How Noble rigs fare and what are they up to?

Offshore drilling contractor Noble Corporation has won new contracts and extensions for its rig fleet and provided an operational and financial update for the fourth quarter of 2022.

With the offshore drilling market picking up speed over the past year, offshore drilling contractors have been on the receiving end of the benefits presented by the increase in demand and higher day rates. Despite this, the contrast between the latest contract awards for the Noble fleet and those recently announced by its rivals Transocean and Valaris is evident in the type of rigs which secured new jobs.

In line with this, Transocean got several new semi-submersible deals, Valaris disclosed mostly new jack-up deals, and Noble secured multiple new drillship deals. While Transocean revealed that the new contracts bring higher day rates, both Valaris and Noble did not reveal the day rates for many of their rigs.

Even though the preparation of audited financial statements for the fourth quarter of 2022 has not been completed, Noble Corporation announced on Friday, 20 January 2023, that it had determined, based on preliminary results, the expected adjusted EBITDA – a non-GAAP financial measure – would be between $140 and $150 million, rather than between $155 and $175 million as previously disclosed.

As explained by the firm, this reduction is primarily related to the previously reported mechanical issues on the Noble Regina Allen jack-up rig.

Noble’s debt was $673 million and cash and cash equivalents were $470 million as of 31 December 2022, resulting in a net debt balance of $203 million. During the fourth quarter, the offshore drilling giant executed over $85 million of share repurchases, including the compulsory purchase of legacy Maersk Drilling shareholders in November and open market share repurchases conducted during December. The firm also advised that its final results upon completion of its closing procedures might vary from the preliminary estimates.

Furthermore, Noble says that the Noble Gerry de Souza drillship is expected to start a new contract in Nigeria with an undisclosed operator with a firm duration of nine months and with unpriced options extending into 3Q 2024. The 2011-built drillship was previously contracted by APA Corp in Suriname, but this was novated to TotalEnergies. As a result, the rig was scheduled to complete it in December 2022 under an undisclosed day rate.

The Noble Gerry de Souza drillship was constructed at Samsung Heavy Industries and comes with Samsung 12000 Double Hull design. This drillship can operate in water depths of up to 12,000 ft. The rig’s maximum drilling depth is 40,000 ft. It can accommodate 200 people.

Moreover, the Noble Stanley Lafosse drillship has received a commitment from an undisclosed operator for a six-well work programme in the U.S. Gulf of Mexico. Noble underlines that this scope is expected to begin around June 2023 and keep the rig busy until mid-2024. This contract also includes five one-well options at mutually agreed day rates and the firm backlog associated with the contract is estimated to be approximately $148 million. 

The 2014-built Noble Stanley Lafosse drillship is currently working for Murphy in the U.S. Gulf of Mexico under a day rate of $300,000. The deal is scheduled to end in March 2023, however, Murphy still has three one-well options, based on Noble’s fleet status report from November 2022. This drillship has the same design and maximum drilling depth as the Noble Gerry de Souza drillship.

Another rig that secured more work in the U.S. Gulf of Mexico is the Noble Faye Kozak drillship, which has been awarded a one-well contract with Kosmos with a minimum duration of 50 days at a day rate of $450,000. This contract is slated to commence in 2Q or 3Q 2023 in direct continuation of the rig’s current work. 

In addition, QuarterNorth Energy has exercised a one-well option, with another one-well option remaining. This rig is scheduled to start working for LLOG in the Gulf of Mexico from February 2023 until April 2023 under a day rate of $420,000. The 2013-built Noble Faye Kozak drillship also has the same design and maximum drilling depth as the previous two.

Meanwhile, the Noble Globetrotter I drillship is expected to start its previously disclosed contract with Petronas in Mexico in late January, later than previously anticipated due to permitting delays. Additionally, the rig has been awarded a new contract with an undisclosed operator for 70 days of plug and abandonment work in the U.S. Gulf of Mexico, which is planned to begin in July 2023.

The 2011-built Noble Globetrotter I drillship is of Globetrotter Class design. It was constructed at STX Shipbuilding & Huisman and can accommodate 180 people. The rig’s maximum drilling depth is 40,000 ft and can operate in water depths of up to 10,000 ft.

Based on Noble’s statement, after the Noble Regina Allen jack-up rig experienced a mechanical failure with the jacking system on one of its legs, it has been safely demobilised to a port in Trinidad with repair plans under development. In the second quarter of 2022, the jack-up started operations in Guyana for Repsol and following the completion of the campaign, the rig returned to Trinidad and Tobago to drill six wells with a different operator. However, this contract was terminated due to extended downtime, as highlighted by Noble.

The company elaborates that this rig has been off day rates since mid-December 2022, underlining that there is no insurance for loss-of-hire, although the rig has standard insurance coverage pertaining to repairs. Noble further outlines that its efforts are currently focused on repairing and positioning the rig for potential redeployment in the second half of 2023, “although timing is uncertain.”

The 2013-built Noble Regina Allen jack-up rig is of Friede & Goldman JU3000N design. It was constructed at Jurong Shipyard and can accommodate 150 people. With a drilling depth capability of 35,000 feet, this rig is capable of operating in water depths of up to 400 ft.

Regarding Noble’s recent activities, it is worth noting that one of its jack-up rigs departed from Port Esbjerg last week after modifications and mobilisation to assist in the CO2 storage project in the Danish sector of the North Sea.

Following a successful pilot phase, Noble will hold a right to all drilling work involved in Project Greensand on market-rate terms until the end of 2027.

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