Transocean (RIG) has been confronted with significant challenges during the current decade: the Deepwater Horizon disaster followed by lower oil prices. The former has largely been dealt with and the latter has not stopped the company from generating cash flow and reducing debt despite lower returns. It has narrowed its strategic focus to deepwater and harsh environment drilling. It is about to acquire Songa Offshore (SONG NO), which having overcome its own obstacles, adds a newly profitable, cash generative business with a substantial contract backlog. Together, they look capable of coming through a subdued oil market during 2018-2019. The combined group has over $2.0bn cash, a $3bn undrawn RCF to mid-2019 and potential to issue first lien rig debt of up to $1.4bn. Deepwater drillers are increasingly comfortable at $40-$60bbl prices, and in the next 2-3 years the E&P sector must to face up to replacing oil reserves. By 2020 RIG should have a lean, high spec fleet ready to benefit from any significant upswing.