Offshore driller Noble Corporation narrowed its net loss in the fourth quarter 2017 helped by lower drilling services costs but its revenues decreased during the period.
The driller on Wednesday posted a net loss attributable to the company for the fourth quarter of 2017 of $25 million on revenues of $330 million. Hit by impairment charges, in the fourth quarter of 2016, Noble recorded a loss of $1.3 billion on revenues of $410.2 million.
The results in 4Q 2017 included net favorable items totaling $47 million, including payments totaling $38 million accounted for in contract drilling services revenues; non-cash gains totaling $121 million; and a non-cash charge totaling $122 million relating to the impairment of certain rigs.
Contract drilling services revenues for the fourth quarter of 2017 totaled $321 million, which included payments totaling $38 million relating to the Noble Bully II and Noble Jim Day rigs.
Excluding those payments, contract drilling services revenues in the fourth quarter would have been $283 million, compared to $260 in the third quarter. The nine percent improvement was due primarily to higher revenues from the floating rig fleet. These items were partially offset by a modest decline in fleet operating days.
Contract drilling services costs in the fourth quarter totaled $153 million compared to $165 million in the previous quarter, or $151 million excluding a $14 million charge resulting from damage to two cold-stacked semi-submersibles during Hurricane Harvey. In 4Q 2016, Noble’s costs totaled $176.8 million.
During the fourth quarter, the company entered into a new, five-year unsecured credit facility with total borrowing capacity of $1.5 billion and a maturity of January 2023.
The company’s total debt at the end of 2017 was $4 billion compared to $4.3 billion at December 31, 2016.
Utilization in the fourth quarter of the company’s floating rig fleet, consisting of eight drillships and six semi-submersibles, improved to 41 percent compared to 39 percent in the previous quarter of 2017. The improvement was due primarily to an increase in operating days on the Noble Bob Douglas following the contract start in November in the U.S. Gulf of Mexico.
Utilization in the fourth quarter of the company’s 14 jack-ups was 76 percent compared to 81 percent in the preceding quarter. The completion of contracts during the quarter on the Noble Mick O’Brien and Noble Houston Colbert contributed to the lower utilization level while these events were partially offset by the commencement in September of a contract for the Noble Tom Prosser offshore Australia.
Improving opportunities ahead
Looking ahead, Julie J. Robertson, Chairman, President and Chief Executive Officer of Noble Corporation, said: “The steady rise in crude oil prices since June 2017 and significant progress to date by our customers in reducing offshore project costs are, in part responsible for a growing number of offshore opportunities as project planning intensifies and new programs commence.
“Although the market for offshore rigs remains highly competitive, we are confident that a demonstrated preference by customers for premium, high-specification jack-ups and floating rigs with highly qualified crews will continue, leading to improving opportunities across our premium fleet in 2018.”