Noble Corp. eyes increase in offshore drilling activity despite 3Q loss

Similar to its rival Rowan, which is expected to be acquired by Ensco, offshore driller Noble Corporation is seeing an increase in offshore drilling activity despite recording a loss for the third quarter of the year. 

Noble Corp. on Wednesday reported a net loss attributable to the company for the three months ended September 30, 2018 of $82 million on revenues of $279 million. This compares to a net loss of $96.79 million and revenues of $266.2 million in the same period last year.

Results for the third quarter 2018 included a discrete tax benefit totaling $25 million. Excluding the impact of the discrete tax benefit, the company would have reported a net loss attributable to Noble Corporation of $107 million.

Julie J. Robertson, Chairman, President and Chief Executive Officer of Noble Corporation, stated, “Third quarter results gave convincing evidence of strengthening in the offshore drilling business and demonstrated how Noble is realizing measurable gains from the cyclical improvement.

“Across our fleet, operating days advanced 12 percent when compared to the second quarter, due primarily to higher activity among our premium jack-ups concentrated in the increasingly active North Sea and Middle East regions. Consequently, total revenues improved eight percent over the prior quarter, continuing the favorable trend through 2018, with third quarter revenues exceeding those reported for the first quarter of the year by almost 20 percent.”

Noble’s contract drilling services revenues totaled $267 million in the third quarter, representing an eight percent increase when compared to revenues of $248 million in the preceding quarter.

Total fleet utilization in the third quarter improved to 69 percent, up from 54 percent in the preceding quarter, and up from 60 percent in 3Q 2017, with the higher result due to the improvement in fleet operating days and the retirement and divestiture of four rigs during the second quarter of 2018.

Contract drilling services costs in the third quarter totaled $163 million compared to $151 million in the preceding quarter.

‘A meaningful increase’ 

Robertson noted, “It is apparent that a meaningful increase in drilling activity has begun, as customers increasingly recognize the compelling economics inherent in their offshore project portfolios. As more of these projects transition from an evaluation phase to full execution, and additional access is granted to promising offshore basins, we believe higher fleet utilization industry-wide is likely, especially for high-specification rigs.

She added: “Recent contract awards across the Noble fleet, including those for the drillships Noble Globetrotter II, Noble Tom Madden and Noble Sam Croft, and the recent purchase and concurrent three-year award for the jack-up Noble Johnny Whitstine, give evidence of a more fundamentally sound environment while serving to strengthen Noble’s competitive position as we enter 2019.”

Namely, Noble secured contracts for the drillship Noble Sam Croft for operations in the U.S. Gulf of Mexico, and for the drillship Noble Globetrotter II for operations in the Black Sea. In addition to the contract dayrate for the Black Sea program, the Noble Globetrotter II will continue to collect an idle period rate of $185,000.

It is also worth noting that, at the end of September 2018, the company’s contract backlog totaled $2.5 billion, including $1.5 billion attributable to the floating fleet and $1 billion to the jack-up fleet.

Offshore Energy Today Staff