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Transocean Inc. Reports Second Quarter 2006 Results, Announces Repurchase of $800 Million of Shares

August 3, 2006

HOUSTON--(BUSINESS WIRE)--Aug. 3, 2006--Transocean Inc. (NYSE:RIG)today reported net income for the three months ended June 30, 2006 of$249.5 million, or $0.75 per diluted share, on revenues of $853.3million. The results compare to net income of $301.8 million, or $0.90per diluted share, on revenues of $727.4 million for the correspondingthree months in 2005. Net income for the three months ended June 30,2006 included after-tax gains totaling $110.7 million, or $0.33 perdiluted share, resulting from the sale of the semisubmersible rigTransocean Explorer, idle since January 1999, and the drilling bargeSearex XII. Net income for the corresponding three months in 2005included after-tax gains of $165.0 million, or $0.49 per dilutedshare, resulting from the sale of TODCO common stock and $9.1 million,or $0.03 per diluted share, resulting from the sale of two rigs.

For the six months ended June 30, 2006, net income totaled $455.2million, or $1.36 per diluted share, on revenues of $1,670.6 million,compared to net income of $393.6 million, or $1.18 per diluted share,on revenues of $1,357.9 million for the six months ended June 30,2005. Net income for the six months ended June 30, 2006 includedafter-tax gains totaling $153.6 million, or $0.46 per diluted share,resulting from the sale of the Transocean Explorer, Searex XII, thedrillship Peregrine III and a platform rig. Net income for thecorresponding six months in 2005 included the previously mentionedgain from the sale of TODCO common stock, after-tax gains of $27.9million, or $0.08 per share, resulting from the sale of three rigs anda loss of $6.7 million, or $0.02 per diluted share, resulting from theearly retirement of debt.

During the three months ended June 30, 2006, the companyrepurchased and retired $400 million of its ordinary shares, or 5.2million shares at an average price of $76.23 per share, pursuant tothe share repurchase program that was initially authorized by thecompany's Board of Directors in October 2005 at $2.0 billion andincreased in May 2006 to $4.0 billion. During July 2006, the companyrepurchased and retired an additional $400 million of its ordinaryshares, or 5.2 million shares at an average price of $77.00 per share.At July 31, 2006, the company had repurchased and retired a total of$1.4 billion of its ordinary shares, or 19.0 million shares at anaverage price of $73.54 per share, and still had authority torepurchase up to an additional $2.6 billion of its ordinary sharesunder the terms of the share repurchase program.

Robert L. Long, President and Chief Executive Officer ofTransocean Inc., stated, \"Financial results for the second quarter andfirst six months of 2006 were at levels consistent with our previousguidance. The growth in revenues reflects the excellent contractsignings seen over the past 18 months, partially offset by increasedfleet out-of-service time and higher operating and maintenanceexpenses, including the costs associated with three rig reactivations.The second half of 2006 is expected to see additional improvement infinancial results as revenues continue to grow. Operating revenues foreach of the third and fourth quarters of 2006 are expected to be atrecord levels with the fourth quarter exceeding $1.0 billion for thefirst time in the company's history, while operating and maintenanceexpenses for each of the third and fourth quarters of 2006 areexpected to approximate the level of expenses reported for the secondquarter of 2006. With strong demand for our fleet of mobile offshoredrilling rigs in both the domestic and international market sectors,the company's contract backlog has grown to approximately $19.4billion at July 31, 2006, up from approximately $10.9 billion atDecember 31, 2005.\"

Operations Quarterly Review

Revenues for the three months ended June 30, 2006 increased 4% to$853.3 million, compared to revenues of $817.3 million during thethree months ended March 31, 2006. The revenue improvement wasprimarily attributable to higher dayrates experienced throughout thefleet. The semisubmersible rig Transocean Marianas completed its firstfull quarter of operation since sustaining damage in September 2005during Hurricane Rita and the semisubmersible rig Jim Cunningham andjackup rig Trident IV experienced improved utilization in the secondquarter of 2006 following mobilizations to new regions during thefirst quarter of 2006. The improvement in revenues was partiallyoffset by planned out-of-service time on 13 rigs, and in the case ofthe drillship Deepwater Frontier, mobilization of the rig from Brazilto India ahead of the commencement of a multi-year contract. Theout-of-service time contributed to a slight decline in fleetutilization during the three months ended June 30, 2006 to 81% from82% during the first quarter of 2006. Over the same comparativeperiod, the average fleet dayrate improved 8% to an average of$129,000 from an average of $119,600, due chiefly to 12% and 7%improvements in average dayrates among the company'sHigh-Specification and Other Floaters fleets, respectively.

