A Very Important Letter to Shareholders from Transocean RIG

If you own shares in Transocean make sure you read this entire release and make sure you vote. This is a very important vote......

Transocean (NYSE: RIG) today announced that it has commenced the mailing of proxy materials, including a WHITE proxy card and a letter from the Board of Directors, to the company's shareholders of record in advance of the company's 2013 Annual General Meeting ("AGM"), which will be held at 5 p.m. CEST, on May 17, 2013, in Zug, Switzerland. The Proxy Statement and Annual Report are also available through the company's website at http://deepwater.com/ar.

*    The Transocean Board of Directors unanimously recommends that the company's shareholders vote "FOR" a U.S. dollar denominated dividend of $2.24 per share, or approximately $800 million in the aggregate (based upon the number of currently outstanding shares), out of additional paid in capital.

*    The Transocean Board of Directors unanimously recommends that shareholders vote "FOR" the company's five experienced and highly qualified director nominees: Federico F. Curado, Thomas W. Cason, Steven L. Newman, Robert M. Sprague and J. Michael Talbert.

*    The Transocean Board of Directors unanimously recommends that shareholders vote "FOR" the granting of Board authority to issue shares out of the company's authorized share capital. This authority was originally granted at the May 2011 AGM and will expire on May 13, 2013.

*    Shareholders are encouraged to support the Board's recommendations by voting promptly using the company's WHITE proxy card.

*    The letter from the Board of Directors, which follows, discusses Transocean's highly qualified slate of director nominees and reiterates the reasons the proposed $2.24 per share dividend will maximize long term shareholder value. Furthermore, the letter addresses the importance of having the flexibility to pursue value-enhancing opportunities by granting the Board the authority to issue additional shares out of the company's authorized share capital. The Board currently has no plans to exercise this authority.

April 4, 2013....Dear Fellow Transocean Shareholders > Read the entire letter to shareholders


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Transocean: First Quarter Results Show Company Potential

Transocean (RIG) announced its first quarter 2012 results on May 2, 2012. Here are some of the highlights from this report:

• First quarter revenues totaled $2.331 billion. This is a decrease from the $2.422 billion in revenues in the fourth quarter of 2011.
• First quarter 2012 net income attributable to controlling interest was $42 million. This is a significant improvement from the $6.119 billion loss that was taken during the fourth quarter of 2011. The reason for this huge disparity can be found by looking at the "net unfavorable items" category on the income statement. Transocean had $184 million of such items in the first quarter of 2012. The company had $6.176 billion of such items in the fourth quarter of 2011. If these net unfavorable items are backed out, we can see that Transocean still had a higher net income in the first quarter of 2012 compared to the fourth quarter of 2011: $226 million versus $57 million.
• Revenue efficiency was 90.4% in the first quarter of 2012 compared to 91.9% in the fourth quarter of 2011.
• Fleet utilization was 61% for the quarter.
• First quarter 2012 operating and maintenance expenses were $1.410 billion. This is an improvement from the fourth quarter of 2011 which saw operating and maintenance expenses of $1.565 billion excluding estimated loss contingencies associated with the Deepwater Horizonincident.
• Operating cash flows for the first quarter of 2012 totaled $540 million. This is a decrease from the $563 million that the company had in the fourth quarter of 2011.

Over the last few months, I have written several articles showing the strong fundamentals for the offshore drilling market. Transocean made a point of restating these trends during their earnings conference call. According to Terry Bonno, Transocean's SVP of Marketing, "Utilization and dayrates are continuing to improve and have reached levels not seen since the last cycle."

.........Read the entire article "Transocean: First Quarter Results Show Company Potential"

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Goldman Sachs Issues Sell Rating on RIG....Dan Dicker Says Something Quite Different

Transocean (RIG) is one of the day's largest large cap losers after Goldman Sachs initiates coverage with a Sell rating. The firm notes that while RIG has dominated the ultra deepwater business, its rigs need extensive upgrades to keep them compliant in the post Macondo world which consensus estimates don't fully reflect.

Dan Dicker, president at MercBloc, has a very different take on how to play Transocean. And that is what makes a market. If you are a regular reader here then you know that we here at The Crude Oil Trader have very little respect for any call coming out of Goldman Sachs in the oil patch.

Here what Dan had to say today on CNBC.....



