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Transocean Inc. Reports First Quarter 2004 Results

April 27, 2004

HOUSTON--(BUSINESS WIRE)--April 27, 2004--Transocean Inc. (NYSE:RIG) today reported net income for the three months ended March 31, 2004 of $22.7 million, or $0.07 per diluted share, on revenues of $652.0 million, compared to net income of $47.2 million, or $0.15 per diluted share, on revenues of $616.0 million for the three months ended March 31, 2003. Net income adjusted(1) for early debt retirement and TODCO initial public offering (IPO)-related items for the three months ended March 31, 2004 totaled $49.5 million, or $0.15 per diluted share, compared to net income adjusted for an asset impairment for the three months ended March 31, 2003 of $48.2 million, or $0.15 per diluted share.

Transocean Drilling Segment - Revenues for the three months ended March 31, 2004 of $578.2 million were 9% greater than revenues reported during the three months ended December 31, 2003 due chiefly to integrated services revenue generated from a North Sea drilling program, increased activity in Asia and the buyout of the remaining interest in the Deepwater Drilling L.L.C. joint venture, which owns the drillship Deepwater Pathfinder. Segment operating income before general and administrative expense of $178.2 million and field operating income(2) (defined as revenues less operating and maintenance expenses) of $245.0 million for the three months ended March 31, 2004 improved from levels experienced in the preceding three months ended December 31, 2003 due to the higher revenues in the quarter and lower operating and maintenance costs aided by the absence of Nigeria restructuring charges. Segment fleet utilization during the three months ended March 31, 2004 improved slightly to 69% from 68% for the three months ended December 31, 2003 due principally to higher utilization of the company's High Specification Floaters, especially in Asia and the Gulf of Mexico.

The company has seen improving demand for its High-Specification Floaters in the Norwegian North Sea market sector and expects to see improvement in other market sectors as the year progresses. Since the commencement of 2004, five of the company's High-Specification rigs have received new contracts with durations of 12 to 36 months. Development drilling projects in West Africa and exploration opportunities in the Gulf of Mexico continue to support prospects for deepwater rig demand improvement over the long-term, although the risk of project delays remains, especially in Nigeria and Angola. The company currently has 64% of its remaining High-Specification Floater fleet days in 2004 committed to firm contracts, up from 55% in late 2003, but remains concerned regarding the risk of intermittent idle time on these units. Expected idle time on some High-Specification rigs in Brazil, Norway and West Africa, following the completion of projects and planned shipyard time, together with the mobilization of a drillship for a drilling program offshore Pakistan will contribute to an expected reduction in revenues from the High-Specification Floater fleet during the second quarter of 2004.

Prospects for the company's Jackup Rig fleet are currently strengthening with near-term incremental jackup rig demand expected in Southeast Asia and the Middle East, followed by anticipated improving demand in India beginning in the fourth quarter of the year. The excess jackup rig capacity present in West Africa since the second half of 2003 is continuing, but some of these idle units could be mobilized to other regions during the year.

The company's Other Floaters remain significantly underutilized, especially in the U.K. sector of the North Sea and the Gulf of Mexico where approximately 40% of the industry's capacity resides. Seasonal improvement in the U.K. sector of the North Sea has begun and should support higher utilization in the region into the third quarter of 2004, while utilization in the Gulf of Mexico continues to be hindered by competition from higher specification rigs. Other regions are generally balanced or modestly oversupplied, offering few opportunities for mobilizing units to more robust market sectors. A reduction in activity for integrated services programs in the North Sea should result in lower revenues for this segment of the company's fleet during the second quarter of 2004.

TODCO Segment - Revenues for the three months ended March 31, 2004 were $73.8 million. The segment reported an operating loss before general and administrative expense of $26.9 million and a field operating loss(2) of $5.4 million during the same three month period.

Liquidity - Cash flow from operations totaled $192.2 million for the three months ended March 31, 2004, while total debt was reduced by $411.7 million. During the quarter, the company received net proceeds of $155.7 million from the TODCO IPO.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m. ET on April 27, 2004. To participate, dial 303-262-2075 approximately five to 10 minutes prior to the scheduled start time of the call.

