July 10 (UPI) -- Proceeds from the placing of senior secured notes will be used to help finance the construction of a deepwater rig delayed in 2015, Transocean said Tuesday.
The rig company said it plans to offer $600 million in secured notes due 2025, secured by a lien on the Deepwater Pontus rig and other assets related to it.
"The net proceeds from the notes will be used to partially finance the construction or acquisition of the Deepwater Pontus," the company's statement read.
Transocean announced in 2015 it reached an agreement with Royal Dutch Shell and Daewoo Shipbuilding & Marine Engineering Co. to delay the delivery of the Deepwater Pontus by at least a year.
The company said at the time the delay would have no impact on the day rate of duration of the 10-year operating contract for the rig. Deepwater Pontus was listed in Transocean's fleet last year. No further details on the secured notes was available.
Rig companies at the height of a market downturn that saw the price for Brent crude oil, the global benchmark, crash below $30 per barrel were forced to scale back and cut day rates -- what they charge to lease a rig -- in order to survive.
Transocean's placement comes just as second quarter earnings season gets under way. The company, which recently acquired rival rig company Songa Offshore, said revenues from its drilling contracts declined $110 million to $589 million for the three months ending Dec. 31. The company attributed the decline to fewer operating days, as well as lower lease rates for some of its rigs.
Songa Offshore had four rigs in its portfolio designated for harsh environments. On top of its legacy fleet, Transocean has four drill ships designed for ultra-deep waters under construction and two of those are already under contract to Royal Dutch Shell for the next 10 years.
Transocean's fleet of rigs was upgraded and overhauled as new assets come into service, while older ones are retired.