Key Highlights

● Second-quarter net income was $170 million, against a loss of $938 million a year earlier.

● Total fleet utilisation fell to 78.2 per cent from 86.7 per cent last quarter.

● Contract backlog stood at about $6.7 billion as of 5 August 2026.

● Both Transocean and Valaris shareholder meetings are scheduled for 24 November 2026.

Transocean (NYSE:RIG) reported second-quarter results on 5 August 2026. Contract drilling revenues were $966 million, compared with $1,081 million in the first quarter and $988 million a year earlier. Net income was $170 million, against $71 million in the first quarter and a loss of $938 million in the second quarter of 2025. Adjusted net income was $158 million. Adjusted EBITDA was $312 million, a 32.2 per cent margin, down from $440 million and 40.7 per cent in the first quarter. Operating cash flow was $236 million and free cash flow $212 million. Revenue efficiency was 97.0 per cent, while operating and maintenance expense was $608 million and capital expenditure $24 million. Six-month net income was $241 million, with six-month contract revenues of $2,047 million.

Fleet, Utilisation and Backlog

The fleet comprises 27 mobile offshore drilling units: 20 ultra-deepwater drillships and seven harsh environment semisubmersibles. Total fleet utilisation was 78.2 per cent, down from 86.7 per cent in the first quarter but above 67.3 per cent a year earlier. Ultra-deepwater utilisation was 72.6 per cent and harsh environment utilisation 94.2 per cent. Average daily revenue was $472,500 across the fleet, $455,500 for ultra-deepwater units and $510,000 for harsh environment units. Backlog was about $6.7 billion as of 5 August 2026, excluding a $1.0 billion agreement with Equinor for three harsh environment semisubmersibles that will be added once licence partners approve. Five new fixtures since the previous report added about $292 million at a weighted average dayrate of roughly $461,000, and the company cited recent awards in Norway, Australia, the U.S. Gulf and the Ivory Coast.

Debt, Guidance and the Valaris Combination

Total debt principal was $5,107 million at 30 June 2026, against $6,654 million a year earlier. Net debt was $4,312 million, equal to 2.8 times adjusted EBITDA, and liquidity exceeded $1.3 billion. For the third quarter the company guided to contract drilling revenues of $920 million to $960 million, and for 2026 to $3,900 million to $3,975 million, with operating and maintenance expense of $2,325 million to $2,400 million and capital expenditure of about $150 million. Management expects deepwater and harsh environment utilisation to reach the "well into the 90% range" during 2027. A proposed business combination with Valaris Limited is under way. The proxy filing states that each Valaris share is expected to be exchanged for 15.235 Transocean shares, subject to adjustments, and that completion is anticipated in the second half of 2026 but cannot be guaranteed. Both companies' shareholder meetings are scheduled for 24 November 2026, and closing requires shareholder, court, regulatory and NYSE listing approvals.

Utilisation Trend Matters More Than the Headline Swing

Transocean's return to profit mostly reflects a weak year-earlier comparison rather than operational momentum, since the sequential drop in utilisation from 86.7 per cent to 78.2 per cent shows how quickly revenue can shift when contracts end between fixtures. The proposed Valaris combination, under which each Valaris share is expected to convert into 15.235 Transocean shares, still needs shareholder, court, regulatory and NYSE listing approvals before an anticipated second-half 2026 close that the company says cannot be guaranteed.