Transocean (RIG) Economic Moat Analysis25

Evidence

We have eighteen drillships and two harsh environment semisubmersibles that are equipped with dual-activity technology, which allows our rigs to perform simultaneous drilling tasks in a parallel rather than sequential manner, reducing well construction critical path activities and, thereby, improving efficiency in both exploration and development drilling.

Business—dual-activity drilling technology · Filed 23/02/2026

Two of our drillships are equipped with 1,700 short ton hoisting capacity and 20,000 psi blowout preventers.

Business—hoisting and blowout preventer capabilities · Filed 23/02/2026

THE COMPANY ACHIEVED COMPANY RECORD-BREAKING UPTIME PERFORMANCE OF 97.7% IN 2025.

Compensation discussion—2025 achieved uptime · Filed 31/03/2026

The offshore contract drilling industry is highly competitive with numerous industry participants, none of which has a dominant market share.

Risk factors—industry competition and market shares · Filed 23/02/2026

Drilling contracts are traditionally awarded on a competitive bid basis.

Risk factors—competitive contract bidding · Filed 23/02/2026

Although rig availability, service quality and technical capability are drivers of customer contract awards, bid pricing and intense price competition are often key determinants for which a qualified contractor is awarded a job.

Risk factors—price and technical capability in contract awards · Filed 23/02/2026

We have idled and stacked rigs and may in the future idle or stack additional rigs or enter into lower dayrate drilling contracts in response to market conditions.

Risk factors—realized rig idling and stacking · Filed 23/02/2026

During periods of low oil and natural gas price levels, new construction has resulted in an oversupply of rigs and has caused a subsequent decline in dayrates and rig utilization rates, sometimes for extended periods of time.

Risk factors—historical oversupply and dayrate declines · Filed 23/02/2026

The contract backlog for our fleet was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ February 19, ​ October 15, ​ February 12, ​ ​ ​ 2026 ​ ​ 2025 ​ ​ 2025 ​ ​ (in millions) Contract backlog ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ $ 4,477 $ 5,105 $ 6,363 ​ Harsh environment floaters ​ ​ 1,587 ​ ​ 1,623 ​ ​ 1,965 ​ Total contract backlog $ 6,064 $ 6,728 $ 8,328 ​ Our contract backlog includes only firm commitments which are represented by signed drilling contracts or, in some cases, by other definitive agreements awaiting contract execution.

MD&A—firm backlog comparison through February 19, 2026 · Filed 23/02/2026

Contract drilling revenues—Contract drilling revenues increased for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to the following: (a) approximately $80 million resulting from higher average daily revenues, (b) approximately $30 million resulting from increased utilization, (c) approximately $25 million resulting from increased reimbursement revenues, and (d) approximately $20 million resulting from improved revenue efficiency for the active fleet.

MD&A—first-half 2026 revenue increase attribution · Filed 07/08/2026

AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ 2025 ​ ​ 2026 ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract drilling revenues ​ $ 966 ​ $ 988 ​ $ 2,047 ​ $ 1,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating and maintenance ​ ​ 608 ​ ​ 599 ​ ​ 1,214 ​ ​ 1,217 ​ Depreciation and amortization ​ ​ 148 ​ ​ 175 ​ ​ 291 ​ ​ 351 ​ General and administrative ​ ​ 56 ​ ​ 49 ​ ​ 105 ​ ​ 99 ​ ​ ​ ​ 812 ​ ​ 823 ​ ​ 1,610 ​ ​ 1,667 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss on impairment of assets ​ ​ — ​ ​ (1,136) ​ ​ — ​ ​ (1,136) ​ Gain (loss) on disposal of assets, net ​ ​ (2) ​ ​ 7 ​ ​ 2 ​ ​ 9 ​ Operating income (loss) ​ ​ 152 ​ ​ (964) ​ ​ 439 ​ ​ (900) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 12 ​ ​ 10 ​ ​ 22 ​ ​ 18 ​ Interest expense ​ ​ 20 ​ ​ (112) ​ ​ (256) ​ ​ (228) ​ Loss on retirement of debt ​ ​ — ​ ​ — ​ ​ (11) ​ ​ — ​ Other, net ​ ​ — ​ ​ (27) ​ ​ 7 ​ ​ (23) ​ ​ ​ ​ 32 ​ ​ (129) ​ ​ (238) ​ ​ (233) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before income taxes ​ ​ 184 ​ ​ (1,093) ​ ​ 201 ​ ​ (1,133) ​ Income tax expense (benefit) ​ ​ 14 ​ ​ (155) ​ ​ (40) ​ ​ (116) ​ Net income (loss) ​ $ 170 ​ $ (938) ​ $ 241 ​ $ (1,017) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.15 ​ $ (1.06) ​ $ 0.22 ​ $ (1.15) ​ Diluted ​ $ 0.04 ​ $ (1.06) ​ $ 0.21 ​ $ (1.15) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average shares outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 1,120 ​ ​ 888 ​ ​ 1,115 ​ ​ 885 ​ Diluted ​ ​ 1,202 ​ ​ 888 ​ ​ 1,125 ​ ​ 885 ​ ​ ​ ​ ​ See accompanying notes.

