Transocean Ltd. Q1 FY2026 earnings call

First, operational performance was strong with 98% uptime, adjusted EBITDA $440 million and over 40% margin. Announced approximately $1.6 billion of backlog including new contracts and extensions. Market updates: improving demand for rigs and services, Middle East events amplify energy security imperative. Pending acquisition of Valeris: seeking antitrust approval in seven countries, received approval in Saudi Arabia and Trinidad and Tobago, second request from US Department of Justice, working on approvals in other countries, confident of closing in second half of 2026 with over $200 million cost synergies.

Operational performance was very strong with 98% uptime. Adjusted EBITDA was $440 million with over 40% margin. Average daily revenue was $476,000, highest in over a decade. Backlog increased to over $7 billion with nearly one - third related to a three - year contract on the Transocean Barrens in Norway at $450,000 per day. In Brazil, three Ultra Deepwater ships had contract extensions. In the Eastern Med, the Deepwater Asgard had a five - well contract. Full year 2026 and 2027 contract coverage is 86% and 73% respectively.

Second quarter guidance provided, full year revenue upper range reduced by $50 million to $3.9 billion, capital expenditure increased by $20 million due to certain customer requirements, cost guidance reflects ongoing cost efficiency initiatives and slightly lower activity in 2026, expect to retire at least $750 million in total debt in 2026, ending the year with principal balance around $4.9 billion, standalone total liquidity expected to be between $1.25 billion and $1.35 billion by year - end.

Antitrust review for acquisition of Valeris has second request from US Department of Justice, need to navigate regulatory approvals in multiple countries which could potentially cause delays or complications.

Q: Big picture question on market tightening and 2027 market compared to 2023, A: Market development as forecasted prior to recent conflicts, awards in first quarter, utilization building.

Q: Petrobras blend and extends, A: Significance of delta between 6th and 7th gen rigs' day rates, portfolio view on fleet.

Q: M&A process for Valaris, A: Second request part of process, confident DOJ will approve, working with regulatory bodies.

Q: Reactivating cold stack rig, A: Cost around $100 - $150 million, timeline 12 - 15 months, need contract to recover cost.

Q: Incremental activity related to Middle East events, A: India's ONGC and Oil India action, Indonesia's activity, diversified global supply.

Q: Harsh weather market, A: Harsh environment market tightening, opportunity for Transocean's fleet, shift towards longer - term contracting.

Q: Exploration to development projects, A: Examples in Nigeria, Namibia, reserve replacement issue.

Q: Energy security and economic opportunity, A: Reinforcement of existing decisions, domestic production importance