HOUSTON – Swiss drilling contractor Transocean has written off $2.76 billion in book value for its offshore rig business as it faces falling day rates and weaker demand for deep-water drilling.
Transocean, one of the biggest rig operators in the world with about 160 offshore drilling machines, said Friday it also will delay its earnings release, which was originally scheduled for Thursday afternoon.
It said it anticipates a charge off of $788 million in intangible asset value for its deep-water rig segment because of a poor outlook for the drilling market, as well as a $1.97 billion impairment to its goodwill, as operators react to lower oil prices and a larger number of high tech rigs. It said its remaining goodwill – the intangible book value of a company – will be $2.99 billion.
Transocean’s statement comes as offshore rig contractors are anticipating business to continue to decline in the Gulf of Mexico and elsewhere. Daily rates to run rigs have dropped more than 40 percent in recent months, as international and U.S. oil prices have fallen around $20 a barrel.
Earlier this week, Norway’s Statoil said it would suspend two of Transocean’s offshore rigs, and late last week, Houston jack-up rig contractor Hercules Offshore said it would shut down four rigs in the Gulf and lay off 324 rig crew workers in Louisiana and Galveston.
Transocean shares fell 84 cents early Friday to $29.08 on the New York Stock Exchange.
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