Noble Corp. - Complete Fleet Analysis As Of April 14, 2016, And Commentary

| About: Noble Corporation (NE)

Summary

Noble released its fleet status as of April 14, 2016. Backlog estimated is $6.3 billion which is impressive.

Another depressing FSR with only one 2-year contract extension at a dismal dayrate of $88k/d from $235k/d with Shell in UK.

This is survival at its finest. The industry needs higher oil prices soon. All eyes are turned to Doha - Qatar.

Source: Drillship Noble Bob Douglas

Noble Corporation PLC. (NYSE:NE)

This article is an update of my preceding article published on March 11, 2016, about the March fleet status.

Complete Fleet Analysis and Fleet Status as of April 14, 2016.

1. Class: Drillships

# Name

Spec.

K feet

Contract

End

Current

Day rate

K$

Location

(0-rate)

1

Noble Bob Douglas

2013

10/40 Mid 2/17

636

Day rate includes mob. fee

[Anadarko]

GOM

2

Noble Bully I

2011

8.2/40 Mid 3/17

491

[Shell]

GOM

5-Y survey 9/16

1Y priced option

3 x 1Y option unpriced

3

Noble Bully II

2011

8.25/40

Early 4/22

456

[Shell]

Brunei

4

Noble Don Taylor

2013

10/40 Late 2/19 475

[Shell]

US GOM

15% bonus eligible

Decline in day rate due to reduction in crewing level as requested by client

5

Noble Globetrotter I

2011

10/40 Mid 7/22 436 (For 1st 5 years)

[Shell]

US GOM 15% bonus eligible

6

Noble Globetrotter II

2013

10/40

In transit

Early 9/23

491 (Fixed for first 5 years)

[Shell]

Congo

15% bonus eligible

Decline in day rate due to reduction in crewing level as requested by client

7

Noble Sam Croft

2014

10/40

Late 7/17

635 Started 11/21/14

Day rate include mob. fee

[Freeport-McMoran]

US GOM

Decline in day rate due to reduction in crewing level as requested by client

8

Noble Tom Madden

2014

10/40 Late 11/17

641

Day rate include mob. fee

[Freeport-McMoran]

US GOM

Decline in day rate due to reduction in crewing level as requested by client

2. Class: Semi-Submersibles

# Name

Spec.

K feet

Contract

End

Current

Day rate

$ k

Location
1

Noble Dave Beard

1986/2008

10/35 Late 4/16 235

[Petrobas]

Brazil

15% bonus

eligible

2

Noble Paul Romano

1981/1998

6/25

Mid 9/16

304

[Hess]

USGOM

4. Class: Jack-Ups

# Name

Spec.

Feet/K feet

Contract

End

Current

Day rate

Location
1

Noble Alan Hay

1980/2005

300/25

Late 12/17

85

Arabian Gulf

0-rate 2Q'16(60d)

2

Noble Lloyd Noble

2Q'2016

($460 million final payment)

492/32

3Q'16

3Q'16-4Q'16

Early 4Q'16 - Early 4Q'20

Transit

Acceptance testing

447 (including mobilization revenue)

[Statoil] UKNS
3

Noble David Tinsley

1981/

2004/2010

300/25

Late 12/17

85

Arabian Gulf

4

Noble Gene House

1981/1998

300/25

1/16 - 12/16

12/16 - Mid 11/18

65

TBD

[Aramco] Arabian Gulf
5

Noble Hans Deul

2009

400/30

Early 8/16

Early 8/16 - Early 8/18

235

88 ("1")

[Shell]

UK

North Sea

6

Noble Houston Colbert

2014

400/35

Early 4/16

Early 4/16- Early 6/16

243

175

[Total] Argentina

2-months priced option

7

Noble Joe Beall

1981/2004

300/25

1/16 - 12/16

12/16 - Mid 11/18

65

TBD

[Aramco] Arabian Gulf

8

Noble Mick O'Brien

2013

400/35

Shipyard

5/16 - 6/17

Available

150

UAE

9

Noble Roger Lewis

2007

400/30

1/16-12/16

12/16 - Early 3/17

167

TBD

[Aramco] Arabian Gulf

0-rate 4Q'16(30d)

10

Noble Sam Hartley

2014

400/35

Mid 1/19

111

[Total]

Brunei

11

Noble Sam Turner

2014

400/35

Late 6/16

Late 6/16 -8/18

197

96.5

[Maersk]

Denmark

12

Noble Scott Marks

2009

400/30

1/16-12/16

12/16 - Early 7/17

167

TBD

[Aramco] Arabian Gulf

(30d)4Q'16

13

Noble Tom Prosser

2014

400/35

Early 4/17

203

[Apache

Quadrant En.]

Australia

("1") Client has the right to early terminate the contract for convenience subject to a notice period and, in some circumstances, a retroactive dayrate adjustment

Rigs available, ready stacked or cold stacked, idle.

