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Gulf Rig Owner Gets $401M Insurance Payment

May 8, 2010, 10:44 am

Originally posted by Chris Kahn - Insurance Journal - May 7, 2010

Transocean Ltd. said Wednesday that it has received $401 million in insurance payments for an oil rig that exploded and sank two weeks ago in the Gulf of Mexico.

Transocean also said in a regulatory filing that it has recieved a request from the Justice Department to preserve information about the rig explosion on April 20. Company executives have been asked to participate in congressional hearings.

Eleven people died in the explosion on the Deepwater Horizon. The well it was drilling also ruptured and has been gushing an estimated 210,000 gallons of oil each day.

Transocean also said that net income tumbled 28 percent in the first three months of the year.

The company cited lower contract revenues for rigs that both drill in deeper waters and those that drill closer to shore.

The results do not include charges related to the Deepwater Horizon rig, which Transocean leased to BP PLC. It exploded on April 20 and sank about 41 miles off the Louisiana coast. The well ruptured and has been gushing an estimated 210,000 gallons of oil each day.

Transocean, the world's largest offshore drilling contractor, reported that net income fell to $677 million, or $2.09 a share, from $942 million, or $2.93 per share, a year ago.

Revenue slid 16.4 percent to $2.6 billion.

Excluding a loss on the sale of two rigs and other charges, Transocean said it would have made $2.22 per share. Analysts, which typically exclude special charges, had expected net income of $2.10 per share on revenue of $2.65 billion.

Transocean's first quarter results were released after the market closed, and the company will host a conference call Thursday morning.

Company shares have plunged 21 percent since the rig explosion, shedding about $6.2 billion in market value. Transocean shares rose about 2 percent to $74.20 in after-hours trading.

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