Transocean Ltd. (RIG – Free Report) informed the Texas Workforce Commission that it is planning to slash 110 workers as it was unable to acquire a new contract for its Discover Installation drillship due to weak oil prices.
The employees to be terminated are currently working on the Discoverer Inspiration, an ultra-deepwater drillship operating in international waters off the Gulf of Mexico.The rig will complete its current operating deal and will be laid off after its contract ends.
The lay-offs are regarded as permanent by the company and will commence on Sep 15. Meanwhile, this Switzerland-based Transocean might consider taking back some of the affected employees if it inks a new deal for the Discoverer Inspiration.
The employees to be given the marching orders will earn a severance sop. However, in absence of the bumping rights, staff at more senior ranks cannot replace their subordinates.
For a while now, the oil industry is reeling under the adverse impact of coronavirus pandemic that crippled most sectors until now. Fuel demand took a huge hit following large-scale travel constraints imposed globally. Against this backdrop of a pullback in oil prices, Transocean’s stock price has shed 74.3% of value since the beginning of 2020 when crude was trading at more than $60 a barrel.
Transocean is the world’s largest offshore drilling contractor and a leading provider of drilling management services. The company provides rigs on a contractual basis to explore and develop oil and gas. Transocean offers offshore drilling rigs, equipment, services and manpower (with particular emphasis on ultra-deepwater and harsh environment drilling services) to exploration and production companies worldwide.
Zacks Rank & Key Picks
Transocean currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Gulfport Energy Corporation (GPOR – Free Report) , Cheniere Energy, Inc. (LNG – Free Report) and Chevron Corporation (CVX – Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Read More: Crude Woes: Transocean to Make 110 Employees Redundant – July 14, 2020