Investing.com -- Transocean Ltd. shares traded about 3.7% higher in after-hours trading on Tuesday following the company's announcement of a contract valued at more than $1 billion with Equinor.

The agreement covers the use of three harsh environment semisubmersible rigs on the Norwegian shelf. The deal adds over $1 billion to the company's contract backlog across seven rig years, excluding additional services.

The base day rate is set at $399,000 per day, with adjustment provisions expected to push the effective day rate above $400,000 per day when operations begin. The agreement requires license approvals.

The three rigs are all Cat D class vessels, originally built for Equinor and designed to operate in Norwegian winter conditions. The Transocean Enabler is contracted for a three-year program expected to start in the first quarter of 2028, continuing from its current program. The Transocean Encourage will begin a two-year program also starting in the first quarter of 2028. The Transocean Endurance will start a two-year program in the second quarter of 2027 after mobilizing back to Norway from Australia.

Chief Executive Officer Keelan Adamson said the seven-rig-year agreement "demonstrates the strength and resilience of Norway's high-specification harsh environment market and our strong relationship with Equinor."

Transocean operates a fleet of 27 mobile offshore drilling units, including 20 ultra-deepwater floaters and seven harsh environment floaters.