Operating income before general and administrative expensestotaled $312.6 million, and field operating income (defined asrevenues less operating and maintenance expenses) was $304.0 millionfor the three months ended June 30, 2006. The results compare tooperating income before general and administrative expenses and fieldoperating income of $304.8 million and $342.3 million, respectively,during the three months ended March 31, 2006. The decline in fieldoperating income was primarily attributable to an increase inoperating and maintenance expenses during the second quarter of 2006,which totaled $549.3 million compared to $475.0 million in the firstquarter of 2006. Approximately $20 million of the increase inoperating and maintenance expenses, compared to the first quarter of2006, related to the continuation of reactivation programs on thesemisubmersible rigs Transocean Prospect, Transocean Winner and C.K.Rhein, Jr. Another $45 million was associated with shipyard programson 13 rigs, as well as an increase in major maintenance projects on anumber of active rigs. A weak U.S. dollar and increases in the costfor rig supplies, personnel and insurance contributed further to thisincrease in operating and maintenance expenses in the second quarterof 2006.

Liquidity

Cash flow from operations totaled $443.8 million for the sixmonths ended June 30, 2006. Total debt at June 30, 2006 was $1,596.0million, effectively level with total debt reported at March 31, 2006.Although the company had not drawn against its $1.0 billion revolvingcredit facility at June 30, 2006, approximately $360 million was drawnagainst the facility at July 31, 2006, with the primary use of theproceeds to fund rig construction programs and the repurchase ofcompany ordinary shares.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m.Eastern DST on August 3, 2006. To participate, dial 913-981-5592 andrefer to confirmation code 5208498 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 August 3, 2006 and can be accessed bydialing 719-457-0820 and referring to the passcode 5208498. Also, areplay will be available through the Internet and can be accessed byvisiting either of the above-referenced Worldwide Web addresses.

Analyst Meeting

In addition, the senior management of Transocean will discuss thecompany's strategic focus and regional business outlook during ananalyst meeting in New York City on August 7, 2006. The meeting willbe held in the Trianon Ballroom of the Hilton New York beginning at9:00 a.m. Eastern DST. Those wishing to attend the meeting shouldnotify Leslie Milner at 713-232-7694 or lmilner@houston.deepwater.com.

Forward-Looking Disclaimer

Statements regarding financial results, operating revenues,operating and maintenance expenses, 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 supply of drilling rigs, including newbuilds,reactivations and the reallocation of current rigs, factors affectingthe duration of contracts including well-in-progress provisions, theactual amount of downtime, factors resulting in reduced applicabledayrates, hurricanes and other weather conditions, the future price ofoil and gas and other factors detailed in the company's most recentForm 10-K and other filings with the Securities and ExchangeCommission. Should one or more of these risks or uncertaintiesmaterialize, or should underlying assumptions prove incorrect, actualresults may vary materially from those indicated.

