Transocean: Post Earnings Sell-Off Provides Buying Opportunity


  • Leading offshore driller reports fourth quarter and full-year 2022 results, largely in line with recently lowered expectations.
  • On the conference call, management tweaked recently provided 2023 guidance but kept revenue expectations unchanged.
  • In absence of earth-shattering news, investors decided to focus on an unexpected $157 million charge related to the company’s recent convertible debt issuance and ongoing lack of cold-stacked drillship reactivations.
  • Company expects to successfully navigate the ongoing weakness in the harsh environment markets with contract announcements expected for all harsh environment rigs with near-term contract end dates including the warm-stacked Transocean Equinox.
  • Investors would be well-served to focus on Transocean’s strong medium- and long-term prospects rather than expecting earth-shattering contract awards week after week. While speculative investors and traders exiting RIG stock might result in more short-term volatility, I consider Wednesday’s sell-off as an opportunity for investors to scale into the shares.
Transocean oil rig ships anchored off Elefsina, Greece


Note: I have covered Transocean (NYSE:RIG) previously, so investors should view this as an update to my earlier articles on the company.

After the close of Tuesday’s regular session, leading offshore driller Transocean reported fourth quarter and full-year 2022 results

Disclosure: I/we have a beneficial long position in the shares of RIG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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