According to Bloomberg, the two companies had discussed details about the potential structure of a tie-up.

However, according to people close to the matter, a final decision on whether or not to pursue a deal has not yet been made, Bloomberg said.

Together, the drillers have a combined market capitalisation of $6bn, down from around $7.9bn at the start of the year, with Transocean falling 35% since the start of January and Seadrill dropping 26%.

Noble Corp, currently valued at $5.3bn, surpassed Transocean as the largest seventh-generation drillship operator in the summer after taking over Diamond Offhore Drilling.

Transocean shares were up 3.7% in pre-market trade, while Seadrill's stock jumped 12.3%.