Noble bullish, despite slowdown

A slowdown in 2014 drilling will be short-lived, according to Noble Corporation, which posted growing margins thanks to its expanding fleet, with another four units due for delivery by the end of 2014. 

Noble’s chairman, president and CEO, David W. Williams, said new rig additions contributed to a 7% increase in the company’s revenues in Q1, while contract drilling costs were flat. A reduction in operating downtime to 4.5% and higher bonus revenue also supported the increase in quarterly revenues, Noble said. 

Image: The newbuild drillship Noble Bob Douglas, which has been operating offshore New Zealand. From Noble Corp.  

The firm took delivery of three new ultra-deepwater drillships and two high-specification jackups in 2013. Early 2014 then saw the delivery of two additional jackups, the Noble Houston Colbert and Noble Sam Turner (pictured below), which are now preparing to start work offshore Argentina and in the Danish sector of the North Sea, respectively. 

“By the end of 2014, we expect to have taken delivery from shipyards of our final two ultra-deepwater drillships and two of our final three high-specification jackups, largely concluding our current rig construction program,” Williams says. 

However, the company's total contract backlog at 31 March 2014 was an estimated $14.3 billion compared to $15.4 billion at 31 December 2013. Noble said this reflected a reduced pace of customer activity in early 2014.

Addressing the current offshore environment, Williams says: "We continue to believe the more guarded exploration and production spending pattern shown by some operators during early 2014 is temporary and that contract visibility, especially in the floating rig segment, is likely to improve as we progress further into 2014 and 2015.

"Despite the current market dynamics… We believe the offshore drilling business remains fundamentally sound over the long-term and Noble is better positioned to address the opportunities expected with the next cyclical upturn with a more versatile and focused fleet run by skilled and highly competent crews."

The firm said Q1 profits rose to $256 million, compared to $174 million in Q4 2013. Revenues in Q1 were $1.3 billion, compared to the previous quarter’s $1.2 billion, and $971 million in Q1 2013.  

Utilization of the floating rig fleet (semisubmersibles and drillships) improved to 85% in Q1, from 84% in Q4 2013. The improvement in utilization was due to a full quarter of operations on the newbuild ultra-deepwater drillship Noble Bob Douglas, which was operating offshore New Zealand, and on the drillship Noble Roger Eason, operating offshore Brazil. Partially offsetting the utilization improvement was increased idle time on the semisubmersible Noble Homer Ferrington, following the completion of a drilling program in the Eastern Mediterranean in early January 2014. 

Average daily revenues in the floating rig fleet were $393,300 in the first quarter of 2014, or an improvement of approximately 4 percent compared to $378,400 in the fourth quarter of 2013.

Q1 utilization of the company's jackup rig fleet was 86%, consistent with Q4 2013. Fewer operating days on certain rigs in Mexico and West Africa were offset by a full quarter of operations from the newbuild jackup Noble Mick O'Brien, which began operations in the Middle East in Q4 2013, and the newbuild jackup Noble Regina Allen, which started operations in Q1 2014 in the North Sea.  

Average daily revenues in the jackup fleet during the first quarter improved to $125,000 from $115,700 during Q4 2013. 


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