Transocean secures $158 million contract

What happened: Transocean Ltd. (RIG) secured a $158 million contract for its ultra-deepwater drillship Deepwater Asgard, set to commence in Q4 2022, with an estimated 390-day campaign. This follows a series of wins in Norway and Brazil, totaling ~$1.0 billion in firm backlog. RIG's stock was trading at $6.79 as of April 28th, with a forward P/E of 3.84.

Market impact: The offshore drilling sector is buoyed by increased demand for oil and gas, driving RIG's contract wins. This is positive for other offshore drilling companies like EnscoRowan (ESV) and Valaris (VAL), which also benefit from higher activity levels. The contract wins also indicate a potential recovery in offshore drilling, which had been subdued due to the COVID-19 pandemic.

What to watch next: RIG's Q2 2022 earnings, scheduled for late July, will provide insights into the company's financial health and further contract wins. Additionally, the upcoming OPEC+ meeting in early June will be crucial, as any changes in production quotas could impact demand for offshore drilling services. Lastly, keep an eye on RIG's stock price, with $7.00-$7.50 as potential resistance levels.