Transocean Inc. is the world's largest offshore drillingcontractor with a fleet of 87 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), 20Other Floaters, 25 Jackups and other assets utilized in the support ofoffshore drilling activities worldwide. With a current equity marketcapitalization in excess of $25 billion, Transocean Inc.'s ordinaryshares are traded on the New York Stock Exchange under the 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   Six Months Ended                                     June 30,            June 30,                               ------------------- -------------------                                 2006      2005      2006      2005                               --------- --------- --------- ---------Operating Revenues  Contract drilling revenues     $828.1    $682.1  $1,607.0  $1,282.7  Other revenues                   25.2      45.3      63.6      75.2----------------------------------------------------------------------                                  853.3     727.4   1,670.6   1,357.9----------------------------------------------------------------------Costs and Expenses  Operating and maintenance       549.3     437.0   1,024.3     825.3  Depreciation                    102.0     101.2     203.6     201.9  General and administrative       24.6      18.0      44.8      36.1----------------------------------------------------------------------                                  675.9     556.2   1,272.7   1,063.3----------------------------------------------------------------------Gain from disposal of assets, net                              110.6      13.6     174.7      33.5----------------------------------------------------------------------Operating Income                  288.0     184.8     572.6     328.1----------------------------------------------------------------------Other Income (Expense), net  Equity in earnings of   unconsolidated affiliates        3.4       3.4       2.9       6.5  Interest income                   5.3       4.8      10.5       8.8  Interest expense, net of   amounts capitalized            (20.4)    (29.8)    (44.3)    (62.9)  Gain from TODCO stock sales         -     165.0         -     165.0  Loss on retirement of debt          -         -         -      (6.7)  Other, net                       (0.9)     (3.0)     (0.2)     (4.1)----------------------------------------------------------------------                                  (12.6)    140.4     (31.1)    106.6----------------------------------------------------------------------Income Before Income Taxes and Minority Interest                275.4     325.2     541.5     434.7Income Tax Expense                 25.9      23.6      86.3      41.1Minority Interest                     -      (0.2)        -         -----------------------------------------------------------------------Net Income                       $249.5    $301.8    $455.2    $393.6======================================================================Earnings Per Share   Basic                          $0.77     $0.93     $1.40     $1.21   Diluted                        $0.75     $0.90     $1.36     $1.18======================================================================Weighted Average Shares Outstanding   Basic                          323.6     326.1     324.5     324.8----------------------------------------------------------------------   Diluted                        335.8     338.0     337.0     336.9----------------------------------------------------------------------                   TRANSOCEAN INC. AND SUBSIDIARIES                 CONDENSED CONSOLIDATED BALANCE SHEETS                   (In millions, except share data)                                              June 30,   December 31,                                                2006         2005                                             ------------ ------------                                             (Unaudited)                   ASSETSCash and Cash Equivalents                         $282.2       $445.4Accounts Receivable, net of allowance for doubtful accounts of $19.1 and $15.3 at June 30, 2006 and December 31, 2005, respectively                                      703.6        599.7Materials and Supplies, net of allowance for obsolescence of $16.1 and $19.1 at June 30, 2006 and December 31, 2005, respectively          164.2        156.2Deferred Income Taxes, net                          24.7         23.4Other Current Assets                                74.6         54.4----------------------------------------------------------------------   Total Current Assets                          1,249.3      1,279.1----------------------------------------------------------------------Property and Equipment                          10,018.5      9,791.0Less Accumulated Depreciation                    3,199.6      3,042.8----------------------------------------------------------------------   Property and Equipment, net                   6,818.9      6,748.2----------------------------------------------------------------------Goodwill                                         2,208.9      2,208.9Investments in and Advances to Unconsolidated Affiliates                          11.0          8.1Other Assets                                       266.9        212.9----------------------------------------------------------------------   Total Assets                                $10,555.0    $10,457.2======================================================================    LIABILITIES AND SHAREHOLDERS' EQUITYAccounts Payable                                  $337.4       $254.0Accrued Income Taxes                                18.9         27.5Debt Due Within One Year                            95.4        400.0Other Current Liabilities                          259.7        242.1----------------------------------------------------------------------   Total Current Liabilities                       711.4        923.6----------------------------------------------------------------------Long-Term Debt                                   1,500.6      1,197.1Deferred Income Taxes, net                         112.1         65.0Other Long-Term Liabilities                        323.5        286.2----------------------------------------------------------------------   Total Long-Term Liabilities                   1,936.2      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, 319,904,208 and 324,750,166 shares issued and outstanding at June 30, 2006 and December 31, 2005, respectively                              