The Noble Discoverer rig. Image courtesy of Shell/Flickr.

Noble Corporation said Thursday that it retired two rigs and it will warm stack two ultra-deepwater semisubmersibles.

UK-based Noble said it has decided to retire the drillship Noble Discoverer and the jackup Noble Charles Copeland, reducing the company’s fleet count to 30 units.

The Noble Discoverer was part of Shell’s disappointing Arctic campaign last year.

Shell cancelled its contract for the Noble Discoverer drillship in December.

Noble said that Shell terminated its contract for “convenience” and added that Shell would pay for the remaining contract term at 90 percent of the rig’s operating dayrate, adjusted for certain items.

Noble said on Thursday that it will also warm stack the ultra-deepwater semisubmersibles Noble Jim Day and Noble Danny Adkins.

The Noble Jim Day concluded a contract in late January 2016 and the Noble Danny Adkins is expected to conclude its current drilling assignment by late February 2016.

“We face a challenging offshore fundamental outlook in 2016. But Noble has successfully adapted to difficult cycles over its 95-year history and 2016 will be no different,” Noble Corporation chairman of the board David Williams.

Noble booked a $49.48 million operating loss for the fourth quarter of 2015 compared to a $541.86 million loss in the same quarter of 2014.

Results for the quarter included an after-tax charge of $418 million, or $1.73 per diluted share, relating to the impairment of two rigs and certain corporate assets.

Fourth quarter net loss attributable to Noble was $152.2 million, compared to a loss of $609 million in the prior year quarter, while full year net income attributable to the company came in at $511 million, up from $8.49 million in 2014.

Excluding the impact of the impairment charge and contract termination, fourth quarter 2015 net income attributable to Noble would have been $126 million, or $0.52 per diluted share, on revenues of $713 million.

Contract drilling services revenues in the fourth quarter of 2015 were $837 million, or $693 million after excluding $145 million relating to the contract termination on the Noble Discoverer.

The company said that while fleet utilization “improved slightly” in the fourth quarter to 83 percent, compared to 82 percent in the previous quarter, average daily revenues declined 6 percent primarily due to “unfavorable contractual dayrate changes across the fleet and an increase in fleet downtime.”

Full year operating income rose to $920 million, up significantly from $185.94 million in 2014.

As of  December 31, 2015, Noble’s total contract backlog was $6.9 billion compared to $8.1 billion at September 30, 2015.

Noble said it entered 2016 with an estimated 68 percent of available rig operating days committed to contracts, consisting of 57 percent of its floating rig days and 81 percent of the jackup rig days.

Contract drilling services operating costs totaled $299 million for the fourth quarter of 2015, up 2 percent sequentially.

Fourth quarter operating costs included $5 million of expenses tied to the demobilization of the Noble Discoverer following the early termination of the rig’s contract, Noble said.

Net cash from operating activities stood at $510 million in the fourth quarter of 2015 and $1.8 billion for the full year of 2015.

Looking ahead to 2017, the company said that 44 percent of its available fleet operating days are committed to contracts, including 37 percent of its floater days and 52 percent of its jackup rig days.

“Although we are focused on maintaining utilization across the fleet, we plan to manage periods of inactivity, especially as it pertains to our premium rigs, efficiently, with cost management in mind, and strategically, to allow each rig the benefit of a quick response to emerging opportunities,” Williams added.


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