Unaudited consolidated statements of operations—2026 and 2025 comparison · Filed 07/08/2026

AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ ​ ​ June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ Cash flows from operating activities ​ ​ ​ ​ ​ ​ ​ Net income (loss) $ 241 ​ $ (1,017) ​ Adjustments to reconcile to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 291 ​ ​ 351 ​ Share-based compensation expense ​ ​ 15 ​ ​ 16 ​ Loss on impairment of assets ​ ​ — ​ ​ 1,136 ​ Gain on disposal of assets, net ​ ​ (2) ​ ​ (9) ​ Amortization of debt-related balances, net ​ ​ 20 ​ ​ 25 ​ (Gain) loss on adjustment to bifurcated compound exchange feature ​ ​ 19 ​ ​ (65) ​ Loss on retirement of debt ​ ​ 11 ​ ​ — ​ Deferred income tax benefit ​ ​ (73) ​ ​ (157) ​ Other, net ​ ​ (1) ​ ​ 31 ​ Changes in contract liabilities, net ​ ​ (83) ​ ​ (84) ​ Changes in deferred costs, net ​ ​ 46 ​ ​ 16 ​ Changes in other operating assets and liabilities, net ​ ​ (84) ​ ​ (89) ​ Net cash provided by operating activities ​ ​ 400 ​ ​ 154 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities ​ ​ ​ ​ ​ ​ ​ Capital expenditures ​ ​ (52) ​ ​ (84) ​ Investment in equity of unconsolidated affiliates ​ ​ (2) ​ ​ — ​ Proceeds from disposal of assets, net of costs to sell ​ ​ 26 ​ ​ 10 ​ Proceeds from disposal of investment in note receivable from unconsolidated affiliate ​ ​ 13 ​ ​ — ​ Proceeds from disposal of investment in equity of unconsolidated affiliate ​ ​ — ​ ​ 4 ​ Net cash used in investing activities ​ ​ (15) ​ ​ (70) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities ​ ​ ​ ​ ​ ​ ​ Repayments of debt ​ ​ (586) ​ ​ (240) ​ Other, net ​ ​ (1) ​ ​ (13) ​ Net cash used in financing activities ​ ​ (587) ​ ​ (253) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net decrease in unrestricted and restricted cash and cash equivalents ​ ​ (202) ​ ​ (169) ​ Unrestricted and restricted cash and cash equivalents, beginning of period ​ ​ 997 ​ ​ 941 ​ Unrestricted and restricted cash and cash equivalents, end of period $ 795 ​ $ 772 ​ ​ ​ ​ ​ See accompanying notes.

Unaudited consolidated cash flows—operating cash, capital spending and debt repayment · Filed 07/08/2026

Costs and expenses—Operating and maintenance costs and expenses decreased for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to the following: (a) a non-cash loss of $34 million in the earlier year resulting from an unfavorable legal outcome, (b) approximately $10 million resulting from rigs sold, and (c) approximately $10 million resulting from lower asset maintenance costs.

MD&A—operating cost reduction attribution · Filed 07/08/2026

​ Key accomplishments include: ​ ■ Achieved exceptional safety results with zero operational integrity events and zero lost-time incidents across our fleet ■ Delivered fleet uptime of nearly 98% ■ At $461,300, earned the highest average daily revenue per rig among our key competitors ■ Retired $1.3 billion in debt, materially exceeding $700 million in scheduled maturities, and reduced annual interest expense by $90 million ■ Streamlined our organizational structure, improved efficiency of rig expenditures and rationalized global shore bases, resulting in an aggregate reduction in operating and support costs of approximately $250 million through 2026 ■ Increased cash flow margins throughout the year, achieving 31% in Q4-25 ■ Further rationalized our offshore fleet by recycling six rigs ■ Completed five major planned “out of service” projects on time and within budget.

Shareholder letter—reported 2025 operating and capital achievements · Filed 31/03/2026

Our offshore drilling services contracts are individually negotiated and vary in their terms and conditions.

Business—individual negotiation of contract terms · Filed 18/02/2025

Certain of our drilling contracts may be cancelable for the convenience of the customer, typically with payment of an early termination fee.

Business—customer convenience termination and fees · Filed 18/02/2025

The contractual operating dayrate may be higher than the actual dayrate we ultimately receive because an alternative contractual dayrate, such as a waiting-on-weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances, or because of a number of factors, including rig downtime or suspension of operations.

