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Transocean Inc. Reports Strong Growth in Third Quarter 2006 Revenue and Net Income; Announces Repurchase of $2.0 Billion of Shares

November 2, 2006

HOUSTON--(BUSINESS WIRE)--Nov. 2, 2006--Transocean Inc. (NYSE:RIG)today reported net income for the three months ended September 30,2006 of $309.0 million, or $0.96 per diluted share, on recordquarterly revenues of $1,025.7 million. The results compare to netincome of $170.4 million, or $0.50 per diluted share, on revenues of$762.6 million for the corresponding three months in 2005. Net incomefor the three months ended September 30, 2006 included after-tax gainsof $40.8 million, or $0.13 per diluted share, resulting primarily fromthe sale of two tender-assist drilling rigs, the W.D. Kent and theSearex X.

For the nine months ended September 30, 2006, net income was$764.2 million, or $2.31 per diluted share, on revenues of $2,696.3million, compared to net income for the nine months ended September30, 2005 of $564.0 million, or $1.68 per diluted share, on revenues of$2,120.5 million. Net income for the nine months ended September 30,2006 included after-tax gains totaling $194.4 million, or $0.58 perdiluted share, resulting from the sale of non-strategic assets,including the two above-mentioned rigs. Net income for the nine monthsended September 30, 2005 included a gain of $165.0 million, or $0.49per diluted share, resulting from the sale of TODCO common stock,after-tax gains of $27.9 million, or $0.08 per diluted share,resulting from the sale of three rigs, and a loss of $6.7 million, or$0.02 per diluted share, resulting from the early retirement of debt.

During the three months ended September 30, 2006, the companyrepurchased $1.75 billion of its ordinary shares, or 24.4 millionshares, at an average price of $71.67 per share, pursuant to the sharerepurchase program that was initially authorized by its Board ofDirectors in October 2005 at $2.0 billion and increased in May 2006 to$4.0 billion. During October 2006, the company repurchased anadditional $250.0 million of its ordinary shares under the program, or3.5 million shares, at an average price of $71.79 per share. AtOctober 31, 2006, the company had repurchased a total of $3.0 billionof its ordinary shares under the program, or 41.7 million shares, atan average price of $71.87 per share and still had the authority torepurchase up to an additional $1.0 billion of its ordinary sharesunder the terms of the share repurchase program. Ordinary sharesissued and outstanding at October 27, 2006 were approximately 292.4million.

Robert L. Long, Chief Executive Officer of Transocean Inc.,stated, \"The company achieved record quarterly revenues andnear-record quarterly net income, after adjusting for gains resultingfrom asset sales, during the third quarter of 2006. Revenue growthfrom the second quarter of 2006 was due primarily to higher averagedayrates and improved utilization on a number of rigs. Operating costsfor the quarter were below the high end of our expectations due inpart to the postponement of rig maintenance and shipyard programsuntil the final quarter of the year. Although the postponement ofshipyards may cause operating and maintenance costs in the fourthquarter to exceed our previous guidance of $515 million to $535million, aggregate costs for the second half of 2006 are expected tobe within our previously stated expectations.

\"As we near the completion of 2006 and look to 2007, the company'srecord contract backlog, which has grown to an estimated $20.2 billionat October 31, 2006, should support prospects for further quarterlyfinancial improvement. We remain optimistic regarding the prospectsfor our business, as rig demand continues to outpace supply,especially in the deepwater sector. New rig construction opportunitieswith multi-year contract durations support our belief that thedeepwater sector should remain strong well into the future.\"

Operations Quarterly Review

Revenues for the three months ended September 30, 2006 increased20% to $1,025.7 million compared to revenues of $853.3 million duringthe three months ended June 30, 2006. The revenue increase was dueprimarily to an improvement in average daily revenue, which rose 14%to $146,900 from $129,000 over the same comparative period. Thisimprovement was consistent across the company's fleet as several rigscommenced new contracts with dayrates that reflect the strong businessenvironment prevalent since mid-2004. In addition, third quarter 2006revenues were enhanced by reduced out-of-service time, as rigs likethe drillship Deepwater Frontier and semisubmersible rig TransoceanRichardson, both down for much of the second quarter of 2006,experienced higher utilization following the completion of maintenanceprograms and, in the case of the Deepwater Frontier, a mobilizationfrom Brazil to India. Finally, increased activity was seen during thethird quarter of 2006 as the semisubmersible rigs Transocean Winnerand Transocean Prospect commenced contracts following lengthyreactivation programs. The return to active service of these tworeactivated rigs helped to drive the average third quarter 2006 fleetutilization to 87%, up from 81% during the second quarter of 2006.

