Rig impairments drag Noble deeper into red

Drilling contractor Noble Corporation posted a bigger loss for the fourth quarter 2016, compared to the year-before period, due to rig impairment charges. 

For the fourth quarter of 2016, the company on Thursday reported a net loss attributable to Noble Corporation of $1.3 billion, on revenues of $410 million. For the fourth quarter of 2015, Noble reported a net loss of $152 million, on revenues of $858 million.

Noble explained that the fourth quarter 2016 results included a charge totaling $1.3 billion relating to the impairment of five rigs and certain other capital spares. The results also included gains totaling $32 million relating to the extinguishment of debt, a contract termination lump sum settlement and a discrete tax item.

During the fourth quarter, the company recognized partial impairments for the semi-submersible rigs Noble Dave Beard, Noble Amos Runner and Noble Clyde Boudreaux, while full impairments were taken for the semi-submersible rigs Noble Max Smith and Noble Homer Ferrington. Both rigs have been retired from service, reducing the company’s floating rig fleet to 14 units.

Excluding the impact of the after-tax items, the net loss attributable to Noble Corporation for the fourth quarter of 2016, would have been $37 million, on revenues of $394 million.

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation, stated, “Cost management initiatives implemented throughout the year, along with a reduction in fleet operating days, drove fourth quarter operating costs down by 15 percent compared to the previous quarter, with costs down almost 30 percent year-over-year. Improved performance in our jack-up rig fleet was another noteworthy accomplishment in the quarter, including the commencement of operations on the Noble Lloyd Noble.”

The driller’s contract drilling services revenue in the fourth quarter of 2016 totaled $401 million, or $385 million adjusted for a $16 million contract termination lump sum settlement for the jack-up rig Noble Tom Prosser.

Utilization of the company’s fleet improved to 62 percent in the fourth quarter compared to 59 percent in the previous quarter, while average daily revenues were largely unchanged from the third quarter at $238,700.

Contract drilling services costs in the fourth quarter continued the downward trend seen throughout 2016, declining 15 percent to $177 million compared to $207 million in the previous quarter. The decline resulted from lower costs associated with stacked rigs, administrative and field support, repair and maintenance and rig retirements. These factors were partially offset by higher costs pertaining to commencement of operations on two rigs.

At December 31, 2016, the company’s contract backlog totaled $3.3 billion. An estimated $2.3 billion of the backlog total relates to the floating rig fleet and $1 billion to the jack-up rig fleet.

Williams further said: “Our industry continues to experience weakness, but Noble’s strong base of revenue, which totals more than $1.0 billion in 2017, along with further reductions in contract drilling costs and capital expenditures, should result in another year of positive free cash flow.”

He added: “Also, it is not too early to turn an eye toward industry recovery.”

Share this article

Follow Offshore Energy Today

Events>

<< Jul 2019 >>
MTWTFSS
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31 1 2 3 4

Uganda International Oil and Gas Summit 2019

Uganda International Oil & Gas Summit will once again examine the industry’s developments…

read more >

8th OIL & GAS AFRICA 2019 CONFERENCE

OIL & GAS AFRICA is one of the most prime regional & international Oil and Gas conferences in East Africa…

read more >

Gas Indonesia Summit 2019

Gas Indonesia Summit & Exhibition is returning for the fourth edition in Jakarta…

read more >

Shanghai Int Petrochemical and Offshore Oil & Gas and Chemical Industry Technology and Equipment Exhibition 2019

cippe Shanghai has attracts both…

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply