I was wondering why Transocean (RIG) was bucking the trend today in the oil services and sticking in the green – looks like they just announced a 5 year, $1.19 Billion contract for their rig Pathfinder. If you divide that into days, it looks like a day rate of $650K+ which is about as high as I’ve seen. Continue to love this space and wonder why the valuations are not higher.

• Transocean Inc. (NYSE:RIG – News) today announced that its deepwater drillship Deepwater Pathfinder, a single-activity rig capable of drilling in water depths up to 10,000 feet, has been awarded a five-year contract by a subsidiary of Eni for drilling operations primarily in the U.S. Gulf of Mexico. The contract is scheduled to commence in March 2010 following completion of the rig’s existing contract commitments.
• Estimated contract revenues that could be generated over the five-year contract period are approximately $1.19 billion. Estimated contract revenues represent the maximum amount of revenues that may be earned in the contract period, excluding revenues for cost escalations.
• The Deepwater Pathfinder drillship, which entered service in 1998, is one of 39 High-Specification Floaters in the Transocean fleet, 18 of which are Ultra-Deepwater Floaters capable of drilling in water depths of 7,500 feet or greater.

Pathfinder’s previous dayrate was $395K. We outlined this same path of price escalation in Atwood Oceanics (ATW) a few weeks ago. Once the hedge funds are done running away from the commodity sector, these stocks will shoot up again…

Long Atwood Oceanics in fund; no personal position

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