Noble Corporation Provides Operations Update And Announces Contract Commitment

Sep 04, 2012, 07:30 ET from Noble Corporation

ZUG, Switzerland, Sept. 4, 2012 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported that its seven active rigs operating in the U.S. Gulf of Mexico sustained no damage as a result of Hurricane Isaac.  In preparation for the storm, the Company had suspended operations on these rigs, with each unit generally operating at a dayrate reduced to 90 percent to 95 percent of its full operational dayrate through the seven-day duration of the event. All seven rigs have redeployed crews and have now recommenced operations. Also, the deepwater semisubmersible Noble Max Smith is currently undergoing a planned shipyard program in Pascagoula, Mississippi. While this rig appears not to have sustained damage from the hurricane, the Company expects that the rig may experience 30 to 40 days of unpaid downtime due to a delay in mobilization to Brazil. Upon commencement of mobilization, the unit is expected to return to a mobilization dayrate of $170,000 per day.  

The Company also reported that financial results for the third quarter of 2012 are expected to be negatively impacted by a number of other operational developments and delays in returning rigs to work.  These developments include operations on the ultra-deepwater drillship Noble Globetrotter I located in the U.S. Gulf of Mexico, which has experienced a higher than expected amount of downtime and reduced dayrate while commissioning and testing continues on the rig's subsea blowout prevention and control system (BOP). The rig will remain at a reduced dayrate until all outstanding BOP testing and commissioning is complete, which is expected to occur by the end of the third quarter.

Also, in Brazil, the ultra-deepwater semisubmersible Noble Dave Beard and drillships Noble Leo Segerius and Noble Phoenix have experienced delays in their returns to work following shipyard programs, due in part to a slowdown in the issuance of regulatory approvals by Brazilian authorities. The Noble Dave Beard began earning 90 percent of full operating dayrate in August 2012, while the Noble Leo Segerius is expected to begin earning 90 percent of full operating dayrate in September 2012. Both rigs are expected to remain at this level until regulatory approvals are received. The Company anticipates receiving these approvals by the end of the third quarter 2012. The Noble Phoenix is expected to commence its contract and also begin earning full operating dayrate by the end of the third quarter. In addition, other rigs have experienced higher than planned operational downtime in the quarter to address maintenance and repairs, including the drillship Noble Duchess, operating offshore India, and the jackup Noble Charles Copeland, in the Middle East. The Noble Duchess returned to work on August 30, 2012 and the Noble Charles Copeland is now expected to commence its three-year contract in the Middle East on October 1, 2012.

Primarily as a result of the recent operational developments and delays described above, the Company expects a negative impact to revenues for the third quarter of 2012 of approximately $50 million as compared to the expected revenues disclosed in the Company's last Fleet Status Report.

The Company also reported a new contract commitment for its jackup rig Noble Hans Deul, currently operating in the UK sector of the North Sea. The rig has been awarded a minimum 18-month contract extension by a subsidiary of Royal Dutch Shell plc (Shell), with the extension period expected to commence in February 2013, in direct continuation of the rig's current contract. Revenues expected to be generated over the 18-month extension are estimated at $132 million, or an equivalent dayrate of $242,500 compared to a current dayrate of $175,000. Shell has the right to further extend the rig's contract, pursuant to which the dayrate corresponding to a longer duration contract will be reduced.  The Noble Hans Deul entered service in 2009 and is an F&G JU2000E jackup capable of operating in up to 400 feet of water and with a maximum drilling depth of 30,000 feet.

Noble Corporation expects to issue an updated Fleet Status Report on September 12, 2012, which will be posted on the Company's Web site, under the "Quick Links" section of the homepage.

About Noble

Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 79 offshore drilling units (including five ultra-deepwater rigs and six jackup drilling rigs currently under construction), located worldwide, including in the U.S. Gulf of Mexico, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India and the Asian Pacific. Noble's shares are traded on the New York Stock Exchange under the symbol "NE." Additional information on Noble Corporation is available on the Company's Web site at

Statements regarding financial performance, earnings, revenue, rig demand, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent, downtime or governmental approvals, 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 anti-corruption laws, hurricanes and other weather 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. 

SOURCE Noble Corporation