For the three months ended September 30, 2006, operating incomebefore general and administrative expenses totaled $413.2 million, a32% improvement from $312.6 million reported during the second quarterof 2006. Field operating income (defined as revenues less operatingand maintenance expenses) improved 53% to $464.8 million compared to$304.0 million over the same comparative period. The improved thirdquarter 2006 results were due chiefly to the strong revenue growth,partially offset by a 2% increase in operating and maintenanceexpenses, which totaled $560.9 million during the third quarter of2006 compared to $549.3 million during the previous quarter in 2006.The increase in operating and maintenance expenses was due primarilyto higher rig activity following the return of the Transocean Winnerand Transocean Prospect to active status and fewer shipyard programsand mobilizations. Third quarter 2006 operating and maintenanceexpenses included $31.4 million pertaining to the reactivation of theWinner, Prospect and C.K. Rhein, Jr., compared to $39.2 million in thesecond quarter of 2006. Completion of the C.K. Rhein, Jr. reactivationproject is expected during January 2007, while the commencement of atwo-year contract is expected in February 2007 following mobilizationof the rig to India.

Liquidity

Cash flow from operations increased to $732.2 million for the ninemonths ended September 30, 2006. The company reported an increase intotal debt of approximately $1.9 billion, to $3,495.4 million atSeptember 30, 2006 compared to total debt at June 30, 2006 of $1,596.0million, resulting from the issuance in September 2006 of $1.0 billionprincipal amount of two-year floating rate notes and $900 milliondrawn on an up to $1.0 billion multi-draw term credit facility. DuringOctober 2006, the company drew a final $100 million available on theterm credit facility. Net proceeds from the debt issuance were used tocompletely repay $640 million of the outstanding borrowings under thecompany's existing $1.0 billion, five-year revolving credit facilityand the repurchase of company ordinary shares.

Conference Call Information

Transocean will conduct a teleconference call at 10:00 a.m.Eastern on November 2, 2006. To participate, dial 913-981-5591 andrefer to confirmation code 4658614 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/Presentations.\" A file containing four charts tobe discussed during the conference call, titled \"3Q06 Charts,\" hasbeen posted to the company's website and can also be found byselecting \"Investor Relations/Presentations.\" The conference call mayalso be accessed via the Internet at www.CompanyBoardroom.com bytyping in the company's New York Stock Exchange trading symbol, \"RIG.\"

A telephonic replay of the conference call should be availableafter 1:00 p.m. Eastern on November 2, 2006 and can be accessed bydialing 719-457-0820 and referring to the passcode 4658614. 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 financial results, operating revenues,operating and maintenance expenses, prospects for our business, newrig opportunities, as well as any other statements that are nothistorical facts in this release, are forward-looking statements thatinvolve certain risks, uncertainties and assumptions. These includebut are not limited to operating hazards and delays, risks associatedwith international operations, future financial results, actions bycustomers and other third parties, factors affecting the supply anddemand of drilling rigs, including newbuilds, reactivations and thereallocation of current rigs, factors affecting the duration ofcontracts including well-in-progress provisions, the actual amount ofdowntime, factors resulting in reduced applicable dayrates, hurricanesand other weather conditions, the future price of oil and gas andother factors detailed in the company's most recent Form 10-K andother filings with the Securities and Exchange Commission. Should oneor more of these risks or uncertainties materialize, or shouldunderlying assumptions prove incorrect, actual results may varymaterially from those indicated.

Transocean Inc. is the world's largest offshore drillingcontractor with a fleet of 82 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 $20 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.

