RIG stock: bankruptcy concern | Debt | My last purchase | Next purchase

 March 21, 2021

Introduction

I have to train myself to learn and read better on Yahoo -> Finance -> Financials. I like to go over those statements and then compare those data shown in the article. 

My study

30 minutes drill

I like to spend at least 30 minutes to go over Financials of RIG stock by myself. 

Transocean

Let's face it, the thesis that ultra-deepwater offshore drilling would be the future of the oil industry has proven to be completely false. And companies like Transocean, which committed billions of dollars to the effort, are paying the price. 

Revenue has stagnated as management has just tried to keep rigs busy, and losses have mounted over the last three years with no end in sight. 

The trends going forward don't look good either. Oil prices are remaining stubbornly low and offshore drilling rig activity has plummeted in 2020. And Transocean has $8.3 billion of debt hanging over the company. 

To be fair, Transocean does have $1.83 billion of cash on the balance sheet, but it also has a lot of obligations this year. $652 million in debt due in 2021 and a total of $1.1 billion will be needed to pay back debt and pay interest charges. On top of that, the company has $1.3 billion in newbuild obligations due in 2021. That cash will dry up quickly if the offshore drilling markets don't improve quickly. 

The oil markets are in trouble amid the transition to electric vehicles, and that will continue to put pressure on oil prices. That ends up hurting companies like Transocean, which may be in bankruptcy court before an oil recovery ever comes. 

First I like to look into debt, Financial -> Balance sheets

8.3 billion of debt hanging over the company. 

I found the item called Total Debt: 8,373,000, which is 8.37 billion dollars. 

My purchase