Transocean in talks for four new deep-water rigs

Transocean is in discussions with an integrated oil company for the construction of four new ultra-deep-water drillships, which will cost about $3 billion, the company said Monday.

The announcement came hours after Transocean said it would sell 38 shallow-water drilling rigs for about $1 billion, adding to an increased focus on the more-lucrative deep-water operations.

Transocean said it will issue senior notes to fund the construction of the new drillships, which will be capable of drilling in water depths of up to 12,000 feet and well depths of up to 40,000 feet, according to filings with the U.S. Securities and Exchange Commission. Transocean has not yet disclosed the value of the note offering.

Each new rig will be contracted with the oil company for 10 years, beginning after they are expected to start operation in 2015 and 2016, according to SEC filings. Transocean estimated the new contracts for operating the rigs could total $7.6 billion.

The announcements will help the Transcocean boost its focus on its deepest operations, which are pulling in massive day rates as oil companies place larger bets on production from fields more than a mile underwater.

Transocean’s rates for all new contracts announced in August were up tens of thousands of dollars from their prior levels, including an increase of $142,000 a day for use of its Sedco 714 drillship in the North Sea. That ship will pull in $395,000 a day, according to the company’s latest fleet status update.

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,” the company said in its announcement today.

If Transocean does not enter the new drilling contracts and build the new rigs, it will use the funds raised by the senior notes to repay debt and fund other operations, the company said.

Transocean did not disclose the value of the public offering announced today, which is being managed by several Wall Street firms.