                   TRANSOCEAN INC. AND SUBSIDIARIES           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                 (In millions, except per share data)                             (Unaudited)                               Three Months Ended   Nine Months Ended                                  September 30,       September 30,                               ------------------- -------------------                                 2006      2005      2006      2005                               --------- --------- --------- ---------Operating Revenues  Contract drilling revenues     $991.3    $735.6  $2,598.3  $2,018.3  Other revenues                   34.4      27.0      98.0     102.2----------------------------------------------------------------------                                1,025.7     762.6   2,696.3   2,120.5----------------------------------------------------------------------Costs and Expenses  Operating and maintenance       560.9     438.3   1,585.2   1,263.6  Depreciation                     99.2     102.1     302.8     304.0  General and administrative       22.5      19.4      67.3      55.5----------------------------------------------------------------------                                  682.6     559.8   1,955.3   1,623.1----------------------------------------------------------------------Gain from disposal of assets, net                               47.6       0.7     222.3      34.2----------------------------------------------------------------------Operating Income                  390.7     203.5     963.3     531.6----------------------------------------------------------------------Other Income (Expense), net  Equity in earnings of   unconsolidated affiliates        4.6       1.8       7.5       8.3  Interest income                   3.3       5.2      13.8      14.0  Interest expense, net of   amounts capitalized            (27.2)    (24.5)    (71.5)    (87.4)  Gain from TODCO stock sales         -         -         -     165.0  Loss on retirement of debt          -      (0.6)        -      (7.3)  Other, net                        1.4       9.7       1.2       5.6----------------------------------------------------------------------                                  (17.9)     (8.4)    (49.0)     98.2----------------------------------------------------------------------Income Before Income Taxes and Minority Interest                372.8     195.1     914.3     629.8Income Tax Expense                 63.8      24.7     150.1      65.8Minority Interest                     -         -         -         -----------------------------------------------------------------------Net Income                       $309.0    $170.4    $764.2    $564.0======================================================================Earnings Per Share   Basic                          $0.99     $0.52     $2.39     $1.73   Diluted                        $0.96     $0.50     $2.31     $1.68======================================================================Weighted Average Shares Outstanding   Basic                          312.0     328.9     320.3     326.2----------------------------------------------------------------------   Diluted                        323.4     340.8     332.3     338.5----------------------------------------------------------------------
                   TRANSOCEAN INC. AND SUBSIDIARIES                CONDENSED CONSOLIDATED BALANCE SHEETS                   (In millions, except share data)                                           September 30, December 31,                                               2006          2005                                           ------------- -------------                                            (Unaudited)                  ASSETSCash and Cash Equivalents                        $407.1        $445.4 Accounts Receivable, net of allowance for  doubtful accounts of $34.8 and $15.3 at  September 30, 2006 and December 31,  2005, respectively                              872.2         599.7 Materials and Supplies, net of allowance  for obsolescence of $16.2 and $19.1 at  September 30, 2006 and December 31,  2005, respectively                              161.0         156.2Deferred Income Taxes, net                         27.0          23.4Other Current Assets                               79.4          54.4----------------------------------------------------------------------    Total Current Assets                        1,546.7       1,279.1----------------------------------------------------------------------Property and Equipment                         10,270.9       9,791.0Less Accumulated Depreciation                   3,138.0       3,042.8----------------------------------------------------------------------    Property and Equipment, net                 7,132.9       6,748.2----------------------------------------------------------------------Goodwill                                        2,209.0       2,208.9 Investments in and Advances to  Unconsolidated Affiliates                        11.6           8.1Other Assets                                      278.1         212.9----------------------------------------------------------------------    Total Assets                              $11,178.3     $10,457.2======================================================================   LIABILITIES AND SHAREHOLDERS' EQUITYAccounts Payable                                 $351.2        $254.0Accrued Income Taxes                               45.1          27.5Debt Due Within One Year                           95.4         400.0Other Current Liabilities                         379.6         242.1----------------------------------------------------------------------    Total Current Liabilities                     871.3         923.6----------------------------------------------------------------------Long-Term Debt                                  3,400.0       1,197.1Deferred Income Taxes, net                        104.5          65.0Other Long-Term Liabilities                       332.6         286.2----------------------------------------------------------------------    