In addition, the conference call will be simultaneously broadcast over the Internet in a listen-only mode and can be accessed by logging onto the company's website at www.deepwater.com and selecting "Investor Relations." It may also be accessed via the Internet at www.CompanyBoardroom.com by typing in the company's New York Stock Exchange trading symbol, "RIG."

A telephonic replay of the conference call should be available after 1:00 p.m. ET on April 27 and can be accessed by dialing 303-590-3000 and referring to the passcode 575769. Also, a replay will be available through the Internet and can be accessed by visiting either of the above-referenced Worldwide Web addresses.

TODCO will also conduct a teleconference call at 9:00 a.m. ET on April 27, 2004. To participate, dial 877-692-2086 approximately five to 10 minutes prior to the scheduled start time of the call. TODCO's conference call will be simultaneously broadcast over the Internet in a listen-only mode and can be accessed by logging onto the TODCO website at www.theoffshoredrillingcompany.com. For more information, see TODCO's website.

Monthly Fleet Update Information

Drilling rig status and contract information on Transocean Inc.'s offshore drilling fleet has been condensed into a report titled "Monthly Fleet Update," which is available through the company's website at www.deepwater.com. The report is located in the "Investor Relations/Financial Reports" section of the website. By subscribing to the Transocean Financial Report Alert, you will be immediately notified when new postings are made to this page by an automated e-mail that will provide a link directly to the page that has been updated. Shareholders and other interested parties are invited to sign up for this service.

Forward-Looking Disclaimer

Statements regarding future opportunities and outlook for the company and the company's Transocean Drilling business segment and fleet categories, dayrates, rig utilization, drilling activity, contract opportunities, idle time, rig mobilizations, integrated service projects, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with international operations, actions by customers and other third parties, the future price of oil and gas and other factors detailed in the company's most recent Form 10-K and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.

Transocean Inc. is the world's largest offshore drilling contractor with a fleet of 95 mobile offshore drilling units, excluding the 70-rig fleet of TODCO, a publicly traded drilling company in which Transocean Inc. owns a majority interest. The company's mobile offshore drilling fleet is considered one of the most modern and versatile in the world due to its emphasis on technically demanding segments of the offshore drilling business, including industry-leading positions in high-specification deepwater and harsh environment drilling units. The company's fleet consists of 32 High-Specification Floaters (semisubmersibles and drillships), 25 Other Floaters, 26 Jackup Rigs and other assets utilized in the support of offshore drilling activities worldwide. With a current equity market capitalization in excess of $8 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."

(1) Net income adjusted for certain items, a non-GAAP measure, is
    computed by subtracting from or adding to net income, a GAAP
    measure, items that occurred during the three months ended March
    31, 2004 and are considered by management to be outside the normal
    course of operations. A reconciliation for the periods reported
    may be found in the accompanying schedule titled Non-GAAP
    Financial Measures and Reconciliations - Adjusted Net Income and
    Earnings Per Share.

(2) For a reconciliation of segment operating income, before general
    and administrative expense to field operating income, see the
    accompanying schedule titled Non-GAAP Financial Measures and
    Reconciliations - Operating Income (Loss) Before General and
    Administrative Expense to Field Operating Income (Loss) by
    Segment.


                   TRANSOCEAN INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In millions, except per share data)
                              (Unaudited)

                                                  Three Months Ended
                                                        March 31,
                                                  --------------------
                                                     2004      2003
                                                  ---------- ---------
Operating Revenues
 Contract drilling revenues                          $583.9    $587.5
 Other revenues                                        68.1      28.5
                                                      652.0     616.0
Costs and Expenses
  Operating and maintenance                           412.4     374.1
  Depreciation                                        131.5     126.8
  General and administrative                           15.1      13.9
  Impairment loss on long-lived assets                    -       1.0
  Gain from sale of assets, net                        (3.8)     (1.4)
  Gain on sale of TODCO initial public offering       (39.4)        -
                                                      515.8     514.4

Operating Income                                      136.2     101.6

Other Income (Expense), net
  Equity in earnings of joint ventures                  2.3       3.6
  Interest income                                       2.1       6.9
  Interest expense                                    (47.4)    (52.6)
  Loss on retirement of debt                          (28.1)        -
  Other, net                                            1.4      (0.6)
                                                      (69.7)    (42.7)