3.2          3.2Additional Paid-in Capital                      10,032.1     10,565.3Accumulated Other Comprehensive Loss               (20.5)       (20.4)Retained Deficit                                (2,111.2)    (2,566.4)----------------------------------------------------------------------   Total Shareholders' Equity                    7,903.6      7,981.7----------------------------------------------------------------------   Total Liabilities and Shareholders'    Equity                                     $10,555.0    $10,457.2======================================================================                   TRANSOCEAN INC. AND SUBSIDIARIES            CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                   (In millions, except share data)                               Three Months Ended   Six Months Ended                                     June 30,            June 30,                               ------------------- -------------------                                 2006      2005      2006      2005                               --------- --------- --------- ---------Cash Flows from Operating Activities   Net income                    $249.5    $301.8    $455.2    $393.6   Adjustments to reconcile    net income to net cash    provided by operating    activities     Depreciation                 102.0     101.2     203.6     201.9     Stock-based compensation      expense                       5.2       3.1       8.0       6.2     Deferred income taxes         (8.6)     (2.4)     25.4       2.2     Equity in earnings of      unconsolidated      affiliates                   (3.4)     (3.4)     (2.9)     (6.5)     Net gain from disposal of      assets                     (110.6)    (13.6)   (174.7)    (33.5)     Gain from TODCO stock      sales                           -    (165.0)        -    (165.0)     Loss on retirement of      debt                            -         -         -       6.7     Amortization of debt-      related      discounts/premiums, fair      value adjustments and      issue costs, net             (0.3)     (2.3)     (0.6)     (5.5)     Deferred income, net          10.8       2.1      20.0      12.1     Deferred expenses, net       (46.9)     10.3     (54.5)      9.1     Tax benefit from exercise      of stock options to      purchase and vesting of      ordinary shares under      stock-based compensation      plans                        (7.9)      5.7      (7.9)      4.9     Other, net                    16.7       4.9      25.0      13.7     Changes in operating      assets and liabilities       Accounts receivable        (32.7)    (79.6)   (103.9)   (119.6)       Accounts payable and        other current        liabilities                46.1      55.4      90.5      70.8       Income taxes        receivable/payable,        net                         5.9      12.2      11.6       7.1       Other current assets       (49.9)    (24.2)    (51.0)    (20.1)------------------------------ ---------------------------------------Net Cash Provided by Operating Activities                       175.9     206.2     443.8     378.1------------------------------ ---------------------------------------Cash Flows from Investing Activities  Capital expenditures            (98.0)    (78.4)   (275.6)   (109.6)  Proceeds from disposal of   assets, net                    121.3      25.0     203.0      58.0  Proceeds from TODCO stock   sales, net                         -     271.9         -     271.9  Joint ventures and other   investments, net                   -       1.4         -       4.5------------------------------ ---------------------------------------Net Cash Provided by (Used in) Investing Activities              23.3     219.9     (72.6)    224.8------------------------------ ---------------------------------------Cash Flows from Financing Activities  Repayments of debt                  -      (7.9)        -    (287.8)  Net proceeds from issuance   of ordinary shares under   stock-based compensation   plans                           21.6      87.0      66.1     159.4  Proceeds from issuance of   ordinary shares upon   exercise of warrants               -       4.6         -       4.6  Repurchase of ordinary   shares                        (400.1)        -    (600.1)        -  Decrease in cash dedicated   to debt service                    -      12.0         -      12.0  Other, net                       (0.4)        -      (0.4)      0.1------------------------------ ---------------------------------------Net Cash Provided by (Used in) Financing Activities            (378.9)     95.7    (534.4)   (111.7)------------------------------ ---------------------------------------Net Increase (Decrease) in Cash and Cash Equivalents       (179.7)    521.8    (163.2)    491.2------------------------------ ---------------------------------------Cash and Cash Equivalents at Beginning of Period              461.9     420.7     445.4     451.3------------------------------ ---------------------------------------Cash and Cash Equivalents at End of Period                   $282.2    $942.5    $282.2    $942.5============================== =======================================                            Transocean Inc.                      Fleet Operating Statistics                                             Operating Revenues                                               ($ Millions) (1)                                        ------------------------------                                              Three Months Ended                                        ------------------------------                                         June 30,  March 31, June 30,Transocean Drilling Segment:               2006      2006      2005                                        --------- ---------- ---------Contract Drilling Revenues    High-Specification Floaters:        Fifth-Generation Deepwater         Floaters                          $227.8    $225.6    $213.8        Other Deepwater Floaters           $193.8    $171.7    $145.7        Other High-Specification         Floaters                           $62.5     $51.0     $56.0    Total High-Specification Floaters      $484.1    $448.3    $415.5    Other Floaters                         $167.4    $166.0    $114.2    Jackups                                $155.1    $143.6    $128.3    Other Rigs                              $21.5     $21.0     $24.1Subtotal                                   $828.1    $778.9    $682.1Other Revenues           Client Reimbursable Revenues     $21.8     $24.7     $25.0           Integrated Services and Other     $3.4     $13.7     $20.3Subtotal                                    $25.2     $38.4     $45.3Total Company                              $853.3    $817.3    $727.4                                           Average Daily Revenue (1)                                        ------------------------------                                              Three Months Ended                                        ------------------------------                                         June 30,  March 31, June 30,Transocean Drilling Segment:               2006      2006      2005                                        --------- ---------- ---------    High-Specification Floaters:        Fifth-Generation Deepwater         Floaters                        $216,500  $209,000  $197,100        Other Deepwater Floaters         $190,200  $154,000  $132,700        Other High-Specification         Floaters                        $174,700  $158,800  $170,500    Total High-Specification Floaters    $199,300  $178,200  $165,500    Other Floaters                       $118,200  $110,000   $82,400    Jackups                               $73,000   $70,300   $58,200    Other Rigs                            $47,500   $47,300   $47,000Total Drilling Fleet                     $129,000  $119,600  $103,100                                                Utilization (1)                                        ------------------------------                                              Three Months Ended                                        ------------------------------                                         June 30,  March 31, June 30,Transocean Drilling Segment:               2006      2006      2005                                        --------- ---------- ---------    High-Specification Floaters:        Fifth-Generation Deepwater         Floaters                           89%       92%       92%        Other Deepwater Floaters            70%       83%       80%        Other High-Specification         Floaters                           98%       89%       90%    Total High-Specification Floaters       81%       87%       86%    Other Floaters                          74%       73%       63%    Jackups                                 93%       91%       94%    Other Rigs                              62%       58%       57%Total Drilling Fleet                        81%       82%       79%(1) Average daily revenue is defined as contract drilling revenue    earned per revenue earning day in the period. A revenue earning    day is defined as a day for which a rig earns dayrate after    commencement of operations. Utilization is defined as the total    actual number of revenue earning days in the period as a    percentage of the total number of calendar days in the period for    all drilling rigs in our fleet.                   Transocean Inc. and Subsidiaries            Non-GAAP Financial Measures and Reconciliations      Operating Income Before General and Administrative Expense                 to Field Operating Income by Segment                           (in US$ millions)                          Three Months Ended        Six Months Ended                    ------------------------------ -------------------                    June 30,  March 31,  June 30,  June 30,  June 30,                      2006       2006      2005      2006      2005                    --------- ---------- --------- --------- ---------Transocean Drilling Segment    Operating     revenue          $853.3     $817.3    $727.4  $1,670.6  $1,357.9    Operating and     maintenance     expense (1)       549.3      475.0     437.0   1,024.3     825.3    Depreciation       102.0      101.6     101.2     203.6     201.9    Gain from     disposal of     assets, net      (110.6)     (64.1)    (13.6)   (174.7)    (33.5)                    --------- ---------- --------- --------- ---------  Operating income   before general   and   administrative   expense             312.6      304.8     202.8     617.4     364.2  Add back   (subtract):     Depreciation      102.0      101.6     101.2     203.6     201.9     Gain from      disposal of      assets, net      (1)             (110.6)     (64.1)    (13.6)   (174.7)    (33.5)                    --------- ---------- --------- --------- ---------  Field   operating   income             $304.0     $342.3    $290.4    $646.3    $532.6                    --------- ---------- --------- --------- ---------(1) Loss on retirement for Q2 05 and YTD Q2 05 of $0.3 million and    $2.2 million, respectively, was reclassed out of operating and    maintenance expense and into gain from disposal of assets, net.                   Transocean Inc. and Subsidiaries                     Effective Tax Rate Analysis                          (in US$ millions)                          Three Months Ended        Six Months Ended                     ----------------------------- -------------------                     June 30,  March 31, June 30,       June 30,                       2006      2006      2005      2006      2005                     --------- --------- --------- --------- ---------Income (Loss) before Income Taxes and Minority Interest     $275.4    $266.1    $325.2    $541.5    $434.7  Add back   (subtract):    Loss on     retirement of     debt                   -         -         -         -       6.7    Gain on sale of     assets            (110.6)    (64.6)    (14.0)   (175.2)    (32.8)    Gain on TODCO     stock sales            -         -    (165.0)        -    (165.0)                     --------- --------- --------- --------- ---------Adjusted Income before Income Taxes and Minority Interest              $164.8    $201.5    $146.2    $366.3    $243.6Income Tax Expense      $25.9     $60.4     $23.6     $86.3     $41.1  Add back   (subtract):                                                      -    Gain on sale of     assets               0.1     (21.7)     (4.8)    (21.6)     (4.8)    Changes in     estimates (1)        3.4      (3.2)      7.8       0.2       5.6                     --------- --------- --------- --------- ---------Adjusted Income Tax Expense (2)            $29.4     $35.5     $26.6     $64.9     $41.9Tax Rate                  9.4%     22.7%      7.3%     15.9%      9.5%Effective Tax Rate       17.8%     17.6%     18.2%     17.7%     17.2%(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 June 30, 2005 include 1.4 million of    additional tax expense 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.