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Transocean Inc. Reports Improved First Quarter 2006 Results

May 4, 2006

HOUSTON--(BUSINESS WIRE)--May 4, 2006--Transocean Inc. (NYSE:RIG)today reported net income for the three months ended March 31, 2006 of$205.7 million, or $0.61 per diluted share, on revenues of $817.3million. The results compare to net income of $91.8 million, or $0.28per diluted share, on revenues of $630.5 million for the correspondingthree months in 2005. Net income for the three months ended March 31,2006 included after tax gains totaling $42.9 million, or $0.12 perdiluted share, resulting from the sale of a platform rig and thedrillship Peregrine III. The results for the corresponding threemonths in 2005 included an after tax gain of $18.8 million, or $0.06per diluted share, resulting from the sale of the semisubmersible rigSedco 600 and a loss of $6.7 million, or $0.02 per diluted share, dueto the early retirement of debt.

The company noted that the offshore drilling industry continues toexperience strong customer demand throughout most geographic regionsas reflected by high asset utilization and a further rise in dayratesamong most classes of offshore drilling rigs.

Within its fleet of 33 High-Specification Floaters, the companyhas had notable success in securing long-term contracts at attractivedayrates, contributing to an unprecedented level of visible activitytowards the end of the decade. At present, 22 of the company's 33High-Specification Floaters, in addition to a contract for thenewbuild rig Discoverer Clear Leader and a second Sedco 700 Seriessemisubmersible rig upgrade, are contracted into or beyond 2009 withthe High-Specification Floaters contributing an estimated $12 billiontoward the company's total contract backlog at May 1, 2006 ofapproximately $17 billion. Demand for deepwater rigs withavailability in the next 24 to 30 months continues to exceed supply,resulting in the delay of some drilling programs. In addition, anumber of operators continue to express interest in newbuild deepwaterrigs with anticipated delivery dates after 2008. At present, anestimated 3% of the company's High-Specification Floater fleetcontract days for the remainder of 2006 are uncommitted, whileapproximately 15% are uncommitted in 2007 and approximately 21% areuncommitted in 2008.

Customer demand for the company's fleet of Other Floaters(mid-water units) comprised of 21 semisubmersible rigs, is strongestin Asia, the U.S. Gulf of Mexico and the North Sea. The company isseeing dayrates that are decidedly higher than those seen at thebeginning of the year as evidenced by recent contract signings for thesemisubmersible rigs Sedco 703 at $400,000 per day and the TransoceanLegend at $435,000 per day. The company recently announced it hasbegun its third rig reactivation in the past 10 months following theaward of a two-year contract for the semisubmersible rig C. KirkRhein, Jr. at $340,000 per day, providing further evidence of theimproved state of the mid-water floater market sector. Presently, 11of the company's 21 Other Floaters are expected to conclude existingcontracts before the end of 2007 and then commence new contracts. Thecompany continues to evaluate contract opportunities that couldsupport the reactivation of the semisubmersible rig TransoceanWildcat. At present, an estimated 14% of the Other Floater fleetcontract days for the remainder of 2006 are uncommitted, whileapproximately 41% are uncommitted in 2007 and approximately 74% areuncommitted in 2008.

The company's 25-rig Jackup fleet is experiencing strong customerdemand in Asia and the Middle East, including multi-year contractopportunities available in India, Saudi Arabia, Qatar and Abu Dhabi.Dayrates for some standard jackup rigs have approached or exceeded$200,000 per day, as evidenced by recent contract signings for theTrident 9 at $189,500 per day and the Shelf Explorer at $212,200 perday. At present, approximately 3% of the company's Jackup fleet daysare uncommitted for the remainder of 2006, while approximately 18% areuncommitted in 2007 and approximately 59% are uncommitted in 2008.

