A subsidiary of Chevron terminated a contract for a rig working in deep U.S. waters in the Gulf of Mexico nearly a year early, Transocean announced.

"A subsidiary of Chevron elected to exercise its contractual option to terminate the drilling contract for the ultra-deepwater drillship Discoverer Clear Leader, effective November 2017, prior to its expiration in October 2018," the company said in a statement.

The rig was last listed in Transocean's fleet status report as deployed in the Gulf of Mexico at a day rate of $575,000, an increase of 1 percent from the previous rate to lease the rig each day. Transocean said it would realize a lump-sum $148 million for contract termination fees.

Chevron had no comment about the early termination. The company said in March that its "long-term strength" was underpinned by projects like those in the deep waters of the Gulf of Mexico.

The company pegged its exploration and production budget for 2017 at $20 billion, 15 percent lower than last year and 42 percent below 2015 levels. It's the fourth year in a row for spending cuts for one of the largest energy companies in the world.

Speaking before stockholders at their annual meeting, CEO John Watson said his company was looking to turn the corner after cutting costs in an effort to balance its books.

In early March, the company's exploration and production team told analysts in New York that, after heavy losses last year, it would be generating cash by 2018.

Companies like Transocean that provide services for exploration and production operations were hurt by the recent downturn in crude prices oil prices, which collapsed below $30 per barrel early last year. Some of those same companies are learning to cope with oil prices holding near $50 per barrel.

Transocean in August reached an agreement to acquire its North Atlantic rival, Songa Offshore. 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 from Royal Dutch Shell for the next 10 years.

A March report from analysis group Wood Mackenzie found deep water basins were getting more competitive. The cost to break even on oil and gas projects in deep waters dropped from around $70 per barrel to below $50 per barrel in some cases.

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