# Rig name/shipyard date Type Year built Status Location
1 Noble Homer Ferrington (1/14) SemiSub 1985/2004

Cold Stacked/shipyard

Italy
2 Noble Max Smith (10/14) SemiSub 1980/1999 Preparing for cold stacked Singapore
3 Noble Regina Allen (12/15) JU 2013 Warm Stacked Denmark
4 Noble Clyde Boudreaux (12/15) SemiSub 1987/2007 Warm stacked Singapore
5 Noble Amos Runner (2/16) SemiSub 1982/1999 Cold stacked GoM
6 Noble Jim Day (1/16) SemiSub 1989/1999/2010 warm staked GoM
7 Noble Dany Adkins (3/16) SemiSub 1989/1999/2009 Warm stacked GoM

The Company has decided to retire the drillship Noble Discoverer and the jackup Noble Charles Copeland, reducing its fleet count to 30 units.

Noble Fleet Snapshot

Total Drill-ships Semi-submersibles Jack-ups
Noble Corp. 24 8 2 13
Cold-stacked - Idle - Not contracted 7 0 6 1
Total 30 8 8 14

Backlog Detail:

Noble Corp. can be proud of its impressive contract backlog totaling approximately $6.96 billion in February 2016. Assuming new day rate for the JU working for Saudi Aramco and a lump sum for the Discoverer, my Backlog estimate as of 4/15/2016 is $6.3 billion. Details are below per Rig:

Rig 4/15/2016 $ m
Noble Bob Douglas 191
Noble Bully I 162
Noble Bully II 982
Noble Don Taylor 489
Noble Globetrotter I 981
Noble Globetrotter II 1223
Noble Sam Croft 295
Noble Tom Madden 369
Noble Discoverer 110
Noble Dave Beard 1
Noble Paul Romano 45
Noble Alan Hay 53
Noble Lloyd Noble 644
Noble David Tinsley 53
Noble Gene House 62
Noble Hans Deul 92
Noble Houston Colbert 16
Noble Joe Beall 61
Noble Mick O'Brien 49
Noble Roger Lewis 51
Noble Sam Hartley 111
Noble Sam Turner 96
Noble Scott Marks 76
Noble Tom Prosser 74

Commentary:

Noble Corp., released its April fleet status yesterday, and I noticed some changes:

  1. The JU Noble Hans Deul was awarded a 2-year contract extension with Shell in the UK at a reduced day rate of $88k/d starting in August 2016. The actual contract ends early August 2016 at a day rate of $235/d. Also, Client has the right to early terminate the contract for convenience subject to a notice period and, in some circumstances, a retroactive dayrate adjustment.
  2. The semi-submersible Danny Adkins is now warm stacked since mid-March.
  3. Minor changes in dayrates for the two UDW actually on standby in GoM for Freeport-McMoran. The UDW Noble Tom Madden and UDW Noble Sam Croft. The note indicates: Dayrate adjustment due to decline in operating costs corresponding to the reduction in crewing levels as requested by Client.
  4. Minor changes in dayrates for the 4 UDW working for Shell: The Noble Don Taylor, Noble Bully I, Noble Globetrotter I and Noble Globetrotter II. The note indicates: Dayrate adjustment due to decline in operating costs corresponding to the reduction in crewing levels as requested by Client. This is more concerning because it may lead to renegotiation or even termination later?
  5. The JU Noble O'Brien expected to commence on 5/16 to 6/17 NDC-UAE.
  6. Noble has 4 JUs working for Saudi Aramco. The dayrate is fixed (no change) for 2016. Noble Gene House $65k/d, Noble Joe Beall $65k/d, Noble Roger Lewis $167k/d, Noble Scott Marks $167k/d. We will have to expect the same negotiation next year. Noble said: Company anticipates further discussions with the Client at the conclusion of 2016 to determine the dayrate over the remaining contract term.
  7. No change for the newbuild JU Noble Lloyd Noble:

In short, another depressing FSR with 2-year contract extension at a dismal dayrate of $88k/d from $235k/d with Shell in UK.

The situation is totally unbelievable, and offshore drillers are accepting dayrates that are barely above the breakeven level. This is survival at its finest.
However, I have noticed recently that oil prices were getting some positive momentum lately, and now brent is trading well over $40 per barrel. The Doha meeting in Qatar will take place this Sunday, April 17, 2016.

Major oil players will be gathering to discuss a potential production freeze on Sunday, April 17, in Doha, Qatar, in what some analysts have called "the most important meeting of the last three decades."

Analysts have been hoping for a coordinated move ever since mid-February, when Saudi Arabia, Russia, Venezuela, and Qatar agreed to freeze production at January levels if other producers joined in.

Depending on the negotiation, we could see a steady rise in oil to $50 per barrel in a few months, which will help tremendously the offshore drilling industry. However, even if the price of oil can reach an acceptable level, to allow O&G companies to contract again, it will take at least 6 months to see some green shoots appearing slowly and dayrate will not be much higher until 2017. Thus, it is important to look at the contract backlog to decide which offshore driller could be a good investment in this segment.

I believe NE is a good candidate.

Disclosure: I am/we are long NE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I have a small long position. I trade NE regularly.