A contractor that runs a fleet of ultra-deepwater drillships and harsh-environment semisubmersibles, renting them out by the day to oil and gas companies worldwide. Its biggest vessels, like the Deepwater Atlas and Deepwater Titan, drill in waters too deep for fixed platforms, and it has agreed to acquire rival Valaris. The name traces to a 1926 rig-hand named "Stoney" Stoneman, who bought his first drilling rig with a personal check; his company later merged into today's Transocean.
Transocean returned to net income of $170M in Q2 2026 as the absence of a prior-year $1.14B impairment offset a 2.2% revenue decline.
The story this quarter is the absence of a massive , not the . Revenue dipped 2.2% to $966 million as rig sales reduced utilization, but swung to a $170 million profit from a $938 million loss a year ago because the prior-year period carried a $1.14 billion impairment charge on rigs held for sale. The company is generating cash and paying down debt, but the core drilling business is smaller than it was a year ago.
Key takeaways
was $170 million, or $0.04 per diluted share, compared to a $938 million loss in Q2 2025, driven almost entirely by the absence of a $1.14 billion on ultra-deepwater floaters that had been classified as held for sale in the prior-year quarter.
Contract drilling fell 2.2% to $966 million, as the sale of six rigs after Q2 2025 reduced fleet utilization, partially offset by higher average daily revenues.
swung to a $152 million profit from a $964 million loss a year ago, while reached 15.7% compared to negative 97.6% in Q2 2025.
Section summaries
Management's Discussion and Analysis
Q2 2026 net income of $170M driven by absence of prior-year impairment and lower interest expense, offsetting a slight revenue dip.
⌄
Contract drilling revenues fell 2% to $966M, primarily due to lower utilization from six rigs sold after Q2 2025, partially offset by higher average daily revenues.
swung to a $20 million net benefit from a $152 million expense a year earlier, largely due to a $105 million favorable non-cash on the exchange feature of the .
rose 84.4% to $236 million, and more than doubled to $212 million, as the company continued to benefit from the wind-down of newbuild .
Total stood at $6.7 billion as of August 5, 2026, with an additional $1.0 billion conditional agreement with Equinor for three harsh environment rigs not yet included in the figure.
What changed
The Q1 2026 flag to watch Q2 and against $136 million and $164 million resolved positively: free cash flow rose to $212 million and operating cash flow to $236 million, both up sequentially and .
The Q1 2026 flag on and fair-value adjustments on the materialized sharply: the swung to a $105 million favorable adjustment, turning interest expense into a $20 million net benefit from a $276 million expense in Q1 2026.
The Q1 2026 flag on the Valaris all-share acquisition received no material update in this filing; the risk factors section states there were no material changes from the 2025 10-K.
of $6.7 billion as of August 2026 compares to $6.06 billion in February 2026, reflecting new awards that partially offset the consumption of through drilling activity.
What to watch
Next disclosure against the $6.7 billion August 2026 level and whether the $1.0 billion conditional Equinor agreement for three harsh environment rigs is converted to firm .
Q3 2026 and against $212 million and $236 million as the benefit from reduced matures and debt repayments continue.
Shareholder and regulatory approval progress on the Valaris all-share acquisition announced February 9, 2026, and any update to the combined fleet strategy.
Fleet utilization trajectory after the sale of six rigs, and whether management's cited increase in tendering activity translates into new contract awards that restore the base.
swung to a $152M profit from a $964M loss a year ago, largely because the prior-year period included a $1.136B charge on four ultra-deepwater rigs.
dropped $132M to a $20M net benefit, mainly due to a $105M favorable fair-value change on the exchange feature of the .
Total contract stood at $6.7B as of August 5, 2026, with an additional $1.0B conditional agreement with Equinor for three harsh environment rigs not yet included.
rose to $400M for the first half of 2026, while the company used $365M to redeem its and completed the sale of two drillships for $27M.
Management's outlook is positive, citing increased tendering activity and robust demand for ultra-deepwater and harsh environment rigs, with uncommitted fleet rates rising significantly from 2028 onward.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk from $5.1B fixed-rate debt is the primary exposure; no material change in market risks from FY2025 10-K.
⌄
The company is exposed to interest rate risk mainly through its , along with equity price risk from exchangeable bonds and currency risk from international operations.
As of June 30, 2026, total fixed-rate debt was $5.107 billion with a of $5.329 billion, and weighted-average interest rates by maturity bucket ranged from 6.90% to 8.27%.
of outstanding debt fell by $426 million during the six months ended June 30, 2026, driven by a $366 million decrease from redeeming 8.375% senior secured notes due 2028 and $229 million from scheduled repayments.
Those decreases were partially offset by a $169 million net increase in due to changes in market prices of outstanding debt.
The company states there have been no material changes to its market risks compared to the disclosures in its 2025 annual report, except as noted.
There have been no material changes to the risk factors as previously disclosed in “Part I. Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2025.
⌄
There have been no material changes to the risk factors as previously disclosed in “Part I. Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2025.