Company News

Transocean Buying Transocean Partners in $1.6B Deal

Rigzone
01/08/2016 21:13
Visualizações: 2212 (0) (0) (0) (0)

Transocean Ltd. is acquiring all outstanding common units of its master limited partnership (MLP), Transocean Partners LLC, in an all-equity deal estimated to have an enterprise value of $1.6 billion.

 

The share-for-unit transaction will grant the MLP’s unitholders 1.1427 Transocean shares for each partnership unit, which has an exchange ratio representing a 15 percent premium to its closing price July 29, according to a Transocean news release. Once the transaction is complete, the company will have a 51 percent ownership in the Discoverer Inspiration, the Discoverer Clear Leader and the Development Driller III.

 

Jeremy Thigpen, Transocean CEO, said in the statement that the all-equity transaction is consistent with the company’s liquidity objectives. In addition, the merger provides an immediate benefit to Transocean from a simplified administration and governance, as well as tangible cost savings, he said.

 

Analysts at Tudor Pickering Holt & Co. (TPH) in Houston said the non-cash deal increases Transocean’s liquidity and adds cash flow. Two of the three rigs that Transocean takes in the merger are contracted at $580,000 per day through October 2018.

 

In addition, TPH said in a note to investors, “We always struggled to see benefits of offshore rigs housed in an MLP [yield vehicle] given offshore pricing/contracting outlook.”

 

MLPs are typically structured as growth vehicles, and Transocean’s partnership took a 6.6 percent yield in its initial public offering. But in the current market, TPH noted, growth is “all but impossible.” The analysts said the merger is a nice step in the right direction, but it’s not a game changer.

 

Earlier this year, Thigpen said it will likely be another three years before Transocean and other large offshore drilling rig suppliers will be able to command higher rates for offshore rigs.

Most Read Today
see see
Rio Pipeline & Logistics 2025
Tanacas celebrates 25 years with the launch of the Smart...
11/09/25
Rio Pipeline & Logistics 2025
Offshore Projects to Strengthen Energy Security in Brazi...
11/09/25
Rio Pipeline & Logistics 2025
IBP Booth Hosts Inspiring Debate on Women in Midstream a...
11/09/25
Rio Pipeline & Logistics 2025
Rio Pipeline 2025 Exhibition Showcases Innovations in En...
11/09/25
Production
Brazil’s Federal Government Oil and Natural Gas Producti...
11/09/25
Rio Pipeline & Logistics 2025
Brazil and Argentina Close to Agreement on Natural Gas T...
11/09/25
Rio Pipeline & Logistics 2025
ITP Brasil showcases high-performance engineering soluti...
10/09/25
Rio Pipeline & Logistics 2025
Overview of investments in pipeline and logistics infras...
10/09/25
Rio Pipeline & Logistics 2025
Young talents present innovative solutions at the Young ...
10/09/25
Rio Pipeline & Logistics 2025
Ministry of Ports and Airports aims to expand the role o...
10/09/25
Auction
PPSA makes available access to the Hybrid Data Package f...
10/09/25
Rio Pipeline & Logistics 2025
Rio Pipeline & Logistics 2025 Opens with Stronger Integr...
09/09/25
Rio Pipeline & Logistics 2025
At Transpetro, Social Responsibility Initiatives Support...
09/09/25
Rio Pipeline & Logistics 2025
DNV participates in Rio Pipeline & Logistics 2025
09/09/25
Rio Pipeline & Logistics 2025
Construtora Elevação Brings Innovation, Efficiency, and ...
09/09/25
ANP
A\Sense wins ANP technology challenge with advanced opti...
09/09/25
Newsletter TN

Contact us

We use cookies to ensure you have the best experience on our website. If you continue to use this site, we will assume that you agree with our Privacy Policy, terms of use and cookies.