Total Long-Term Liabilities                 3,837.1       1,548.3----------------------------------------------------------------------Commitments and ContingenciesMinority Interest                                   3.8           3.6 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,  295,871,463 and 324,750,166 shares  issued and outstanding at September 30,  2006 and December 31, 2005, respectively          3.0           3.2Additional Paid-in Capital                      8,285.9      10,565.3Accumulated Other Comprehensive Loss              (20.6)        (20.4)Retained Deficit                               (1,802.2)     (2,566.4)----------------------------------------------------------------------    Total Shareholders' Equity                  6,466.1       7,981.7----------------------------------------------------------------------    Total Liabilities and Shareholders'     Equity                                   $11,178.3     $10,457.2======================================================================
                   TRANSOCEAN INC. AND SUBSIDIARIES                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                            (In millions)                             (Unaudited)                              Three Months Ended   Nine Months Ended                                 September 30,       September 30,                              ------------------- -------------------                                2006      2005      2006      2005                              --------- --------- --------- ---------Cash Flows from Operating Activities  Net income                    $309.0    $170.4    $764.2    $564.0  Adjustments to reconcile net   income to net cash provided   by operating activities    Depreciation                  99.3     102.1     302.8     304.0    Stock-based compensation     expense                       4.8       6.2      12.8      12.1    Deferred income taxes         (7.1)     (8.8)     18.3      (6.6)    Equity in earnings of     unconsolidated affiliates    (4.6)     (1.8)     (7.5)     (8.3)    Net gain from disposal of     assets                      (47.6)     (0.7)   (222.3)    (34.2)    Gain from TODCO stock     sales                           -         -         -    (165.0)    Loss on retirement of debt       -       0.6         -       7.3    Amortization of debt-     related     discounts/premiums, fair     value adjustments and     issue costs, net             (0.1)     (0.8)     (0.7)     (6.3)    Deferred income, net          11.5     (22.0)     31.5      (9.9)    Deferred expenses, net       (40.2)     18.0     (94.7)     27.1    Tax benefit from exercise     of stock options to     purchase and vesting of     ordinary shares under     stock-based compensation     plans                        (2.0)     15.2      (9.9)     20.1    Other long-term     liabilities                  (4.0)      5.5      16.7      18.0    Other, net                     0.2     (15.6)      4.5     (14.4)    Changes in operating     assets and liabilities       Accounts receivable      (168.7)    (27.1)   (272.5)   (146.7)       Accounts payable and        other current        liabilities               76.0      14.5     166.5      85.6       Income taxes        receivable/payable,        net                       47.3     (20.1)     58.9     (13.0)       Other current assets       14.6       2.0     (36.4)    (18.1)--------------------------------------------------------------------- Net Cash Provided by  Operating Activities           288.4     237.6     732.2     615.7--------------------------------------------------------------------- Cash Flows from Investing  Activities  Capital expenditures          (434.2)    (35.3)   (709.8)   (144.9)  Proceeds from disposal of   assets, net                    94.7       2.3     297.7      60.3  Proceeds from TODCO stock   sales, net                        -         -         -     271.9  Joint ventures and other   investments, net                0.5         -       0.5       4.5--------------------------------------------------------------------- Net Cash Provided by (Used  in) Investing Activities      (339.0)    (33.0)   (411.6)    191.8--------------------------------------------------------------------- Cash Flows from Financing  Activities  Net proceeds from issuance   of debt and borrowings   under credit facilities     1,900.0         -   1,900.0         -  Repayments of debt                 -    (592.4)        -    (880.2)  Net proceeds from issuance   of ordinary shares under   stock-based compensation   plans                           0.7      36.7      66.8     196.1  Proceeds from issuance of   ordinary shares upon   exercise of warrants              -       6.0         -      10.6  Repurchase of ordinary   shares                     (1,750.4)        -  (2,350.5)        -  Release of escrow funds -   Nautilus lease financing       29.6         -      29.6         -  Decrease in cash dedicated   to debt service                   -         -         -      12.0  Other, net                      (4.4)     (0.6)     (4.8)     (0.5)--------------------------------------------------------------------- Net Cash Provided by (Used  in) Financing Activities       175.5    (550.3)   (358.9)   (662.0)--------------------------------------------------------------------- Net Increase (Decrease) in  Cash and Cash Equivalents      124.9    (345.7)    (38.3)    145.5--------------------------------------------------------------------- Cash and Cash Equivalents at  Beginning of Period            282.2     942.5     445.4     451.3--------------------------------------------------------------------- Cash and Cash Equivalents at  End of Period                 $407.1    $596.8    $407.1    $596.8=====================================================================