The company anticipates continued revenue growth for each of theremaining quarters in 2006, with more prominent growth expected duringthe second half of the year, supported by improving fleet activity andhigher average dayrates. Revenue improvement during the second quarterof 2006 is expected to be more than offset by higher operating andmaintenance expenses, which the company expects to peak during thesecond quarter, resulting primarily from increased fleetout-of-service time. A total of 15 rigs in the company's fleet areexpected to be out-of-service for an estimated 670 days during thesecond quarter due to shipyard programs and mobilizations versusapproximately 350 out-of-service days in the first quarter. Also, thecompany's reactivation efforts have expanded to three units with therecent contract award for the semisubmersible rig C. Kirk Rhein, Jr.These shipyard, mobilization and reactivation activities are expectedto result in operating and maintenance costs that exceed the level ofcosts reported in the first quarter of 2006 by up to $75 million.Operating and maintenance expenses are expected to decline during thesecond half of 2006 as shipyard and reactivation activity decreases.However, the pace of decline could be slowed by the possibility of anadditional reactivation, labor and maintenance inflationary costpressures and the delay of second quarter shipyard programs to laterperiods, as the company experienced during the first quarter of 2006with two shipyard programs.

Operations Quarterly Review

Revenues for the three months ended March 31, 2006 of $817.3million were 6% higher than revenues reported for the final threemonths of 2005, which totaled $771.2 million. This increase inrevenues was the result of increased activity, especially among thecompany's Fifth-Generation and Other Deepwater Floaters, and higheraverage dayrates, partially offset by rig out-of-service time. Severalrigs returned to service during the first quarter of 2006 followingout-of-service periods in the final quarter of 2005, including thesemisubmersible rig Sedco Energy, drillship Peregrine I and jackup rigShelf Explorer. Also, the semisubmersible rig Transocean Marianasreturned to service during the final week of the first quarter of 2006following the repair of damage sustained during the 2005 hurricaneseason. The rig, which was in a shipyard for all of the final quarterin 2005, is expected to be out-of-service for 30 days in August 2006to complete an upgrade to its mooring system. Utilization of thecompany's fleet improved to 82% during the three months ended March31, 2006 from 78% during the final three months of 2005. The averagefleet dayrate increased to $119,600, up 6% from $113,300 during thefinal three months in 2005.

Operating income before general and administrative expensestotaled $304.8 million and field operating income (defined as revenuesless operating and maintenance expenses) was $342.3 million for thethree months ended March 31, 2006. Both measures of income increasedfrom $207.2 million and $314.2 million, respectively, for the threemonths ended December 31, 2005. Operating and maintenance expenses inthe first three months of 2006 increased 4% to $475 million from $457million during the final three months of 2005, due principally to rigreactivation programs associated with the semisubmersible rigsTransocean Prospect, Transocean Winner and C. Kirk Rhein, Jr. whichtotaled approximately $19 million, and an estimated $8 million ofexpenses required for repairs to the Transocean Marianas. During thefirst quarter of 2006, scheduled shipyard programs on thesemisubmersible rig Sedco 710 and the jackup rig J.T. Angel werepostponed. Also, hurricane-related expenses were lower than expected,which together with the postponement of shipyard projects and certainrig maintenance programs contributed to operating and maintenanceexpenses that were lower than originally anticipated by management.

Effective Tax Rate

The company's effective tax rate(2) for the three months endedMarch 31, 2006 was 17.6%, excluding the previously mentioned effectson income before tax related to the gains from the sale of a platformrig and the drillship Peregrine III and excluding various discrete taxitems. The actual effective tax rate of approximately 23% for thefirst quarter of 2006 reflects the tax impact of the rig sales as wellas the impact of discrete tax items related to changes in estimates.The impact of these items in the first quarter of 2006 was an increasein the tax provision of approximately $25 million. The companycurrently expects the effective tax rate for the remainder of 2006 tobe between 17% and 18%, excluding the previously mentioned effects onincome before tax related to the gains from rig sales and excludingvarious discrete tax items.

