NEW YORK (AP) — Transocean, a major offshore drilling rig contractor, is selling 38 of its shallow water rigs to newly-formed Shelf Drilling International Holdings Ltd. for about $855 million in cash.

The Zug, Switzerland-based company said Monday that the deal also includes $195 million in preferred shares being issued by Shelf, which is owned by private equity groups and management.

The companies said that would bring the total value of the deal to about $1.05 billion.

Transocean Ltd. says it will provide some transition support services to Shelf as part of the transaction.

Transocean owned the Deepwater Horizon rig that caught fire and sank in the Gulf of Mexico in April 2010, leading to the worst offshore oil spill in U.S. history.

Its president and CEO, Steven Newman, said in a statement that the rig sale is part of its strategy “to increase our focus on high-specification floaters and jackups.”

The majority of Transocean’s revenue is generated by its ultra-deepwater high-specification fleet so the company is focusing on developing that business.

Transocean anticipates taking a third-quarter charge related to the latest transaction.

Its U.S. shares gained 77 cents, or 1.5 percent, to $48.32 in premarket trading.

The deal is expected to close in the fourth quarter.