                           Transocean Inc.                      Fleet Operating Statistics                            Operating Revenues ($ Millions) (1)                     -------------------------------------------------                                                    Nine Months Ended                          Three Months Ended            Sept 30,                     ----------------------------- -------------------Transocean Drilling  Sept 30,  June 30,  Sept 30, Segment:              2006      2006      2005      2006      2005                     --------- --------- --------- --------- ---------Contract Drilling Revenues  High-Specification   Floaters:    Fifth-Generation     Deepwater     Floaters          $257.5    $227.8    $220.9    $710.9    $627.0    Other Deepwater     Floaters          $246.0    $193.8    $161.8    $611.5    $432.8    Other High-     Specification     Floaters           $62.0     $62.5     $60.8    $175.5    $167.0  Total High-   Specification   Floaters            $565.5    $484.1    $443.5  $1,497.9  $1,226.8  Other Floaters       $217.9    $167.4    $136.1    $551.3    $338.5  Jackups              $184.1    $155.1    $133.2    $482.9    $387.9  Other Rigs            $23.8     $21.5     $22.8     $66.3     $65.1Subtotal               $991.3    $828.1    $735.6  $2,598.4  $2,018.3Other Revenues  Client Reimbursable   Revenues             $30.1     $21.8     $19.8     $76.5     $63.7  Integrated Services   and Other             $4.3      $3.4      $7.2     $21.4     $38.5Subtotal                $34.4     $25.2     $27.0     $97.9    $102.2Total Company        $1,025.7    $853.3    $762.6  $2,696.3  $2,120.5                                   Average Dayrates (1)                     -------------------------------------------------                                                    Nine Months Ended                          Three Months Ended            Sept 30,                     ----------------------------- -------------------Transocean Drilling  Sept 30,  June 30,  Sept 30, Segment:              2006      2006      2005      2006      2005                     --------- --------- --------- --------- ---------  High-Specification   Floaters:    Fifth-Generation     Deepwater     Floaters        $246,000  $216,500  $197,100  $223,700  $192,300    Other Deepwater     Floaters        $222,300  $190,200  $141,700  $188,700  $133,300    Other High-     Specification     Floaters        $181,500  $174,700  $166,300  $172,000  $163,400  Total High-   Specification   Floaters          $226,700  $199,300  $168,800  $201,400  $163,000  Other Floaters     $136,800  $118,200   $90,400  $122,000   $82,000  Jackups             $83,400   $73,000   $58,900   $75,800   $58,200  Other Rigs          $52,400   $47,500   $48,000   $49,100   $47,000Total Drilling Fleet $146,900  $129,000  $107,100  $132,000  $102,400
                                      Utilization (1)                     -------------------------------------------------                                                    Nine Months Ended                          Three Months Ended            Sept 30,                     ----------------------------- -------------------Transocean Drilling  Sept 30,  June 30,  Sept 30, Segment:              2006      2006      2005      2006      2005                     --------- --------- --------- --------- ---------  High-Specification   Floaters:    Fifth-Generation     Deepwater     Floaters           88%       89%       94%       90%       92%    Other Deepwater     Floaters           75%       70%       83%       75%       79%    Other High-     Specification     Floaters           93%       98%       99%       94%       94%  Total High-   Specification   Floaters             82%       81%       89%       83%       86%  Other Floaters        86%       74%       68%       78%       63%  Jackups               96%       93%       98%       93%       96%  Other Rigs            76%       62%       51%       64%       51%Total Drilling Fleet    87%       81%       82%       83%       79%
(1) Average daily revenue is defined as contract drilling revenue    earned per revenue earning day in the period. A revenue earning    day is defined as a day for which a rig earns dayrate after    commencement of operations. Utilization is defined as the total    actual number of revenue earning days in the period as a    percentage of the total number of calendar days in the period for    all drilling rigs in our fleet.
                   Transocean Inc. and Subsidiaries           Non-GAAP Financial Measures and Reconciliations      Operating Income Before General and Administrative Expense                 to Field Operating Income by Segment                          (in US$ millions)                            Three Months Ended      Nine Months Ended                         ------------------------- -------------------                           Sept.    June    Sept.    Sept.     Sept.                            30,      30,     30,      30,       30,                           2006     2006    2005     2006      2005                         --------- ------- ------- --------- ---------Transocean Drilling Segment  Operating revenue      $1,025.7  $853.3  $762.6  $2,696.3  $2,120.5  Operating and   maintenance expense   (1)                      560.9   549.3   439.8   1,585.2   1,267.3  Depreciation               99.2   102.0   102.1     302.8     304.0  Gain from disposal of   assets, net              (47.6) (110.6)   (2.2)   (222.3)    (37.9)                         --------- ------- ------- --------- ---------Operating income before general and administrative expense     413.2   312.6   222.9   1,030.6     587.1Add back (subtract): Depreciation    99.2   102.0   102.1     302.8     304.0             Gain from              disposal of              assets, net              (1)           (47.6) (110.6)   (2.2)   (222.3)    (37.9)                         --------- ------- ------- --------- ---------Field operating income     $464.8  $304.0  $322.8  $1,111.1    $853.2                         --------- ------- ------- --------- ---------
(1) Loss on retirement for Q3 05 and YTD Q3 05 of $1.5 million and    $3.7 million, respectively, was reclassed out of operating and    maintenance expense and into gain from disposal of assets, net.

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

SOURCE: Transocean Inc.