Transocean Inc. Announces Increase of Share Repurchase Authorization from $2.0 Billion to $4.0 Billion
HOUSTON--(BUSINESS WIRE)--May 12, 2006--Transocean Inc. (NYSE:RIG) today announced that the company's Board of Directors has authorized an increase in the amount of ordinary shares which may be repurchased pursuant to the company's share repurchase program from $2.0 billion, which was previously authorized and announced on October 17, 2005, to $4.0 billion. As of today, the company has repurchased $600 million, or 8,593,251 of its ordinary shares under the share repurchase program. While the share repurchase program does not have an established expiration date and may be suspended or discontinued at any time, the company expects to repurchase approximately $3.6 billion of ordinary shares by the end of 2007, inclusive of the $600 million repurchased to date, subject to requirements generated by its success in signing additional newbuild contracts. The ordinary shares may be repurchased from time to time in open market or private transactions. The company's decisions as to when and how many shares to repurchase and the method and funding of such repurchases are based upon the company's ongoing capital requirements, regulatory considerations, cash flow generation and other factors. The company plans to continue to fund the repurchase program from current and future cash balances, but may also access its revolving credit facility to fund share repurchases. Transocean Inc. currently has approximately 325 million ordinary shares outstanding.
Also, the company reported that its Board of Directors has authorized an expansion of Transocean's revolving credit facility to $1 billion from the previous amount of $500 million.
Robert L. Long, President and Chief Executive Officer of Transocean Inc., commented, "Our decision to increase the company's share repurchase program to $4.0 billion reflects the substantial increase in the company's contract backlog, which currently totals an estimated $17 billion compared to approximately $8 billion in October 2005 and takes into consideration the improved outlook for reinvestment opportunities. To date, we have signed contracts for the construction of an enhanced Enterprise-class deepwater drillship and two significant upgrades of our Sedco 700-series semisubmersible rigs totaling in excess of $1.2 billion in capital investment. In addition, we remain encouraged by the prospects for further deepwater construction programs expected to be awarded in the near future and are hopeful that the company may secure at least one additional newbuild opportunity in the coming months. We believe the size and timing of the revised repurchase program allows the company to maintain the financial flexibility necessary to capture these potential growth opportunities."
Statements regarding new rig construction opportunities, the share repurchase program, including timing, duration and form of transaction, the factors to be considered, source of funding, termination of the program, as well as any other statements that are not historical facts, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to the factors stated in the preceding paragraph, operating hazards and delays, actions by customers and other third parties, the future price of oil and gas, the actual revenues earned and other factors detailed in the company's most recent Form 10-K and other filings with the Securities and Exchange Commission (SEC), which are available free of charge on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. There can be no assurance as to the number of shares, if any, that will be repurchased under the program.
Transocean Inc. is the world's largest offshore drilling contractor with a fleet of 88 mobile offshore drilling units. The company's mobile offshore drilling fleet, consisting of a large number of high-specification deepwater and harsh environment drilling units, 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. The company's fleet consists of 33 High-Specification Floaters (semisubmersibles and drillships), 21 Other Floaters, 25 Jackups and other assets utilized in the support of offshore drilling activities worldwide. With a current equity market capitalization in excess of $28 billion, Transocean Inc.'s ordinary shares are traded on the New York Stock Exchange under the symbol "RIG."
CONTACT: Transocean Inc., Houston Analyst Contact: Jeffrey L. Chastain, 713-232-7551 or Media Contact: Guy A. Cantwell, 713-232-7647 SOURCE: Transocean Inc.