Noble Sails Out of Third Quarter with $383MM
Noble Corporation has reported third quarter 2008 earnings of $383 million, or $1.43 per diluted share, versus $318 million, or $1.18 a share, for the third quarter of last year. Per-share earnings were up 21 percent from the third quarter of 2007 and up 2 percent from the second quarter of 2008.
The results for the 2008 third quarter include net after-tax charges of $0.04 per share primarily related to losses incurred as a result of Hurricanes Gustav and Ike and, to a lesser extent, expenses related to the ongoing independent investigation of its Nigerian operations.
Contract drilling services revenues for the 2008 third quarter were $835 million, up 16 percent from the year-earlier quarter. Contract drilling margins for the third quarter 2008 were approximately 70 percent, generating $396 million in net cash provided by operating activities. The Company invested $355 million in capital projects during the quarter, which includes $88 million related to the recently announced construction of an ultra-deepwater Globetrotter-class drillship, bringing the year-to-date total to $880 million. Debt as a percentage of total capitalization declined to 12.8 percent at September 30, 2008, from approximately 13.1 percent at the end of the second quarter.
"In spite of the volatility in the broader markets, including product prices, our business remains robust and we continue to deliver great results," said David W. Williams, Chairman, President and Chief Executive Officer. "Our backlog is unprecedented, our costs are under control and the breadth and strength of our customer base provide a solid foundation for us to continue to generate positive results in the months ahead."
During the third quarter, Noble spent around $260 million to repurchase approximately 5.4 million shares. Year-to-date, we have repurchased approximately 6.0 million shares for a total cost of about $290 million. We have 20.3 million shares remaining on our repurchase authorization.
Earnings for the first nine months of 2008 totaled $4.26 per diluted share compared with $3.19 per diluted share in the same period last year. Contract drilling services revenues were $2.4 billion and earnings were $1.1 billion in the first nine months of 2008, up 24 percent and 33 percent, respectively, from the year-earlier period.
During the third quarter 2008, Noble's North Sea fleet saw the Noble Piet van Ede's contract extended throughout the remainder of 2009 at a dayrate of $212,000. The Noble Lynda Bossler was extended until October 2009 at a dayrate of $220,000 and the Noble Julie Robertson was awarded a one year contract beginning in the third quarter of 2009 at a dayrate of $212,000. This recent contract activity reinforces our belief that the North Sea market will remain tight throughout 2009 for both jackups and semisubmersibles. Contract activity in West Africa during the third quarter included a five month extension at $160,000 per day for the Noble Lloyd Noble.
In Mexico, the Noble Carl Norberg was awarded a 731 day contract that included a mobilization fee and an initial dayrate of $155,000. The work is expected to begin in early 2009 following the rig's mobilization from West Africa. Also in Mexico, the Noble Max Smith, a 7,000' deepwater semisubmersible, commenced its three year contract on August 1, 2008 at a dayrate of $484,000 and the jackup Noble Tom Jobe began its 1,217 day contract on August 7, 2008 at an initial dayrate of $155,000. In the U.S. Gulf of Mexico, we have executed a two year term contract for the Noble Paul Romano at $605,000 per day, to commence during the first quarter 2010. The Noble Amos Runner, Noble Paul Romano and Noble Lorris Bouzigard have all been repaired following damage from Hurricane Ike and returned to work as of October 9.
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