Transocean announced that BOE Exploration & Production LLC (“BOE”) awarded Transocean a $252 million firm contract for its newbuild ultra-deepwater drillship, the Deepwater Atlas, including a mobilization fee of $30 million. Additionally, the contract provides for a significant performance bonus opportunity based upon agreed operating metrics.

This award results from the final investment decision of BOE and the Shenandoah working interest owners to sanction the previously announced Shenandoah project in the U.S. Gulf of Mexico.

The Shenandoah program comprises two phases. Once delivered from the shipyard, the Deepwater Atlas is expected to commence operations in the third quarter of 2022, initially using dual blowout preventers (“BOP”) rated to 15,000 psi. The initial drilling program is expected to last approximately 255 days and result in approximately $80 million of contract drilling revenue.

Upon completion of the initial drilling program, a 20,000 psi BOP will be installed on the rig, making it Transocean’s second asset with a 20,000 psi-rated well control system. The BOP installation and commissioning is expected to last 45 to 60 days, contributing approximately $17 million of revenue. Following the 20,000 psi BOP installation, the Deepwater Atlas will commence the second phase of the project – the well completion program. This phase is expected to last approximately 275 days and contribute approximately $125 million of contract drilling revenue.

“This is a significant milestone for Transocean, BOE and the Shenandoah partners, as we jointly venture into this new frontier of ultra-deepwater drilling,” said President and Chief Executive Officer, Jeremy Thigpen. “We are extremely pleased to have secured the maiden contract for the Deepwater Atlas; the first of our two 8th generation ultra-deepwater drillships that will enter the market in 2022, both of which will be outfitted for 20,000 psi ultra-deepwater well operations. We are very encouraged by the growing list, across multiple customers, of 20,000 psi opportunities in the U.S. Gulf of Mexico. And, with the only two assets in the world specifically designed to maximize efficiencies for 20,000 psi well completions, we are the undisputed market leader in this space, and thus excited about the future prospects for these state-of-the art assets.”