stockrowWhat it does
Transocean provides offshore contract drilling services to oil and gas companies. It supplies mobile drilling rigs, equipment and crews to drill wells for customers exploring for oil and gas or developing known resources. Its rigs can also support work on existing production wells.
The company specializes in deepwater and harsh-environment drilling. Its drillships are ship-shaped vessels that can move between locations and maintain position over a well using onboard propulsion. Its semisubmersibles are partly submerged during drilling and are suited to rough seas. Both types carry crews and supplies so they can work away from port for extended periods.
As of February 17, 2026, Transocean owned or had partial ownership interests in and operated 27 mobile offshore drilling units: 20 ultra-deepwater drillships and seven harsh-environment semisubmersibles. The company operates in a single global market and can move rigs between regions as customer requirements and demand change.
Transocean is a Swiss corporation with its principal executive offices in Steinhausen, Switzerland. Keelan Adamson is president and chief executive officer. As of December 31, 2025, its global workforce included approximately 5,600 individuals, including approximately 380 contractors.
How it makes money
Transocean operates in one segment: contract drilling services. It earns revenue by putting its rigs and crews to work under individually negotiated contracts, obtained through bidding against other drilling contractors or through direct negotiations with operators. Contracts can cover a single well, a group of wells or a stated period.
Drilling contracts generally pay a daily rate, or dayrate. The rate can be higher when operations meet specified performance incentives, and lower or zero when a rig is not mobilized or work is interrupted. Equipment breakdowns, weather and regulatory approvals are among the reasons the rate may change. A customer may also have options to extend work for additional wells or periods.
Ultra-deepwater floaters generated $2.8 billion in FY2025 revenue, while harsh-environment floaters generated $1.2 billion. The former are equipped to drill in water depths of 4,500 feet or greater; the latter can work in harsh conditions and serve several offshore market sectors.
Contract backlog represents the maximum contractual operating dayrate multiplied by the days remaining in firm contracts, with certain probable performance provisions included. It excludes options and conditional agreements. Actual revenue can differ because of downtime, maintenance, lower contractual rates or cancellations.
At December 31, 2025, backlog was $6.29 billion, compared with $8.74 billion a year earlier. By Q3 2026, Transocean reported approximately $8 billion of standalone backlog and over $4 billion of contract awards year to date. The company reported average daily revenue of approximately $463,000 per day for the third quarter of 2026.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Ultra-deepwater floaters | $2.8 billion | 70.0% | 10.3% |
| Harsh environment floaters | $1.2 billion | 30.0% | 18.1% |
Customers and how it sells
Transocean works for oil and gas operators, including integrated, independent and national energy companies. It wins business through competitive bids and direct negotiations. Petrobras, Shell and Equinor were each significant customers in FY2025, accounting for 22.0%, 22.0% and 12.0% of revenue, respectively.
The company deploys its mobile rigs across offshore exploration and development areas. In FY2025, the U.S. accounted for 41.2% of revenue, Brazil for 22.0% and Norway for 16.1%. Rigs can move between regions, although moving costs and the availability of vessels to move them can affect regional supply.
As of February 19, 2026, Transocean’s rigs, including idle and stacked units, were located in the U.S. Gulf, Brazil, the Norwegian North Sea, Greece, Australia, India, Ivory Coast, Mexico and Romania. Customers’ exploration and development spending affects where the company allocates rigs and operating resources.
More recent awards included work for Shell in Norway and a commitment from ONGC in India. Transocean also received formal approval for an Equinor award covering the Enabler, Encourage and Endurance rigs.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| U.S. | $1.6 billion | 41.2% | 4.41% |
| Brazil | $872.0 million | 22.0% | 19.9% |
| Other Countries | $819.0 million | 20.7% | 41.9% |
| Norway | $639.0 million | 16.1% | −2.29% |
Suppliers and costs
Transocean’s costs include crews, rig operations and maintenance, equipment, shipyard work and insurance. Its rigs carry drilling supplies and must undergo repairs, maintenance and periodic recertification. Shipyard projects depend on facilities, labor, equipment and materials; shortages or delayed deliveries can disrupt projects.
The company may stack rigs that do not have contracts, reducing staffing and operating and maintenance costs. Bringing them back to service requires additional spending, which can vary with the time stacked, repairs, upgrades, shipyard availability and the cost of assembling and training a crew. Transocean estimates that reactivating a cold-stacked deepwater drillship costs $100 million to $150 million.
