17 April 2015, News Wires – Transocean is to take an impairment of up to $120 million after deciding to send yet another drilling unit to the scrap heap.
The US rig giant is letting the ultra-deepwater drillship GSF Explorer head for scrap, which will see it take a non-cash charge of between $100 million and $120 million in its second-quarter results.
It brings to 19 the number of units Transocean has decided to scrap in its latest fleet renewal cycle, and follows the decision in early April to cut the deep-water unit Sedco 707 and mid-water unit GSF Aleutian Key from its fleet.
Those two scappings will see the company book a non-cash charge of between $90 million and $100 million.
The GSF Aleutian Key has most recently been working in Sub-Saharan Africa, while the Sedco 707, built in 1976 at New Orleans-based Avondale Shipyards, was most recently employed in the South American market.
The retirements follow the decision in mid-March to scrap the Deepwater Expedition, Transocean Legend, Transocean Rather and GSF Arctic III, which is expected to result in a non-cash charge this quarter of between $300 million and $325 million.
Cowen & Company wrote in an analyst note on Friday: “The supply removal necessary to balance the market is picking up speed.
“However, just 13 of the recently-scrapped units had worked within the past year, and we expect that around 100 floaters will eventually need to be retired (from the whole rig market) in order to bring the market back into balance.”