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Transocean Drops on Biggest Earnings Miss in Half a Decade

Transocean Ltd. (RIG), the world’s largest offshore oil driller, fell the most in almost three years after third quarter earnings missed analysts’ estimates by the biggest margin in at least half a decade.

Transocean declined 12 percent to close at $49 in New York. Earlier, the stock plunged as much as 14 percent for the worst intraday performance since November 2008. After regular trading on U.S. markets closed yesterday, the company posted a loss of $71 million, or 22 cents a share, its largest third quarter loss in at least 10 years.

Excluding one time items such as foreign exchange contract costs associated with last month’s Aker Drilling ASA acquisition, the Vernier, Switzerland based company recorded per share profit of 3 cents, 73 cents lower than the average of 32 analysts’ estimates compiled by Bloomberg.

The company “did not deliver” in the third quarter, Chief Executive Officer Steven Newman told analysts and investors on a conference call today.

Manufacturing delays among equipment providers prolonged downtime for rigs subject to more stringent U.S. safety rules imposed in the wake of last year’s Macondo disaster in the Gulf of Mexico, Newman said........Read the entire Bloomberg article.



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Flurry of Rig Orders Marks End of Two Year Drought

Since the start of October, drilling companies have ordered at least 17 new rigs, a wave of spending that signals optimism that oil prices will remain high and that producers will continue to demand the latest advances in equipment as they tap increasingly hard to reach offshore reservoirs. Largely built "on spec", that is, without an existing contract from an oil and gas explorer,those orders mark a clear ending to a two year drought in rig purchases as drillers like Transocean, SeaDrill and Atwood Oceanics look to update and bolster their fleets.

The move also indicates how the global enthusiasm for exploiting offshore oil and gas continues, despite the slowdown in U.S. drilling that came as a result of the Deepwater Horizon oil spill.
Of the 17 orders so far this quarter, 13 are for jackup rigs, which stand on legs and typically operate in water depths up to 400 feet. By comparison, only eight jackups were ordered in the two years that ended Sept. 30, according to Tom Curran, senior analyst with Wells Fargo Securities' Oilfield Services & Drilling team.

The quarter's four orders for floating deep-water rigs, which can take three years or more to construct, are the first shipyards have seen since 2008, Curran said. The orders primarily have gone to yards in Southeast Asia......Read the entire article.



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Transocean OKs $3.2 Billion Share Repurchase Program

Transocean's [RIG] Board of Directors has authorized company management to implement the shareholder approved 3.5 billion Swiss franc (CHF) share repurchase program (approximately US $3.2 billion at the exchange rate prevailing at close of trading on February 12, 2010 of US $1.00 to CHF 1.08).

The Board of Directors has also decided to recommend to the shareholders a dividend in the form of a capital reduction denominated in Swiss francs equivalent to approximately US $1.0 billion.

The company intends to list its shares on the SIX Swiss Exchange ("SIX") and will continue to list its shares on the New York Stock Exchange.

The Board of Directors has delegated to company management full authority to begin implementation of the company’s share repurchase program, with an aggregate purchase price of up to CHF 3.5 billion (approximately US $3.2 billion). The share repurchase program was approved by shareholders at Transocean's May 2009 annual general meeting. The company plans to fund any share repurchases from its current and future cash balances and will not use debt to fund any repurchases. Repurchases may be suspended or discontinued at any time.

The Board of Directors has also decided to recommend that the company’s shareholders at their May 2010 annual general meeting approve and authorize the Board of Directors to pay a dividend denominated in Swiss francs for an amount equivalent to approximately US$1.0 billion, or about US $3.11 per share (based on currently outstanding shares), converted to Swiss francs at the exchange rate prevailing two business days prior to the annual general meeting. The dividend would take the form of a reduction of the par value of the company's shares, and if approved, will be paid in four equal installments with expected payment dates in July 2010, October 2010, January 2011 and April 2011.

Distributions to shareholders in the form of a reduction in par value of the company's shares, which is currently CHF 15 per share, are not subject to 35 percent Swiss withholding tax. Shareholders will be paid in US dollars converted using the exchange rate prevailing two business days prior to payment, unless shareholders elect to receive the dividend payment in Swiss francs.