Operating and maintenance expense was $590 million in Q3 2026. Transocean reported inflationary pressure in logistics, fuel and manufactured goods. It expects some 2027 cost increases from repositioning rigs for contracts, periodic surveys, recertifications and overhauls of spare equipment. Customers generally provide fuel, leaving the company exposed to fuel price increases primarily for idle rigs.
- Revenue$4.0B
- Selling, general and administrative−$195.0M
- Other operating costs−$6.1B
- Operating income−$2.3B
Competitive position
Transocean competes for offshore drilling contracts through bids and direct negotiations. Valaris operates rigs across different geographies and customers, and Transocean has agreed to acquire it. It was reported on 4 November 2026 that Noble and Seadrill were peers in a comparison of interest costs.
Transocean’s fleet is designed for demanding offshore work. Its ultra-deepwater drillships can operate in water depths of 4,500 feet or greater, while its harsh-environment semisubmersibles can work in rough conditions. Dual-activity equipment lets some rigs perform drilling tasks simultaneously rather than sequentially. The company also trains crews and requires them to obtain relevant certifications before taking on new roles.
Our reading: The specialized fleet and trained crews provide a meaningful operational barrier, because customers need equipment and personnel capable of working in deep water and harsh conditions. Our reading: That protection is limited by competitive bidding and the ability of mobile rigs to move between regions when demand changes. Our reading: Contract backlog provides some visibility but is not a permanent barrier: customers may have cancellation rights, and downtime can reduce the rates actually earned.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Valaris Limited | Offshore drilling rigs across geographies and customers | High |
| Noble Corporation PLC | Offshore drilling peer | Medium |
| Seadrill Limited | Offshore drilling peer | Medium |
Growth opportunities
Transocean seeks contracts for exploration and development drilling across its existing markets and other offshore regions. It believes producers will direct a greater portion of their budgets toward offshore drilling, particularly deepwater work. It also expects demand for harsh-environment rigs to remain strong through the end of the decade, primarily because of activity in Norway and opportunities in other regions.
Recent awards have extended work for individual rigs. In Q3 2026, a Deepwater Proteus contract added about $325 million of backlog, while two Deepwater Conqueror contracts totaled $305 million. Transocean also added $1 billion of backlog associated with formal approval of an Equinor award for three rigs. Its standalone 2027 contract coverage improved to nearly 95%, while 2028 coverage was around 65%.
The company has agreed to acquire Valaris for Transocean shares, subject to the agreement’s conditions. As of its Q3 2026 update, Transocean had received all regulatory approvals required for closing and shareholder votes were scheduled for November 24. The company expected closing on December 1, following successful votes and court approval, and estimated $200 million in annual synergies after closing.
Transocean may also invest in rig upgrades, new construction or acquisitions. Such investments can require substantial cash or share issuance, and the company may not have secured drilling contracts when it makes them.
- $2.6BFY2021
- $2.6BFY2022
- $2.8BFY2023
- $3.5BFY2024
- $4.0BFY2025
- $3.9BFY2026 guidance
Structural risks
- Offshore demand: Drilling activity depends on customers’ exploration and development spending, which is affected by volatile oil and gas prices, energy demand, government policy and geopolitical events.
- Contracts and downtime: Customers can terminate some contracts, sometimes without a fee, under specified circumstances. Equipment problems, weather or other interruptions can reduce dayrates, and backlog may not be fully realized.
- Debt and financing: Transocean has substantial debt, including secured debt. Financing restrictions or a default could limit access to capital; secured debtholders could foreclose on collateral, including drilling units.
- Operating hazards and regulation: Offshore work exposes the company to pollution and other operating risks. Customer indemnities may not cover every loss or be enforceable, while environmental and safety rules can increase costs or limit operations.
- Rig projects: Shipyard delays, equipment shortages and labor problems can increase project costs. Stacked rigs require spending to return to service, and some may never return to drilling work.
- Valaris transaction: The proposed combination may be delayed or fail to occur for reasons outside Transocean’s control.
Bottom line
Our reading
Transocean’s business rests on specialized mobile rigs, experienced crews and contracts with offshore oil and gas operators. Its backlog provides visibility into future work, but actual revenue depends on rigs operating and customers honoring their commitments. Substantial debt, the cost of keeping rigs ready and the proposed Valaris acquisition add financial and execution exposure alongside the company’s dependence on offshore drilling demand.