Noble Rig Downtime Impact Earnings as Gulf Activity Ramps Up after Isaac

Operators continue to inspect platforms and facilities and redeploy workers as they ramp oil and gas activity in the Gulf of Mexico following Hurricane Isaac.

Workers remain evacuated from 10 production platforms, or 1.68 percent, of the 596 manned platforms in the U.S. Gulf, and workers remain evacuated from one out of the 76 rigs currently operating in the Gulf, the Bureau of Safety and Environmental Enforcement (BSEE) reported Thursday.

Approximately 42.98 percent of current Gulf oil production and approximately 21.28 percent of Gulf natural gas production are still shut in, BSEE reported.

Noble Corp. reported Tuesday that its third quarter earnings will be negatively impacted due to downtime and delays for rigs returning to work. The company expects to record an expense of approximately $50 million due in part to standby rates for several of its rigs in the U.S. Gulf due to Hurricane Isaac.

Noble had suspended operations on its seven active rigs operating in the U.S. Gulf due to Hurricane Isaac. These rigs sustained no damage due to the storm, the company said. Each unit was operating at reduced day rates of 90 to 95 percent of their operational rates for one week due to Isaac. Crews have been redeployed to these rigs and operations have been restarted.

The company has faced delays in returning some of its other rigs to work. The Noble Globetrotter I (UDW drillship), also located in the U.S. Gulf, has experienced a higher than expected amount of downtime and reduced day rate due to the ongoing commissioning and testing on the rig's subsea blowout preventer (BOP) and control system.

Globetrotter I will stay at reduced day rate until all outstanding BOP testing and commissioning is complete; this is expected to occur by the end of the third quarter.

The rig Noble Max Smith (DW semisub), which is undergoing a planned shipyard program in Pascagoula, Miss., may experience 30 to 40 days of unpaid downtime due to delays in the rig's mobilization to Brazil.

Noble's rigs Noble Dave Beard (UDW semisub), Noble Leo Segerius (DW drillship) and Noble Phoenix (DW drillship) have faced delays in returning to work in Brazil following shipyard programs, due in part to a slowdown in the issuance of regulatory approvals by Brazilian authorities. The company expects to receive these approvals by the end of this year's third quarter.

The Noble Duchess (mid-water drillship) and Noble Charles Copeland (280' ILC), which are working offshore India and in the Middle East, have also experienced longer-than-planned delays in the third quarter due to maintenance and delays. The Charles Copeland was delayed due to a fire at a shipyard, said Noble President and CEO David Williams at the Barclays CEO Energy Power Conference Wednesday in New York. Noble Duchess resumed work on Aug. 30, while the Noble Charles Copeland is expected to begin its three-year contract in the Middle East on Oct. 1.

Due to the downtime, delays and standby rates, Barclays Capital has adjusted its 2012 earnings per share (EPS) estimate for the company to $2.80 from $2.90. Barclays did raise the company's EPS for 2013 to $4.35 from $4.30 on news that the jackup Noble Hans Deul (400' ILC) had been awarded an 18-month extension from Shell.

Noble Hans Deul is working for Shell in the UK North Sea. Under the extension, which would begin in February 2013, the rig would earn a day rate of $242,500, up from the rig's current day rates of $175,000.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit www.riglogix.com.
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Technician, Pipeline Trainee (Crude) (Midland, TX)
Expertise: Instrumentation Technician
Location: Midland, TX
 
United States Kilgore: Service Specialist I - Service Tools
Expertise: Instrumentation Technician
Location: Kilgore, TX
 
United States Hebbronville: Treater Driver-MultiChem, III
Expertise: Heavy Machinery Operator|Truck / HGV Driver
Location: Hebbronville, TX
 
search for more jobs

Brent Crude Oil : $54.33/BBL 0.81%
Light Crude Oil : $51.5/BBL 1.29%
Natural Gas : $3.75/MMBtu 1.35%
Updated in last 24 hours