Is Transocean (NYSE:RIG)’s Future Secure?
The largest offshore drilling billionaire contractor company Transocean (NYSE:RIG) has been the leader in its oil drilling business World wide. However It recently has been loosing its goodwill since it merged with Global Santa Fe back in 2007. The company’s reputation also suffered because of the deep water massive oil spill accident back in 2010. According to the survey reports from the analysts the situation is already getting worse for the company, the company hasn’t recovered from the previous setback yet and now has to deal with the rising oil prices issue due to which the company’s stock is declining with an increasing rate.
The investors have now already braced themselves and are waiting for the next decline in the company’s stock. The company’s current undone incomplete work accounts for almost $23.6billion. However according to the data available the company is expected to generate revenue of almost $6billion in the next fiscal year. However the main worry is that many of the Transocean (NYSE:RIG)’s customers might not be able to bear the increasing oil prices. This is a pretty serious problem this might lead the customers to cancel their contracts with the company.
This the reason the company’s CEO has recently made press conferences about the company’s concerns regarding the latest problems company is facing. According the him the customers have never judged the company by its quality services. They always provide the best quality services using the state of the art technology. He seems optimistic saying that company is going to revive from its current crises as it revived from the previous one losing only 1% of the backlog $400million. The others aspects highlighted by the company are diversification and ultra deep waters rigs.
The ultra deep water rigs are the real deal for the company, It’s a state of the art drilling technology which is sufficient for getting more and more contracts. He considers it the most important asset for the company’s marketing campaign. The latest ultra deep water fleet according to him is more sustainable tends to work for longer durations. He further adds to his conversation that this is an indication of stability for the company in this time of crises. According to the company’s diversification asset over view the ultra deep water rig accounts for more than 50% of company’s total assets. Among the other assets are the harsh environment, deep water, mid water and high spec jack ups.
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The company also intends to lease modern and heavy machinery to further enhance its drilling capabilities. According to the experts the company can survive all sorts of crises because of its old backlog history. The investors on the other hand have a news to relax a bit as well, as there is always little risk in Transocean (NYSE:RIG) back log. However this doesn’t mean there are no future obstacles for the company, this only means that there is only one less problem to worry about now.