Income Before Income Taxes and Minority
 Interest                                              66.5      58.9

Income Tax Expense                                     48.0      11.8
Minority Interest                                      (4.2)     (0.1)
Net Income                                            $22.7     $47.2

Earnings Per Share
  Basic                                               $0.07     $0.15
  Diluted                                             $0.07     $0.15

Weighted Average Shares Outstanding
   Basic                                              320.6     319.7
   Diluted                                            324.3     321.6


                   TRANSOCEAN INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                   (In millions, except share data)

                                                 March 31,  Dec. 31,
                                                ----------- ----------
                                                   2004        2003
                                                ----------- ----------
                                                (Unaudited)

                                ASSETS

Cash and Cash Equivalents                           $397.9     $474.0
Accounts Receivable, net
   Trade                                             418.7      435.3
   Other                                              31.8       45.0
Materials and Supplies, net                          151.8      152.0
Deferred Income Taxes                                 25.3       41.0
Other Current Assets                                  56.3       31.6
   Total Current Assets                            1,081.8    1,178.9

Property and Equipment                            10,644.2   10,673.0
Less Accumulated Depreciation                      2,765.6    2,663.4
   Property and Equipment, net                     7,878.6    8,009.6

Goodwill                                           2,230.8    2,230.8
Investments in and Advances to Joint Ventures          6.2        5.5
Deferred Income Taxes, net                            28.2       28.2
Other Assets                                         216.8      209.6
   Total Assets                                  $11,442.4  $11,662.6

                 LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts Payable                                    $144.6     $146.1
Accrued Income Taxes                                  52.5       57.2
Debt Due Within One Year                              47.2       45.8
Other Current Liabilities                            280.8      262.0
   Total Current Liabilities                         525.1      511.1

Long-Term Debt                                     3,199.2    3,612.3
Deferred Income Taxes                                 58.3       42.8
Other Long-Term Liabilities                          304.2      299.4
   Total Long-Term Liabilities                     3,561.7    3,954.5

Commitments and Contingencies
Minority Interest                                    121.5        4.4

Preference Shares, $0.10 par value; 50,000,000
 shares authorized, none issued and outstanding          -          -
Ordinary Shares, $0.01 par value; 800,000,000
 shares authorized, 320,759,263 and 319,926,500
 shares issued and outstanding at March 31,
 2004 and December 31, 2003, respectively              3.2        3.2
Additional Paid-in Capital                        10,662.7   10,643.8
Accumulated Other Comprehensive Loss                 (20.3)     (20.2)
Retained Deficit                                  (3,411.5)  (3,434.2)
   Total Shareholders' Equity                      7,234.1    7,192.6
   Total Liabilities and Shareholders' Equity    $11,442.4  $11,662.6


                   TRANSOCEAN INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (In millions)
                              (Unaudited)

                                                 Three Months Ended
                                                      March 31,
                                               -----------------------
                                                   2004        2003
                                               ----------- -----------
Cash Flows from Operating Activities
  Net income                                        $22.7       $47.2
  Adjustments to reconcile net income to
   net cash provided by operating activities
    Depreciation                                    131.5       126.8
    Deferred income taxes                            31.3        27.6
    Equity in earnings of joint ventures             (2.3)       (3.6)
    Net gain from disposal of assets                 (1.9)       (0.7)
    Gain on sale of TODCO initial public
     offering                                       (39.4)          -
    Loss on retirement of debt                       28.1           -
    Impairment loss on long-lived assets                -         1.0
    Amortization of debt-related
     discounts/premiums, fair value adjustments
     and issue costs, net                            (7.6)       (1.8)
    Deferred income, net                             (3.3)        6.4
    Deferred expenses, net                           (1.9)       (4.8)
    Other long-term liabilities                       2.3         6.9
    Other, net                                        6.2         0.7
  Changes in operating assets and liabilities
      Accounts receivable                            29.8        17.6
      Accounts payable and other current
       liabilities                                   23.6        42.4
      Income taxes receivable/payable, net           (2.4)      (40.7)
      Other current assets                          (24.5)      (34.5)
Net Cash Provided by Operating Activities           192.2       190.5

