Noble Corp. Reports Second Quarter Earnings of $392MM
Noble Corporation reported second quarter 2009 earnings of $392 million, or $1.49 per diluted share, versus earnings of $376 million, or $1.39 per diluted share, for the second quarter of last year. The results for the second quarter 2009 include a net after-tax charge of $0.05 per share related to expenses associated with the Noble David Tinsley, which was damaged as a result of the previously disclosed "punch-through" event that occurred as the unit was being positioned on location offshore Qatar.
Contract drilling services revenues for the second quarter 2009 were $868 million, up 10.8 percent from the second quarter 2008. Contract drilling margins for the second quarter 2009 were approximately 71 percent, generating $451 million in net cash provided by operating activities. Noble invested $275 million in capital projects during the quarter. Debt as a percentage of total capitalization declined slightly to 11.0 percent at June 30, 2009, from approximately 11.7 percent at March 31, 2009.
"Despite continued turbulence in global markets, Noble's focus on operational excellence enabled us to deliver another outstanding quarter," said David W. Williams, Chairman, President and Chief Executive Officer. "Costs are under control, our safety performance has been excellent, and despite having a number of jackup units available in the Middle East and West Africa, our contract drilling margins remain strong."
Three of the Company's deepwater drilling units moved to higher dayrates during the quarter. In the U.S. Gulf of Mexico, the Noble Clyde Boudreaux's dayrate increased to $605,000 from $244,000. In the Mediterranean Sea, the Noble Homer Ferrington began its three-year contract in Libya with ExxonMobil at a dayrate of $537,000, an increase from its previous contracted dayrate of $434,000. In Brazil, the Noble Muravlenko commenced its six-year contract with Petrobras at a dayrate of $290,000, exclusive of a potential 15 percent performance bonus. The previous dayrate for this unit was $120,000, also exclusive of a 15 percent performance bonus.
Also in Brazil, the Company reached an agreement with Petrobras regarding late delivery penalties on the 10,000 foot dynamically positioned deepwater semisubmersible Noble Dave Beard. Under the terms of the agreement, Noble will provide additional capital equipment on the unit for Petrobras' use. In exchange, the delivery date for the unit has been reset to October 2009. Since the unit is expected to begin work under the contract at the end of 2009, the Company may still incur a penalty. The penalty amount would be reflected as a reduction in dayrate over the five-year contract and we expect the impact on the contracted dayrate of $220,000 to be immaterial.
During the quarter, the last of the Company's three newbuild jackups, the Noble Scott Marks, commenced mobilization from the shipyard in Dalian, China to the North Sea. The unit is expected to begin its two-year contract with Venture Production at a dayrate of $210,000 during the third quarter 2009.
Finally, in Nigeria, the Company signed a contract extension on the Noble Ed Noble, a 250 foot independent leg cantilever jackup, with ExxonMobil at a dayrate of $115,000. The 213-day contract is subject to a 30-day notice of cancellation by either party.
"Looking ahead, we do not expect the near-term contracting environment to change significantly despite the gradual recovery we are seeing in crude prices," said Williams. "However, every day that crude prices stay at a reasonable level or continue to improve builds confidence in our future. Our backlog is at a very healthy level and we continue to exercise discipline on the cost side. At the same time, we are making investments to improve the reliability and performance of our fleet. Our strong balance sheet and customer base allow us to add capacity when attractive opportunities come along that meet our disciplined investment process. Investors can count on us to act prudently as we confront this difficult climate and remain focused on increasing value now and when the economy improves."
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