Offshore driller Noble Corp. sank to a loss during the third quarter of 2016 and saw a drop in revenues amid a decrease in floating rigs utilization due to a challenging offshore drilling market.
The driller on Thursday reported a third quarter 2016 net loss attributable to Noble Corporation of $55 million, on revenues of $385 million. For the third quarter of 2015, net income attributable to Noble Corporation was $326 million, on revenues of $897 million.
Utilization of the company’s 16 floating rigs was 41 percent in the third quarter compared to 51 percent in the second quarter while the utilization of the company’s 14 jack-up rigs was 80 percent in the third quarter compared to 83 percent in the previous quarter.
Addressing third quarter 2016 results and highlights, David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation plc, noted, “Utilization of our jack-up fleet remained healthy in the third quarter at 80 percent and recent contract awards for the Noble Regina Allen and Noble Houston Colbert support our expectations for continued relative strong jack-up fleet performance in the near-term.
“However, in our floating rig fleet, utilization in the third quarter declined from the previous quarter, reflecting the challenging offshore drilling conditions that persist. Also, fleet downtime in the quarter of six percent was slightly above guidance of five percent, and we experienced higher-than-expected shipyard days.”
Noble’s capital expenditures in the third quarter totaled $472 million, including a $409 million expenditure pertaining to delivery of the jack-up Noble Lloyd Noble, resulting in capital expenditures through September 2016 of $592 million, including capitalized interest.
Williams said: “Capital expenditures over upcoming quarters will average significantly below third quarter spending of $472 million, which included the delivery in July of our final rig in the current newbuild program, the high-specification jack-up Noble Lloyd Noble. The rig, which accounted for almost 90 percent of our capital spend in the third quarter, has arrived at its drilling location in the North Sea and is undergoing final acceptance testing.”
Contract drilling services revenue in the third quarter was $373 million compared to $877 million in the second quarter.
The decline in revenue between quarters was driven primarily by a reduction in fleet operating days, an increase in fleet downtime, and lower demobilization revenues. Fleet utilization in the third quarter fell to 59 percent, while average daily revenue declined to $238,900. The results compared to fleet utilization in the second quarter of 65 percent and average daily revenues of $280,900, after adjusting for the impact of the Freeport contract cancellation agreement.
In closing, Williams stated, “Our industry continues to work through a challenging period. However, we expect our business to improve over time, through a combination of further fleet attrition and a rebound in offshore spending by our customers.”
Offshore Energy Today Staff