Share Buyback

During the three months ended March 31, 2006, the companyrepurchased $200 million of its ordinary shares, or 2,578,500 sharesat an average price of $77.54 per share, pursuant to the $2 billionshare repurchase program that was authorized by the company's Board ofDirectors in October 2005. At May 4, 2006, after all prior repurchasesunder the program, the company still had authority to repurchase up toan additional $1.4 billion of its ordinary shares under the originalterms of the share repurchase program.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m.Eastern DST on May 4, 2006. To participate, dial 913-981-4905 andrefer to confirmation code 9176664 approximately five to 10 minutesprior to the scheduled start time of the call.

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

A telephonic replay of the conference call should be availableafter 1:00 p.m. Eastern DST on May 4, 2006 and can be accessed bydialing 719-457-0820 and referring to the passcode 9176664. Also, areplay will be available through the Internet and can be accessed byvisiting either of the above-referenced Worldwide Web addresses.

Forward-Looking Disclaimer

Statements regarding market and business outlook, client contractterm interest, newbuild demand and opportunities, deepwater demand,contract backlog, committed fleet time, mooring system upgrades,duration of current demand cycle, rig demand, timing and impact ofshipyard and maintenance projects and reactivations, revenues, costs,timing of cost peaks, earnings, rig sales, out-of-service time,contract duration, contract opportunities, opportunities for thecompany, dayrates, effective tax rate, as well as any other statementsthat are not historical facts in this release, are forward-lookingstatements that involve certain risks, uncertainties and assumptions.These include but are not limited to operating hazards and delays,risks associated with international operations, future financialresults, actions by customers and other third parties, factorsaffecting the duration of contracts including well-in-progressprovisions, the actual amount of downtime, factors resulting inreduced applicable dayrates, hurricanes and other weather conditions,the future price of oil and gas and other factors detailed in thecompany's most recent Form 10-K and other filings with the Securitiesand Exchange Commission. Should one or more of these risks oruncertainties materialize, or should underlying assumptions proveincorrect, actual results may vary materially from those indicated.

Transocean Inc. is the world's largest offshore drillingcontractor with a fleet of 88 mobile offshore drilling units. Thecompany's mobile offshore drilling fleet, consisting of a large numberof high-specification deepwater and harsh environment drilling units,is considered one of the most modern and versatile in the world due toits emphasis on technically demanding segments of the offshoredrilling business. The company's fleet consists of 33High-Specification Floaters (semisubmersibles and drillships), 21Other Floaters, 25 Jackup Rigs and other assets utilized in thesupport of offshore drilling activities worldwide. With a currentequity market capitalization in excess of $27 billion, TransoceanInc.'s ordinary shares are traded on the New York Stock Exchange underthe symbol \"RIG.\"

(1) For a reconciliation of segment operating income beforegeneral and administrative expense to field operating income, see theaccompanying schedule titled Non-GAAP Financial Measures andReconciliations -- Operating Income Before General and AdministrativeExpense to Field Operating Income by Segment.

(2) References to effective tax rate are based on the EffectiveTax Rate as shown in the accompanying schedule titled Effective TaxRate Analysis.

