Transocean Ltd. Q4 FY2025 earnings call

• Key accomplishments in 2025: Operationally and financially well-executed, solid Q4 and full-year results, strengthened balance sheet by retiring debt, reduced interest expense, removed costs, excellent operational performance with near 98% uptime, zero integrity and lost time incidents, completed planned projects. • 2026 priorities: Optimize value of differentiated assets, generate industry-leading free cash flow, establish stronger capital structure. • Acquisition of Valaris: Excited about combined capabilities, positions to be a leader, expand geographic footprint and customer base, identified over GBP 200,000,000 in cost synergies, pro forma combined backlog ~$11,000,000,000, expected to accelerate debt reduction to ~1.5x leverage in 24 months of closing, expect to close in 2026. • Market updates: Tendering activity increasing, deepwater offshore drilling outlook strengthening, utilization expected to move to >90% through 2027. Regional updates: U.S. Gulf long-term demand robust, Brazil rig activity stable, Africa growth potential, Mediterranean activity back to pre-COVID levels, Southeast Asia and India have incremental demand, Australia and Norway have stable or robust activity

In Q4 2025, Transocean Ltd. had contract drilling revenues of $1,040,000,000 with an average daily revenue of ~$461,000. Operating and maintenance expense was $605,000,000, G&A expense was $50,000,000. Adjusted EBITDA was $385,000,000 (37% margin), cash flow from operations was ~$349,000,000, free cash flow was $321,000,000 (31% margin). For the full year 2025, adjusted EBITDA was $1,370,000,000 (+~20% YOY), free cash flow was $626,000,000. The company retired ~$1,300,000,000 in debt in 2025, reduced annual interest expense by nearly $90,000,000, removed $100,000,000 in costs and aims to reduce by another $150,000,000 in 2026. Uptime performance was just shy of 98%, zero operational integrity and lost time incidents, completed 5 major planned out-of-service projects on time and budget, recycled 6 rigs in 2025 with one more in early 2026

• Q4 2025 results were in line with expectations and guidance ranges provided in November. • Guidance for first quarter and full year 2026 on a stand-alone basis includes effects of cost reduction initiatives and reflects slightly lower activity vs 2025, assuming idle time on several rigs. • Expect free cash flow to be in line with or better than 2025 as continue to reduce cost and interest expense and improve working capital management. • Intend to utilize free cash flow to opportunistically reduce debt. • Expect to end 2026 with liquidity between $1,600,000,000 and $1,700,000,000 excluding incremental deleveraging

Q: Greg from BTIG asked about post-acquisition chartering strategy and jackup markets.

A: Keelan said combination allows addressing unnecessary cost, minimizing overlap, improving service provision, and that they have learned from past in jackup market.

Q: Eddie from Barclays asked about confidence in inflection happening on time and risks.

A: Keelan and Roddie said it stems from customer conversations, data on tenders and prospects, and that they are through the trough of contracting.

Q: Fredrik from Clarksons asked about fleet placement and rig movement.

A: Keelan and Roderick said they can move units globally, there are opportunities in various regions.

Q: Doug from Capital One asked about early customer response to Valaris acquisition and Petrobras blend-and-extend.

A: Keelan said customer feedback is positive, R. Vayda and Keelan talked about Petrobras negotiations being about cost reductions and term improvements.

Q: Keith from Pickering asked about seventh-gen rigs and Gulf market.

A: Keelan said won't bring rigs back speculatively, R. Vayda said there's probability-weighted assumption in guidance.

Q: Noel from Tuohy asked about latecomers in producers and M&A.

A: Roderick said pivot back to oil and gas, R. Vayda said consolidations make industry more efficient