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The Transocean John Shaw oil platform, operated by Transocean Ltd., sits with other unused platforms in the Port of Cromarty Firth in Cromarty, U.K., on Tuesday, Feb. 16, 2016. Photographer: Matthew Lloyd/Bloomberg

(bloomberg)

(Bloomberg) -- The world’s biggest offshore oil driller may reactivate two to three mothballed rigs a year as the industry embarks on a full-fledged recovery for deepwater exploration.

In announcing a $2.7 billion deal for a rival operator, Transocean Ltd. cited a forecast by energy consultant Wood Mackenzie Ltd. that day-rates in waters more than two miles deep will more than double by 2020. That rebound from the industry’s deep slump could lead Transocean to bring more of its rigs out of long-term parking.

Offshore drilling contractors are currently utilizing just 65 percent of rig capacity, the Swiss company said Tuesday, citing WoodMac data.

“We have, I’d say, a bullish but realistic view of the recovery," Transocean Chief Financial Officer Mark Mey told analysts and investors on a conference call announcing the acquisition of Ocean Rig UDW Inc. "If the recovery projectile is as we expect, we could see two to three rigs reactivated per year through contract."

Despite all the long-term bullish talk, Transocean shares fell 7.6 percent to $11.19 at 12:11 p.m.

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Alex Nussbaum

©2018 Bloomberg L.P.

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