Rig company Transocean said it was upbeat about the recovery in crude oil prices so far this year, but acknowledged operating in challenging market conditions.

Lower crude oil prices meant exploration and production budgets declined during the trough of the downturn in recent years. A policy from the Organization of Petroleum Exporting Countries, now in its second year, to balance an oversupplied market helped support higher oil prices at least since the middle of last year and improved spending appetites somewhat.

Transocean, which recently acquired rival rig company Songa Offshore, said revenues from its drilling contracts declined $110 million to $589 million for the three months ending Dec. 31. The company attributed the decline to fewer operating days, as well as lower lease rates for some of its rigs.

CEO Jeremy Thigpen said his company made good progress last year, despite the challenging market conditions. Transocean's fleet of rigs was upgraded and overhauled as new assets come into service, while older ones are retired.

"We are encouraged by the upward momentum we continue to see in oil prices, and the resulting increase in demand for our assets and services," he said in a statement.

Songa Offshore had four rigs in its portfolio designated for harsh environments. On top of its legacy fleet, Transocean has four drill ships designed for ultra-deep waters under construction and two of those are already under contract to Royal Dutch Shell for the next 10 years.

"While demand in ultra-deepwater is not as strong, we are encouraged to see customers seeking multi-year fixtures for assets in various basins around the world," Thigpen added.

The deal for Transocean, which shareholders backed in January, implied a value of Songa at about $1.1 billion.

Schlumberger is the world's largest oilfield services company and was among those that encountered headwinds two years ago when the price of crude oil dropped below $30 per barrel. For the three months ending Dec. 31, Schlumberger's revenue of $8.1 billion was up 3 percent from the previous term and 15 percent higher than the same period in 2016.

Schlumberger Chairman and CEO Paal Kibsgaard, looking at the 2018 market landscape, said the OPEC effort was creating a tighter market and improving the general outlook for the energy sector.

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