Rig company Transocean says customer inquiries are coming in as energy market starts to turn the corner. File photo by A.J. Sisco/UPI | License Photo
Feb. 23 (UPI) -- Rig company Transocean said that, after reporting an increase in revenues for the fourth quarter, recovery for offshore drillers was evident on the horizon.
Transocean reported revenues for the fourth quarter at $974 million, a gain of 7.5 percent from the third quarter.
"In the face of a very challenging market, we again produced impressive operational and financial results in the fourth quarter," President and CEO Jeremy Thigpen said in a statement.
During the peak of the market downturn last year, Transocean had already seen two rig contracts canceled. Since 2015, it had about a dozen contracts pulled prematurely as energy companies spend less on exploration and production during the market downturn and the company warned that "very few" new contracts were expected in 2016.
Transocean's earnings are important for a market keeping a close eye on exploration and production trends. Low oil prices last year kept spending at a premium, though recovery is emerging as oil prices hold around $55 per barrel.
Spending pressures remain for Transocean, however. Contract drilling revenues declined $93 million because of decreased activity and because the company was cutting the lease rates for its rigs.
Looking ahead, Thigpen said inquiries from potential customers were coming in for Transocean.
"Looking forward, improving market fundamentals along with a steady flow of customer inquiries are increasing our confidence that the offshore drilling market trough is near," he said.
Transocean last year consolidated its business structure by acquiring outstanding shares in its limited liability component Transocean Partners. The deal means the parent company controls a majority stake in the three additional offshore rigs.