LONDON, June 22, 2016 /PRNewswire/ -- Noble Corporation plc (NYSE: NE) today announced that it has now received the full settlement value of $540 million from Freeport-McMoRan (Freeport) pursuant to the previously announced settlement and termination agreement between Noble, Freeport and Freeport's oil and gas subsidiary. Noble received $540 million in cash through the receipt of Freeport shares, which were immediately resold by Noble under a previously disclosed distribution agreement.
With the settlement value collected, Noble's cash and cash equivalents balance is approximately $865 million at June 22, 2016. The Company's available revolver capacity remains undrawn at $2.445 billion, resulting in a present liquidity position of approximately $3.3 billion, before a final payment of an estimated $410 million is made for the delivery of the high-specification jackup Noble Lloyd Noble. The payment is expected to be made in July 2016.
In addition to the $540 million, Noble can receive additional contingent payments from Freeport of $25 million and $50 million depending upon the average price of West Texas Intermediate crude oil over a twelve-month period beginning June 30, 2016.
The contracts for both the Noble Sam Croft and Noble Tom Madden were terminated on May 10, 2016. Both rigs are in the process of being warm stacked while contract opportunities are evaluated. While warm stacked, operating costs are expected to decline by an estimated $100,000 a day for each rig.
For the second quarter of 2016, Noble expects to recognize revenues associated with these two rigs of approximately $431 million, which includes a $348 million termination fee, $52 million related to second quarter operations through the date of termination and $31 million for the accelerated recognition of other deferred contractual items. The remaining proceeds from the settlement will be applied to outstanding accounts receivable, mainly from the first quarter. Second quarter contract drilling services costs will include the accelerated recognition of deferred mobilization and other expenses of approximately $11 million, as well as normal rig operating expenses for these two rigs.
About Noble Corporation plc
Noble is a leading offshore drilling contractor for the oil and gas industry. The Company owns and operates one of the most modern, versatile and technically advanced fleets in the offshore drilling industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 30 offshore drilling units, consisting of 16 semisubmersibles and drillships and 14 jackups, focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide. Noble is a public limited company registered in England and Wales with company number 08354954 and registered office at Devonshire House, 1 Mayfair Place, London, W1J 8AJ England. Additional information on Noble is available at www.noblecorp.com.
Forward-looking Disclosure Statement
Statements regarding cost reduction for warm stacked rigs, second quarter 2016 revenue and cost recognition, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, the actual amount of downtime, factors that reduce applicable dayrates, violations of anticorruption laws, hurricanes and other weather conditions, market conditions, the future price of oil and gas and other factors detailed in the Company's most recent Form 10-K, Form 10-Q's and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
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SOURCE Noble Corporation