                   TRANSOCEAN INC. AND SUBSIDIARIES            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                 (In millions, except per share data)                              (Unaudited)                                          Three Months Ended March 31,                                          ----------------------------                                              2006           2005                                          -------------  -------------Operating Revenues  Contract drilling revenues                    $778.9         $600.6  Other revenues                                  38.4           29.9----------------------------------------------------------------------                                                 817.3          630.5----------------------------------------------------------------------Costs and Expenses  Operating and maintenance                      475.0          388.3  Depreciation                                   101.6          100.7  General and administrative                      20.2           18.1----------------------------------------------------------------------                                                 596.8          507.1----------------------------------------------------------------------Gain from disposal of assets, net                 64.1           19.9----------------------------------------------------------------------Operating Income                                 284.6          143.3----------------------------------------------------------------------Other Income (Expense), net  Equity in earnings (losses) of   unconsolidated affiliates                      (0.5)           3.1  Interest income                                  5.2            4.0  Interest expense, net of amounts   capitalized                                   (23.9)         (33.1)  Loss on retirement of debt                         -           (6.7)  Other, net                                       0.7           (1.1)----------------------------------------------------------------------                                                 (18.5)         (33.8)----------------------------------------------------------------------Income Before Income Taxes and Minority Interest                                        266.1          109.5Income Tax Expense                                60.4           17.5Minority Interest                                    -            0.2----------------------------------------------------------------------Net Income                                      $205.7          $91.8======================================================================Earnings Per Share   Basic                                         $0.63          $0.28   Diluted                                       $0.61          $0.28======================================================================Weighted Average Shares Outstanding   Basic                                         325.4          323.6----------------------------------------------------------------------   Diluted                                       337.3          331.0----------------------------------------------------------------------                   TRANSOCEAN INC. AND SUBSIDIARIES                 CONDENSED CONSOLIDATED BALANCE SHEETS                   (In millions, except share data)                                              March 31,   December 31,                                                2006         2005                                             ------------ ------------                                             (Unaudited)                                ASSETSCash and Cash Equivalents                         $461.9       $445.4Accounts Receivable, net of allowance for doubtful accounts of $18.0 and $15.3 at March 31, 2006 and December 31, 2005, respectively                                      670.9        599.7Materials and Supplies, net of allowance for obsolescence of $16.6 and $19.1 at March 31, 2006 and December 31, 2005, respectively                                      160.3        156.2Deferred Income Taxes, net                          23.4         23.4Other Current Assets                                37.1         54.4----------------------------------------------------------------------   Total Current Assets                          1,353.6      1,279.1----------------------------------------------------------------------Property and Equipment                           9,911.5      9,791.0Less Accumulated Depreciation                    3,110.7      3,042.8----------------------------------------------------------------------   Property and Equipment, net                   6,800.8      6,748.2----------------------------------------------------------------------Goodwill                                         2,208.9      2,208.9Investments in and Advances to Unconsolidated Affiliates                           7.6          8.1Other Assets                                       218.8        212.9----------------------------------------------------------------------   Total Assets                                $10,589.7    $10,457.2======================================================================                 LIABILITIES AND SHAREHOLDERS' EQUITYAccounts Payable                                  $264.9       $254.0Accrued Income Taxes                                29.8         27.5Debt Due Within One Year                           400.0        400.0Other Current Liabilities                          251.3        242.1----------------------------------------------------------------------   Total Current Liabilities                       946.0        923.6======================================================================Long-Term Debt                                   1,196.6      1,197.1Deferred Income Taxes, net                          98.9         65.0Other Long-Term Liabilities                        309.8        286.2----------------------------------------------------------------------   Total Long-Term Liabilities                   1,605.3      1,548.3======================================================================Commitments and ContingenciesMinority Interest                                    3.8          3.6Preference 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, 324,067,074 and 324,750,166 shares issued and outstanding at March 31, 2006 and December 