A contract drilling service provider,
) has signed a drilling accord with
Anadarko Petroleum Corporation
) for Noble's new ultra-deepwater drillship -- Noble Bob
The drillship -- currently under construction at Hyundai Heavy
Industries Co. Ltd.'s ("HHI") shipyard in Ulsan, South Korea on a
fixed price basis -- is scheduled to come online by year-end 2013.
It is expected to be utilized primarily for operations in the U.S.
Gulf of Mexico (GoM).
Geneva-based Noble said that the Hyundai Gusto P10000 hull
designed unit will operate in up to 12,000 feet under water, but
will be delivered fully equipped to operate in up to 10,000 feet of
water. It will also be well prepared to handle two complete blowout
preventer systems with a 165 ton heave-compensated construction
crane and accommodation for 210 people.
This latest contract will come online after the rig is moved to
an initial operating location, pending customer approval. The
three-year deal is likely to generate $677 million of revenues in
total and includes the provision of higher operating costs.
Leasing the Noble Bob Douglas to Anadarko leaves Noble with two
of its four ultra-deepwater drillships, under construction at HHI,
under contract. The remaining two drillships that remain
uncontracted are scheduled to be delivered in 2014.
Last quarter, Noble's performance was fueled by solid demand for
its wide range of rigs and vessels. The highlights of the quarter
include improvement in business fundamentals (as utilization and
tendering activity improved for both jackups and deepwater units)
and the return of several rigs to active status.
With continued increases in tender activity, as well as the
influx of positive contracts globally, management remains
optimistic about the broader recovery in jackup and floating rig
demand led by the North Sea, Mexico and the Middle East. Noble is
favorably positioned to gain from increasing dayrates with about
77% of floating rig days and 75% of jackup rig days committed in
However, considering the risks associated with offshore
drillers, including the lack of pricing power, and geopolitical
risks associated with international operations and operational
challenges, we prefer to remain on the sidelines.
We maintain our Neutral recommendation for the long term. Noble
holds a Zacks #3 Rank that is equivalent to a short-term Hold
ANADARKO PETROL (APC): Free Stock Analysis
NOBLE CORP (NE): Free Stock Analysis Report
To read this article on Zacks.com click here.