Noble Secures New Contracts, Enhances Management Procedures - Research Report
on Noble Corporation
Noble Corporation reports its drilling rig status stating the new contracts
that the company has secured at the start of the year. The company is seeking
to recover after suffering reduced earnings due to prolonged downtime last
NEW YORK, January 24, 2013
NEW YORK, January 24, 2013 /PRNewswire/ --
Contract activities for offshore drilling companies continue to rise given the
high level of demand for offshore drilling services. In light of this, Noble
Corporation (NYSE: NE) [Full Research Report]^(1) recently updated its
drilling rig status report stating three new contracts in the North Sea, West
Africa, and Arabian Gulf areas. Operations for the new contracts will begin in
the second quarter of 2013.
The new contracts are promising signs for investors, though it may take a
while before the company can deliver again after experiencing operational
downtime last year. The effect of the prolonged downtime from their rigs in
the Gulf of Mexico and offshore Brazil is noticeable from the company's third
quarter earnings, with the company earning only $112 million or $0.45 per
share, missing the analysts' consensus estimate of $0.52 by $0.07. Earnings
were down 15.1% from 2011.
As traditional oil fields produce less and less yield each year, the demand
levels for offshore drilling service rise. This leads to higher day rates and
more profitable operations. Drilling activity in the US Gulf of Mexico has
also resumed, after it took a halt following the 2010 oil spill.
Nevertheless, this high demand for offshore drilling service cannot be fully
taken advantage of if Noble Corporation continues to suffer downtime. Late
last year, the U.S. Coast Guard raised several issues regarding Noble's
drillship Noble Discoverer. Complaints were mostly concerned with the
drillship's propulsion and safety management systems. Noble also experienced
downtime in its other drill rigs, with a total of 68 days of downtime in the
month of December alone.
Investors must be patient with Noble Corporation for now, since the results of
the company's new contract developments cannot be reflected until the third
quarter of this year. Indeed, the company is seeing troubled times, but there
are substantial signs that conditions will improve later this year. The Noble
George McLeod, a jack-up rig that is currently undergoing modification in the
Arabian Gulf recently secured a new contract with Talisman to perform work in
Malaysia starting May 2013. The rig is expected to have a day rate of $115,000
under this contract. This will be the biggest revenue boost for Noble
To maximize earnings and to capitalize on the opportunities being presented
now, Noble Corporation must focus on reducing rig downtime. The company
recently issued a statement that it is developing an enhanced plan designed to
ensure that its drilling rigs and their related management procedures comply
with applicable maritime laws and leading industry practices. If this plan
pulls through, then the company may find a way to make up for its lackluster
performance last year.
Noble Corporation is scheduled to release its fourth quarter and full year
2012 results on Thursday, January 24, 2013. The company's next fleet status
report will be issued on February 7, 2013.
^(1) ^ The Full Research Report on Noble Corporation - including full
detailed breakdown, analyst ratings and price targets - is available to
download free of charge at:
Consider National Traders Association
Tired of hearing about the latest, greatest trade opportunity... only to
realize that the ship has long sailed? You need a strong, informative
community in your arsenal. Join the group that has been consistently
identifying momentous situations as they develop -- long before they become
the next top news on major financial networks.
Contact: Demi Lapierre
SOURCE National Traders Association
Press spacebar to pause and continue. Press esc to stop.