Cash Flows from Investing Activities
  Capital expenditures                              (18.5)      (24.4)
  Proceeds from disposal of assets, net              10.5         2.2
  Proceeds from TODCO initial public offering       155.7           -
  Joint ventures and other investments, net           1.5         1.4
Net Cash Provided by (Used in) Investing
 Activities                                         149.2       (20.8)

Cash Flows from Financing Activities
  Repayments on revolving credit agreements         (50.0)          -
  Net borrowings from issuance of debt                1.1           -
  Repayments on other debt instruments             (381.6)      (47.8)
  Cash from termination of interest rate swaps          -       173.5
  Net proceeds from issuance of ordinary shares
   under stock-based compensation plans              14.0        10.9
  Other, net                                         (1.0)       (0.1)
Net Cash Provided by (Used in) Financing
 Activities                                        (417.5)      136.5

Net Increase (Decrease) in Cash and Cash
 Equivalents                                        (76.1)      306.2
Cash and Cash Equivalents at Beginning of
 Period                                             474.0     1,214.2
Cash and Cash Equivalents at End of Period         $397.9    $1,520.4


                            Transocean Inc.
                      Fleet Operating Statistics

                                              Operating Revenues
                                               ($ Millions) (1)
                                         -----------------------------
                                              Three Months Ended
                                         -----------------------------
                                                   December
                                         March 31,    31,    March 31,
Transocean Drilling Segment:               2004      2003      2003
                                         --------- --------- ---------
Contract Drilling Revenues
      High-Specification Floaters:
          Fifth-Generation Deepwater
           Floaters                        $194.9    $187.5    $175.7
          Other Deepwater Floaters         $108.1     $96.9    $116.2
          Other High-Specification
           Floaters                         $30.6     $31.9     $33.3
      Total High-Specification Floaters    $333.6    $316.3    $325.2
      Other Floaters                        $62.7     $67.9     $81.8
      Jackups                              $101.5    $104.6    $115.3
      Other Rigs                            $24.1     $24.4     $16.7
Subtotal                                   $521.9    $513.2    $539.0
Client Reimbursable Revenues                $16.6     $18.1     $21.6
Integrated Services and Other               $39.7     $(0.2)     $2.1
Segment Total                              $578.2    $531.1    $562.7

TODCO Segment                               $73.8     $60.4     $53.3

Total Company                              $652.0    $591.5    $616.0


                                           Average Dayrates  (1) (2)
                                              Three Months Ended
                                         -----------------------------
                                                   December
                                         March 31,    31,    March 31,
Transocean Drilling Segment:               2004      2003      2003
                                         --------- --------- ---------
      High-Specification Floaters:
          Fifth-Generation Deepwater
           Floaters                      $179,200  $186,500  $183,800
          Other Deepwater Floaters       $101,300  $101,400  $113,600
          Other High-Specification
           Floaters                      $115,200  $117,900  $123,300
      Total High-Specification Floaters  $137,800  $141,800  $144,600
      Other Floaters                      $62,800   $60,600   $67,000
      Jackups                             $51,400   $53,700   $56,900
      Other Rigs                          $44,200   $45,200   $43,200
Segment Total                             $87,900   $87,900   $91,600

TODCO Segment                             $25,700   $21,500   $18,500

Total Drilling Fleet                      $69,900   $67,400   $69,100

                                              Utilization (1) (2)
                                         -----------------------------
                                              Three Months Ended
                                         -----------------------------
                                                   December
                                         March 31,    31,    March 31,
Transocean Drilling Segment:               2004      2003      2003
                                         --------- --------- ---------
      High-Specification Floaters:
          Fifth-Generation Deepwater
           Floaters                            92%       91%       97%
          Other Deepwater Floaters             78%       69%       76%
          Other High-Specification
           Floaters                            73%       74%       75%
      Total High-Specification Floaters        83%       78%       83%
      Other Floaters                           42%       47%       50%
      Jackups                                  83%       81%       87%
      Other Rigs                               54%       53%       36%
Segment Total                                  69%       68%       69%

TODCO Segment                                  38%       40%       38%

Total Drilling Fleet                           56%       56%       55%

(1) Certain reclassifications have been made to prior periods to
    conform to current quarter presentation.
(2) Average dayrates are defined as contract drilling revenue earned
    per revenue earning day in the period and utilization is defined
    as the total actual number of revenue earning days in the period
    as a percentage of the total number of calendar days in the
    period.