In addition, the company announced its intention to list its shares on the SIX in the second quarter of 2010. Listing on the SIX is subject to approval by the SIX. Transocean's shares will continue to be listed on the New York Stock Exchange.

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ExxonMobil May Strike Deal for $1B Arctic Rig With Transocean [RIG]

Exxon Mobil Corp. is reportedly mulling over a deal with leading offshore rig contractor Transocean to construct a drilling rig capable of operating in extreme Arctic conditions for as much as $1 billion, according to Reuters.

Citing a person familiar with the matter, Reuters reported Friday that ExxonMobil may deploy the rig offshore Greenland, Iceland or Alaska at a dayrate close to record level contracts in the $650,000 range, such as those signed for ultra deepwater rigs by Seadrill and Transocean near the peak of the market in 2008.

In November, Transocean Chief Executive Bob Long stated that the company expected to unveil a new Arctic class newbuild rig order, along with a contract, by the close of the year.

Chief Operating Officer Steven Newman, who will take the helm as Transocean's next chief executive in the first quarter of 2010, also commented during a recent conference call: "We have progressed [the rig's] design fairly far along [and] are in very developed discussions with a customer." Newman was hopeful that the contract would be finalized by the end of 2009, although Transocean had confirmed neither the contract nor the customer as 2009 drew to a close.....Read the entire article.

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Transocean Rents Seen Sinking on Deepwater Rig Glut

Transocean Ltd. and Diamond Offshore Drilling Inc., [RIG] and [DO] the world’s biggest deepwater oil drillers, may face a drop in rig-rental revenue because of a glut of vessels that can operate in oceans two miles (3.2 kilometers) deep. The oversupply will develop in 2011 as rigs that drillers started building when oil prices surged to a record last year are completed, said Jud Bailey, an analyst at investment bank Jefferies & Co. in Houston. Rig rents are likely to drop 10 to 15 percent and stay down until new deepwater developments create enough demand to end the surplus in 2012 or 2013, he said.

“It was a classic case of panic on the part of operators when oil was over $100,” Bailey said. “A part of that panic was just the fact that they couldn’t get a rig. When that psychology reverses, it can be a pretty powerful dynamic.” Of the so called ultra deepwater rigs scheduled for completion between now and the end of 2011, 22 don’t have contracts to drill, according to researcher ODS-Petrodata Inc. in Houston. The most ultra-deepwater rigs to sit without a contract was three in April 2004, said Tom Kellock, head of consulting and research at ODS. Today there is just one......Read the entire article.

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Transocean Maintains Strength In Numbers

The world's largest offshore drilling contractor with 141 jackups, semisubmersibles and drillships, Transocean has been able to maintain its strength through offshore innovation and acquisitions. Merging with Global Santa Fe in 2007 to cement its place as the world's largest offshore drilling fleet, Transocean has consistently set its sights on pushing the boundaries of technology. In fact, Transocean owned and operated the world's first ever jackup rig in 1954. Through the decades, the company has continued to achieve a number of industry firsts, and that spirit of innovation has helped to turn Transocean into an industry leader.....Complete Story

Transocean Surprises, Crude Oil Closes Above $56, Investors Show Interest In Energy Stocks

"Crude Oil Rises Above $56 on Smaller Than Forecast Supply Gain"
Crude oil rose above $56 a barrel for the first time since November after a U.S. government report showed a smaller-than-expected increase in stockpiles. Crude supplies rose 605,000 barrels to 375.3 million last week, the highest since 1990, an Energy Department report showed. A 2.5 million-barrel gain was forecast by analysts surveyed by Bloomberg News. Companies in the U.S. cut fewer workers than economists forecast, indicating the worst of the recession’s job losses may have passed, a report showed today. “The speculators are piling into oil on signs that the economy is recovering,” said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. “Inventories rose only 600,000 barrels when everyone was expecting a gain of 2.5 million, gasoline supplies dropped and employers cut fewer jobs than expected”.....Complete Story

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"Investors Starting to Favor Energy Stocks"
The spring survey of America's money managers conducted by Barron's finds that energy stocks are moving back into favor among investors. In responding to the question to pick the best and worst performing industry sectors for the next 6-12 months, energy was ranked third in the best category and second to last in the worst. One money manager was quoted as saying he expects to see oil prices climbing back to $100 a barrel as a worldwide economic recovery spurs inflation and the Federal Reserve attempts in coming months to mop up all the liquidity it has pumped into the financial system. He characterized the challenge the Federal Reserve faces as "walking a tightrope," and he doesn't.....Complete Story

