions improve [21][32] - The strategic rationalization of the fleet over the past seven years has created a competitive advantage, positioning the company as a leader in ultra-deepwater and harsh environment drilling [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2022, citing a positive outlook reinforced by recent fixture trends and market projections for commodity supply-demand balances [20] - The company anticipates a significant increase in project sanctioning in Norway, with projections estimating a 255% increase from 2021 to 2022 [20] Other Important Information - The company ended Q4 with total liquidity of approximately $2.7 billion, including unrestricted cash of approximately $975 million [27] - Capital expenditures for Q1 2022 are forecasted to be approximately $121 million, including $92 million for newbuild drillships [31] Q&A Session Summary Question: Update on outlook for Norway versus the UK - Management indicated that the UK is seeing increased demand, with expectations for growth in 2022 and 2023, while Norway is projected to experience a boom in the second half of 2023 and 2024 due to favorable tax schemes [38][39] Question: Insights on contract rates and refinancing - Management noted that the market is balanced with a mix of longer-term and shorter-term contracts, and refinancing options are being considered based on contract backlog [45][46] Question: Discussion on business model and partnerships - Management highlighted ongoing discussions with customers about performance-linked compensation and long-term partnerships, emphasizing the importance of rig availability and service delivery [52][55] Question: Technologies being sought by operators - Management mentioned that operators are increasingly interested in performance-related technologies, including drilling automation and safety enhancements, as well as initiatives to reduce carbon footprints [57][59] Question: Clarification on liquidity forecast - Management confirmed that liquidity is projected to be between $1.4 billion and $1.6 billion by June 2023, with debt repayments being a significant factor in the liquidity bridge from the previous year [62][68]

Financial Data and Key Metrics Changes - For Q3 2021, Transocean reported adjusted EBITDA of $245 million on adjusted revenue of $683 million, resulting in an adjusted EBITDA margin of over 36% [5][28] - The company achieved a quarterly free cash flow of $104 million, marking the sixth consecutive quarter of positive cash generation [6] - The average day rate for the quarter was $367,000, reflecting strong conversion of contractual backlog [29] Business Line Data and Key Metrics Changes - Fleet-wide revenue efficiency matched a company best of 98% for the second consecutive quarter, maintaining a revenue efficiency of 97% or higher for six sequential quarters [6][28] - Operating and maintenance expenses for Q3 were $398 million, favorable relative to guidance due to optimized labor use and lower COVID-related personnel expenses [30] Market Data and Key Metrics Changes - The global floating rig fleet's marketed utilization is nearing 80% to 85%, historically a point for material increases in day rates [13] - Active utilization in the Golden Triangle (U.S. Gulf of Mexico, South America, and Africa) is currently around 90% [13] - In Brazil, 10 rig years have been awarded by Petrobras for commencement in the next 18 months, with expectations for continued strong demand growth [17][18] Company Strategy and Development Direction - Transocean aims to capitalize on the recovery in ultra-deepwater and harsh environment markets, supported by high oil prices and increasing utilization [12][34] - The company is focused on maintaining a disciplined approach to expenditures and will assess cold-stacked assets on a case-by-case basis [34] - Transocean has a $7.1 billion backlog, providing visibility to future cash flows and enabling continued investment in employee training and asset maintenance [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the gradual recovery of the ultra-deepwater market, with oil prices remaining supportive [12] - The company noted that many customers are seeking to establish long-term partnerships rather than going through competitive tenders, indicating a positive market sentiment [61] - Management highlighted the importance of maintaining operational integrity and safety while navigating the recovery [35] Other Important Information - The company has completed $9.8 billion of liability management transactions since 2016, including the repurchase of $1.7 billion of debt [25] - Transocean is committed to reducing greenhouse gas emissions intensity by 40% by 2030 compared to 2019 levels [6] Q&A Session Summary Question: Outlook for 2022 and day rate growth - Management indicated that 2022 may be a transition year with expectations for incremental day rate growth as rig contracts are secured in the latter half of the year [37][40] Question: Brazil's market dynamics - Petrobras has been prolific in awarding contracts, but there is an expected shift towards a more balanced split between Petrobras and IOCs in future project approvals [46][48] Question: Inflation and labor costs - Management acknowledged wage inflation and labor availability challenges, particularly in the Gulf of Mexico, but indicated the ability to pass on costs through contract adjustments [50][52] Question: Partnership approach with customers - Management noted a trend towards direct negotiations and partnership models with customers, emphasizing the value of continuity and operational efficiency [60][62]

Transocean Ltd. (NYSE:RIG) Q2 2021 Earnings Conference Call August 3, 2021 9:00 AM ET Company Participants Lexington May - Manager, IR Jeremy Thigpen - President and CEO Mark Mey - EVP and CFO Roddie Mackenzie - SVP, Marketing, Innovation, and Industry Relations Conference Call Participants Connor Lynagh - Morgan Stanley Greg Lewis - BTIG Taylor Zurcher - Tudor, Pickering, Holt Mike Sabella - Bank of America Ian Macpherson - Piper Sandler Fredrik Stene - Clarksons Platou Securities Karl Blunden - Goldman Sa ...