                   Transocean Inc. and Subsidiaries
            Non-GAAP Financial Measures and Reconciliations
          Adjusted Net Income and Diluted Earnings Per Share
                           (in US$ millions)

                                           For the Quarter Ended
                                      --------------------------------
                                      March 31,  December   March 31,
                                                     31,
                                        2004       2003       2003
                                      ---------- ---------- ----------

Adjusted Net Income

Net income as reported                    $22.7       $5.5      $47.2
  Add back:
    After-tax gain from sale of IPO of
     TODCO shares                         (39.4)         -          -
    Tax valuation allowance related to
     TODCO IPO                             31.0          -          -
    After-tax loss on early retirement
     of debt                               28.1          -          -
    Stock option vesting resulting
     from the TODCO IPO                     7.1          -          -
    After-tax restructuring of Nigeria
     benefit plans                            -       17.4          -
    After-tax loss on impairment of
     certain long-lived assets                -          -        1.0
                                      ---------- ---------- ----------
Net income as adjusted                    $49.5      $22.9      $48.2
                                      ---------- ---------- ----------

Diluted Earnings Per Share:

Net income as reported                    $0.07      $0.02      $0.15
  Add back:
    After-tax gain from sale of IPO of
     TODCO shares                         (0.12)         -          -
    Tax valuation allowance related to
     TODCO IPO                             0.09          -          -
    After-tax loss on early retirement
     of debt                               0.09          -          -
    Stock option vesting resulting
     from the TODCO IPO                    0.02          -          -
    After-tax restructuring of Nigeria
     benefit plans                            -       0.05          -
                                      ---------- ---------- ----------
Net income as adjusted                    $0.15      $0.07      $0.15
                                      ---------- ---------- ----------


                   Transocean Inc. and Subsidiaries
            Non-GAAP Financial Measures and Reconciliations

   Operating Income (Loss) Before General and Administrative Expense
              to Field Operating Income (Loss) by Segment
                           (in US$ millions)

                                               For the Quarter Ended
                                              ------------------------
                                              March   December March
                                                31,      31,     31,
                                                2004     2003    2003
                                              ------- -------- -------

Transocean Drilling Segment
   Operating revenue                          $578.2   $531.1  $562.7
   Operating and maintenance expense           333.2    354.1   315.5
   Depreciation                                107.3    104.1   103.6
   Impairment loss on long-lived assets            -        -     1.0
   Gain from sale of assets, net               (40.5)    (2.5)   (1.4)
                                              ------- -------- -------
 Operating income before general and
  administrative expense                       178.2     75.4   144.0
 Add back: Depreciation                        107.3    104.1   103.6
           Impairment loss on long-lived
            assets                                 -        -     1.0
           Gain from sale of assets, net       (40.5)    (2.5)   (1.4)
                                              ------- -------- -------
 Field operating income                       $245.0   $177.0  $247.2
                                              ------- -------- -------

TODCO
 Segment
   Operating revenue                           $73.8    $60.4   $53.3
   Operating and maintenance expense (1)        79.2     52.7    58.6
   Depreciation                                 24.2     23.0    23.2
   Impairment loss on long-lived assets            -     (0.3)      -
   Gain from sale of assets, net                (2.7)    (0.4)      -
                                              ------- -------- -------
 Operating loss before general and
  administrative expense                       (26.9)   (14.6)  (28.5)
 Add back: Depreciation                         24.2     23.0    23.2
           Impairment loss on long-lived
            assets                                 -     (0.3)      -
           Gain from sale of assets, net        (2.7)    (0.4)      -
                                              ------- -------- -------
 Field operating income (loss)                 $(5.4)    $7.7   $(5.3)
                                              ------- -------- -------

(1) Q1 04, Q4 03 and Q1 03 include $12.4 million, $3.7 million and
    $4.6 million, respectively, of operating and maintenance expense
    that TODCO classifies as general and administrative expense.


    CONTACT: Transocean Inc.
             Analyst Contact:
             Jeffrey L. Chastain, 713-232-7551
             or
             Media Contact:
             Guy A. Cantwell, 713-232-7647

    SOURCE: Transocean Inc.