"Transocean Reports Smaller Than Estimated Decline"
Transocean Ltd., the world’s largest offshore oil driller, reported a smaller than estimated decline in first quarter profit as the company lowered costs in response to slowing demand. Net income dropped to $942 million, or $2.93 a share, from $1.15 billion, or $3.58, a year earlier, Geneva based Transocean said today in a statement. Excluding one time items such as costs to reflect the lower value of two rigs, per-share profit was 27 cents higher than the average of 31 analyst estimates compiled by Bloomberg.

Chief Executive Officer Robert Long reduced operating costs by 17 percent during the January to March period to cope with the lowest quarterly average crude price in more than four years. Energy producers such as BP Plc are delaying projects and slashing budgets to conserve cash.....Complete Story


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Crude Oil Oversold, Is The Short Term Low In?

March crude oil closed sharply lower on Tuesday as it consolidated some of last Friday's rally. Stochastics and the RSI are oversold and are turning bullish hinting that a short term low might be in or is near. The low range close sets the stage for a steady to lower opening on Friday. If March renews this month's decline, psychological support crossing at 30.00 is the next downside target. Closes above the 20 day moving average crossing at 40.46 are needed to confirm that a short term low has been posted. Closes above the reaction high crossing at 48.59 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 38.19. Second resistance is the 20 day moving average crossing at 40.45. First support is last Thursday's low crossing at 33.55. Second support is psychological support crossing at 30.00.

Transocean Profits Fall, China To Prop Up Russia With Loan

"Oil Falls Below $35 as Deepening Recession Slows Global Demand for Fuels"
Crude oil fell below $35 a barrel in New York on speculation a deepening recession in the U.S., Europe and Asia will reduce fuel demand....Complete Story

"Transocean's Profit Falls as Tumbling Energy Prices Reduce Value of Rigs"
Transocean, the world’s largest offshore oil driller, said quarterly profit fell for the first time in more than two years after tumbling energy prices cut the value of some rigs and well-management services....Complete Story

"Eyes on Saudis As OPEC Weighs Output Cuts"
As OPEC ponders its next move at its March 15 meeting, analysts said the scope for further output cuts by the Saudis may be limited by domestic energy needs for natural gas to cool the desert kingdom as spring approaches....Complete Story

"Russia, China Ink $25B Oil Loan Deal"
Russia signed its biggest ever energy deal with China on Tuesday, under which its oil companies will receive $25 billion in loans in exchange for long-term crude supplies....Complete Story

Crude Oil Industry Headline News

"Transocean Provides Fleet Status Report"
Transocean (ticker RIG) today issued an updated fleet status report covering the company's 136-unit offshore drilling fleet. Drilling rig status and contract information on the company's offshore drilling fleet has been condensed into a report titled "Transocean Fleet Status Report," which is available through...Complete Story

"Kuwait's Foreign Minister Named Acting Oil Minister"
Kuwait's foreign minister has been appointed acting oil minister in a new cabinet as the Gulf Arab state tries to end a political standoff which has delayed reforms in the OPEC producer, state media reported on Monday....Complete Story

"Ecuador Ends Oil Contracts Due to Low Prices"
Ecuador will end its oil contracts with companies in France and Italy due to low prices, Mining and Oil Minister, Derlis Palacios, said on Friday....Complete Story

"OPEC Oil Prices Rebound Slightly"
The weekly average prices of OPEC rebounded slightly above $40 per barrel last week to $43.99, the Vienna-based cartel said on Monday....Complete Story

Oil Industry Stock Market Winners and Losers

Stock Market Winners

Meridian Resource...........19.40%
Global Industries, Ltd......10.09%
Superior Energy Services.....4.74%
Trimble Navigation Limited...3.25%
Transocean...................3.17%

Stock Market Losers

Callon Petroleum...........-30.72%
Energy Partners............-20.93%
Edge Petroleum.............-20.83%
Carrizo Oil & Gas..........-16.98%
CARBO Ceramics.............-16.13%

Note: The percentage of change is based on the last 2 days of trading