31, 2005, respectively                              3.2          3.2Additional Paid-in Capital                      10,412.5     10,565.3Accumulated Other Comprehensive Loss               (20.4)       (20.4)Retained Deficit                                (2,360.7)    (2,566.4)----------------------------------------------------------------------   Total Shareholders' Equity                    8,034.6      7,981.7----------------------------------------------------------------------   Total Liabilities and Shareholders'    Equity                                     $10,589.7    $10,457.2======================================================================                   TRANSOCEAN INC. AND SUBSIDIARIES            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                             (In millions)                              (Unaudited)                                          Three Months Ended March 31,                                          ----------------------------                                              2006           2005                                          -------------  -------------Cash Flows from Operating Activities  Net income                                    $205.7          $91.8  Adjustments to reconcile net income to   net cash provided by operating   activities    Depreciation                                 101.6          100.7    Stock-based compensation expense               2.8            3.1    Deferred income taxes                         34.0            4.6    Equity in (earnings) losses of     unconsolidated affiliates                     0.5           (3.1)    Net gain from disposal of assets             (64.1)         (19.9)    Loss on retirement of debt                       -            6.7    Amortization of debt-related     discounts/premiums, fair value     adjustments and issue costs, net             (0.3)          (3.2)    Deferred income, net                           9.2           10.0    Deferred expenses, net                        (7.6)          (1.2)    Tax benefit from exercise of stock     options to purchase and vesting of     ordinary shares under stock-based     compensation plans                              -           (0.8)    Other, net                                     8.3            8.8    Changes in operating assets and     liabilities       Accounts receivable                       (71.2)         (40.0)       Accounts payable and other current        liabilities                               44.4           15.4       Income taxes receivable/payable,        net                                        5.7           (5.1)       Other current assets                       (1.1)           4.1----------------------------------------------------------------------Net Cash Provided by Operating Activities        267.9          171.9----------------------------------------------------------------------Cash Flows from Investing Activities  Capital expenditures                          (177.6)         (31.2)  Proceeds from disposal of assets, net           81.7           33.0  Joint ventures and other investments,   net                                               -            3.1----------------------------------------------------------------------Net Cash Provided by (Used in) Investing Activities                                      (95.9)           4.9----------------------------------------------------------------------Cash Flows from Financing Activities  Repayments on debt                                 -         (279.9)  Net proceeds from issuance of ordinary   shares under stock-based compensation   plans                                          44.5           72.4  Repurchase of ordinary shares                 (200.0)             -  Other, net                                         -            0.1----------------------------------------------------------------------Net Cash Used in Financing Activities           (155.5)        (207.4)----------------------------------------------------------------------Net Increase (Decrease) in Cash and Cash Equivalents                                      16.5          (30.6)----------------------------------------------------------------------Cash and Cash Equivalents at Beginning of Period                                          445.4          451.3----------------------------------------------------------------------Cash and Cash Equivalents at End of Period                                         $461.9         $420.7======================================================================                            Transocean Inc.                      Fleet Operating Statistics                                 Operating Revenues ($ Millions) (1)                                --------------------------------------                                          Three Months Ended                                --------------------------------------                                 March 31,   December 31,  March 31,Transocean Drilling Segment:        2006         2005         2005                                ------------ ------------ ------------Contract Drilling Revenues  High-Specification Floaters:     Fifth-Generation Deepwater      Floaters                       $225.6       $221.4       $192.3     Other Deepwater Floaters        $171.7       $150.4       $125.3     Other High-Specification      Floaters                        $51.0        $59.5        $50.2  Total High-Specification   Floaters                          $448.3       $431.3       $367.8  Other Floaters                     $166.0       $153.4        $88.2  Jackups                            $143.6       $132.9       $126.4  Other Rigs                          $21.0        $21.2        $18.2Subtotal                             $778.9       $738.8       $600.6Other Revenues  Client Reimbursable Revenues        $24.7        $21.1        $18.9  Integrated Services and Other       $13.7        $11.3        $11.0Subtotal                              $38.4        $32.4        $29.9Total Company                        $817.3       $771.2       $630.5                                      Average Daily Revenue (1)                                --------------------------------------                                          Three Months Ended                                --------------------------------------                                 March 31,   