Oct. 31 (Bloomberg) -- Transocean Inc., the world's largest offshore oil and gas driller, said third-quarter earnings tripled as increasing exploration spending by producers lifted rents for the most prized deepwater rigs.

Net income climbed to $973 million, or $3.24 a share, from $309 million, or 96 cents, a year earlier, Houston-based Transocean said today in a statement. Per-share profit excluding such items as a tax gain was about $2.12, 13 cents higher than the average of 26 analyst estimates compiled by Bloomberg. Revenue jumped 50 percent to $1.54 billion.

``It looks like a good number,'' said Jud Bailey, an analyst at Jefferies & Co. in Houston who rates Transocean shares at ``buy'' and owns none. ``Revenue was a little higher, so it was a clean beat.'' Bailey said he expected profit of $1.92 a share, excluding one-time items.

Increasing exploration spending by producers has kept the most advanced deepwater rigs operating near capacity for two years, according to publisher ODS-Petrodata in Houston. Transocean said utilization of its deepwater rigs rose to 99 percent in the third quarter from 88 percent a year earlier.

Transocean shares climbed $4.50, or 3.9 percent, to $119.37 in New York Stock Exchange composite trading. The stock has jumped 48 percent this year.

$600,000 a Day

Transocean said yesterday that it secured a drillship contract at a rent of $600,000 a day, an industry record. Such floating rigs can drill in waters as deep as 10,000 feet (3,048 meters). The company didn't identify the customer on the contract, which begins in 2009. The rig, the Deepwater Pathfinder, is currently being used at a rent of $395,000 a day.

News of that contract was more significant than Transocean's earnings report because the deal broke through a psychological barrier in rig rents, said Michael Drickamer, an analyst at Morgan Keegan & Co Inc. in Memphis, Tennessee. ``This shows they can still go higher,'' he said.

Transocean said its contract backlog swelled to $22.9 billion, with projects stretching into 2015, from $21.2 billion three months ago.

The average third-quarter rent for Transocean's most advanced rigs was $323,200 a day, up 31 percent from a year earlier. Shallow-water jack-up rigs, which have retractable legs that extend to the sea floor, rented for $120,500 a day, up 44 percent.

Demand Outlook

Demand for jack-up rigs should be strong enough to absorb new units coming onto the market through at least the first half of next year, Transocean Chief Executive Officer Robert Long told investors today on a conference call.

``Right now we see a lot of growth in demand still out there over the next six months or so,'' Long said. There are 81 new jack-ups scheduled for delivery between now and 2010, according to ODS-Petrodata.

Operations and maintenance costs in the third quarter rose 18 percent to $663 million, which was ``in line'' with analyst estimates, said Bailey of Jefferies & Co.

Transocean Chief Financial Officer Greg Cauthen said costs will rise 11 percent to 13 percent next year as labor and equipment become more expensive and tight shipyard capacity drives up maintenance expenses.

Rig Count Rises

Worldwide, there were 3,166 rigs operating at the end of the third quarter, up 1 percent from a year earlier, according to a count by Baker Hughes Inc. The rig count reached a 21-year high at 3,352 in February.

Transocean is acquiring GlobalSantaFe Corp., the second- largest offshore driller, in a $17 billion transaction announced in July. The purchase, scheduled for a Nov. 9 shareholder vote, will leave Transocean with 147 rigs, roughly one-fourth of the world's total, and a $33 billion order backlog.

U.S. drillers Diamond Offshore Drilling Inc. and Noble Corp. this month reported third-quarter earnings of $205.5 million and $318.3 million, respectively. GlobalSantaFe is scheduled to report its earnings after 4 p.m. today.

To contact the reporter on this story: Amy Strahan in Houston at astrahan@bloomberg.net

Last Updated: October 31, 2007 16:11 EDT