MD&A—alternative contractual dayrates and downtime · Filed 07/08/2026

As of February 19, 2026, our uncommitted fleet rates for each of the five years in the period ending December 31, 2030 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 Uncommitted fleet rate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ultra-deepwater floaters ​ 36 % ​ 52 % ​ 82 % ​ 91 % ​ 98 % ​ Harsh environment floaters ​ 5 % ​ 45 % ​ 97 % ​ 100 % ​ 100 % ​ Performance and Other Key Indicators Contract backlog—We believe our contract backlog provides an indicator of our future revenue-earning opportunities.

MD&A—uncommitted fleet rates as of February 19, 2026 · Filed 23/02/2026

In June 2026, we entered into an agreement with Equinor ASA, conditional upon receipt of license approvals, for three harsh environment semisubmersible rigs.

MD&A—conditional three-rig customer agreement · Filed 07/08/2026

The contract, once approved, represents $1.0 billion of incremental contract backlog, excluding additional services, which is not included in the contract backlog presented above.

MD&A—conditional incremental backlog excluded from reported backlog · Filed 07/08/2026

​ Additionally, we expect to achieve more than $200 million in cost synergies – incremental to the approximately $250 million savings expected from Transocean on a standalone basis – with improved cash‑flow generating potential supported by a combined pro forma backlog of close to $11 billion.

Shareholder letter—expected combination synergies and standalone savings · Filed 31/03/2026

Pursuant to the Agreement, and on the terms and subject to the conditions thereof, at the time on which the order of the Supreme Court of Bermuda providing for its sanction of the Scheme of Arrangement is filed with the Registrar of Companies of Bermuda, the Business Combination will become effective and Valaris will become our wholly owned subsidiary.

Note 1—conditions for business combination effectiveness · Filed 07/08/2026

(2) The performance units granted on February 13, 2025, are subject to a 36-month performance period beginning January 1, 2025, and ending December 31, 2027.

Executive compensation—granted 2025 performance units and measurement period · Filed 31/03/2026

The actual number of performance units received will be determined in the first 60 days of 2028 and is contingent on the Company’s absolute free cash flow and performance in total shareholder return relative to the Performance Peer Group over a three-year performance measurement period.

Executive compensation—free cash flow and relative shareholder return conditions · Filed 31/03/2026

The first installment vested on March 1, 2026, and the other installments will vest on March 1, 2027, and March 1, 2028.

Executive compensation—actual first installment vesting and future schedule · Filed 31/03/2026

​ ​ Transocean 2026 P-71 Proxy Statement Table of Contents AUDIT COMMITTEE REPORT The Audit Committee, consisting of four independent directors, operates under the Audit Committee Charter as adopted by the Board of Directors, in overseeing: ■ The integrity of the financial reporting process resulting in the Company’s financial statements; ■ Compliance with legal and regulatory requirements; ■ The reporting and assurance process for sustainability disclosures that require third party assurance.

Audit committee report—independent membership and oversight · Filed 31/03/2026

Our articles of association and Swiss law contain provisions that could prevent or delay an acquisition of the company by means of a tender offer, a proxy contest or otherwise.

Risk factors—anti-takeover provisions · Filed 23/02/2026

Neither Pay Governance nor any of its affiliates provided the Company with any other services in 2025.

Compensation governance—consultant services during 2025 · Filed 31/03/2026

Pursuant to the Consent Decree, we agreed to pay an immaterial monetary civil penalty, and we further agreed (i) to take or continue to take certain corrective actions to ensure current and future Permit and CWA compliance, including implementing certain procedures and submitting reports and other information, in each case according to the timelines and as described in the Consent Decree, (ii) to appoint an independent auditor to review, audit and report on our compliance with certain of our obligations thereunder, and (iii) to certain non-exclusive stipulated monetary penalties if we fail to comply with applicable provisions of the Consent Decree.

Other matters—consent decree penalty, corrective actions and independent audit · Filed 07/08/2026

As of February 11, 2025, 878,886,948 shares were outstanding.

Cover page—shares outstanding February 11, 2025 · Filed 18/02/2025

As of February 17, 2026, 1,102,848,748 shares were outstanding.

Cover page—shares outstanding February 17, 2026 · Filed 23/02/2026

These decreases were partially offset by the following increases: (a) approximately $25 million resulting from reimbursable costs and (b) approximately $25 million resulting from personnel costs.

MD&A—personnel and reimbursable cost increases · Filed 07/08/2026

The target award value of the 2025 RSU grants to each of the Named Executive Officers was weighted at 50% of each officer’s total 2025 LTI target award value.

Executive compensation—time-vested RSU weighting in 2025 incentive awards · Filed 31/03/2026

Publication history

Sources

• filing-1 · Filed 23/02/2026
• filing-2 · Filed 07/08/2026
• filing-3 · Filed 31/03/2026
• filing-4 · Filed 18/02/2025
• filing-5 · Filed 21/02/2024
• filing-6 · Filed 05/05/2026