December 31,  March 31,Transocean Drilling Segment:        2006         2005         2005                                ------------ ------------ ------------  High-Specification Floaters:     Fifth-Generation Deepwater      Floaters                     $209,000     $215,800     $182,300     Other Deepwater Floaters      $154,000     $138,800     $124,500     Other High-Specification      Floaters                     $158,800     $161,700     $153,000  Total High-Specification   Floaters                        $178,200     $174,100     $153,900  Other Floaters                   $110,000      $98,500      $71,200  Jackups                           $70,300      $64,900      $57,600  Other Rigs                        $47,300      $48,500      $45,800Total Drilling Fleet               $119,600     $113,300      $96,600                                           Utilization (1)                                --------------------------------------                                          Three Months Ended                                --------------------------------------                                 March 31,   December 31,  March 31,Transocean Drilling Segment:        2006         2005         2005                                ------------ ------------ ------------  High-Specification Floaters:     Fifth-Generation Deepwater      Floaters                           92%          86%          90%     Other Deepwater Floaters            83%          79%          75%     Other High-Specification      Floaters                           89%         100%          91%  Total High-Specification   Floaters                              87%          84%          83%  Other Floaters                         73%          71%          57%  Jackups                                91%          89%          94%  Other Rigs                             58%          49%          44%Total Drilling Fleet                     82%          78%          75%(1) Average daily revenue is defined as contract drilling revenue    earned per revenue earning day in the period. A revenue earning    day is defined as a day for which a rig earns dayrate after    commencement of operations. Utilization is defined as the total    actual number of revenue earning days in the period as a    percentage of the total number of calendar days in the period for    all drilling rigs in our fleet.                   Transocean Inc. and Subsidiaries           Non-GAAP Financial Measures and Reconciliations      Operating Income Before General and Administrative Expense                 to Field Operating Income by Segment                          (in US$ millions)                                              Three Months Ended                                         -----------------------------                                          March    December   March                                            31,       31,       31,                                           2006      2005      2005                                         --------- --------- ---------Transocean Drilling Segment  Operating revenue                        $817.3    $771.2    $630.5  Operating and maintenance expense (1)     475.0     457.0     388.3  Depreciation                              101.6     101.8     100.7  (Gain) loss from disposal of assets,   net                                      (64.1)      5.2     (19.9)                                         --------- --------- ---------Operating income before general and administrative expense                     304.8     207.2     161.4Add back (subtract): Depreciation           101.6     101.8     100.7                     (Gain) loss from                      disposal of                      assets, net (1)       (64.1)      5.2     (19.9)                                         --------- --------- ---------Field operating income                     $342.3    $314.2    $242.2                                         --------- --------- ---------(1) Loss on retirement for Q1 05 and Q4 05 of $0.3 million and $6.7    million, respectively, was reclassed out of operating and    maintenance expense and into gain (loss) from disposal of assets,    net for each period presented.                   Transocean Inc. and Subsidiaries                     Effective Tax Rate Analysis                          (in US$ millions)                                                Three Months Ended                                            --------------------------                                             March   December  March                                               31,      31,      31,                                              2006     2005     2005                                            -------- -------- --------Income (Loss) before Income Taxes and Minority Interest                           $266.1   $172.6   $109.5  Add back (subtract):    Loss on retirement of debt                    -        -      6.7    Gain on sale of assets                    (64.6)       -    (18.8)    Income from TODCO tax sharing agreement       -     (1.3)       -                                            -------- -------- --------Adjusted Income before Income Taxes and Minority Interest                           $201.5   $171.3    $97.4Income Tax Expense                            $60.4    $21.0    $17.5  Add back (subtract):    Gain on sale of assets                    (21.7)       -        -    Changes in estimates (1)                   (3.2)     4.8     (2.2)                                            -------- -------- --------Adjusted Income Tax Expense (2)               $35.5    $25.8    $15.3Tax Rate                                       22.7%    12.2%    16.0%Effective Tax Rate                             17.6%    15.1%    15.7%(1) Our estimates change as we file tax returns, settle disputes with    tax authorities or become aware of other events and include    changes in deferred taxes, valuation allowances on deferred taxes    and other tax liabilities.(2) The three months ended December 31, 2005 includes $(3.0) million    of additional tax expense (benefit) reflecting the catch-up effect    of an increase in the annual effective tax rate.
    CONTACT: Transocean Inc., Houston             Analyst Contact:             Jeffrey L. Chastain, 713-232-7551             or             Media Contact:             Guy A. Cantwell, 713-232-7647    SOURCE: Transocean Inc.