Noble Corp - A Serious Look At The Company's Backlog After The Last Fleet Status Release

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About: Noble Corporation plc (NE), Includes: ATW, ESV, RDC
by: Fun Trading
Summary

Noble complete Fleet Analysis and Fleet Status as of June 15, 2017.

The Shell portion of the backlog is significant at $1.9 billion now and could eventually reach $2.1 billion depending on the future day rate adjustment.

I have accumulated NE from below $5.50 to as low as $3.87 and I feel quite confident that I made the right midterm choice.

Bildresultat för noble tom prosser

Image: Jack-up Noble Tom Prosser. Courtesy: Offshore Energy today.

Noble Corporation plc (NYSE:NE)

Complete Fleet Analysis and Fleet Status as of June 15, 2017.

1. Class: Drillships

# Name

Spec.

K feet

Contract

End

Current

Day rate

K$

Location

(0-rate)

1

Noble Bob Douglas

2013

10/40

Early 7/17

Early 7/17 - Late 7/17

Early 10/17 - Early 11/17

Available

Undisclosed

Undisclosed

[Murphy - Tullow]

US GoM- Suriname

2

Noble Bully II

2011

8.25/40

Commitment split 50/50 - Joint Venture between Shell and Noble Corp.

5/18

5/18 - Early 4/22

200 [Idle 365 days]

200+ (floor)

[Shell]

Malaysia

3

Noble Don Taylor

2013

10/40 Late 2/19

482

[Shell]

US GoM

15% bonus eligible

4

Noble Globetrotter I

2011

10/40

Mid 7/17

Mid 7/17 - Mid 7/22

436

275+ (floor)

[Shell]

US GoM

15% bonus eligible

5

Noble Globetrotter II

2013

10/40

Late 12/2018

Late 12/2018 - Early 9/2023

185 (idle)

275+ (floor)

[Shell]

Tanzania

15% bonus eligible

2. Class: Semi-Submersibles

# Name

Spec.

K feet

Contract

End

Current

Day rate

$ k

Location
1

Noble Paul Romano

1981/1998

6/25

Early 8/17

128.5

[Hess (NYSE:HES)]

US GoM

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

2

Noble Lloyd Noble

2Q'2016

492/32

Late 11/20

449 (including mobilization revenue)

[Statoil (NYSE:STO)] UKNS

2-year priced option

3

Noble David Tinsley

1981/

2004/2010

300/25

Late 12/17

85

Arabian Gulf

4

Noble Gene House

1981/1998

300/25

Mid 11/18

65

[Aramco (Private:ARMCO)] Arabian Gulf

(30d) 3Q17

5

Noble Hans Deul

2009

400/30

Late 9/17

88

Client has exercised its right to early terminate the contract, with an expected contract end date of late September 2017.

[Shell]

UK

North Sea

6

Noble Joe Beall

1981/2004

300/25

Mid 11/18

65

[Aramco]

Arabian Gulf

(90d) 1Q17

7

Noble Mick O'Brien

2013

400/35

8/17

150

UAE

8

Noble Roger Lewis

2007

400/30

Early 3/17

Early 3/17 - Early 3/22

167

159

[Aramco]

Arabian Gulf

0-rate 1Q'17 (15d)

9

Noble Sam Hartley

2014

400/35

Q4'17 - Q1'18 (See note below)

111

[Total (NYSE:TOT)]

Brunei

10

Noble Sam Turner

2014

400/35

Late 8/18

96.5

[Maersk (OTCPK:AMKAF)]

Denmark

11

Noble Scott Marks

2009

400/30

Early 7/17

Early 7/17 -Early 7/22

167

159

[Aramco]

Arabian Gulf

(30d) 1Q'17

12

Noble Regina Allen

2013

300/25

Mid 7/17

4Q17-1Q18 to 4Q19-1Q20 (up to 2 years)

Accommodation rate Not disclosed (55k/d?)

88.5

[Not disclosed]

UK NS

plus options

[Exxon Mobil (NYSE:XOM)]

Canada

13

Noble Houston Colbert

2014

400/35

mid 7/17

Not disclosed (90k/d?)

[JX Nippon]

Qatar

14

Noble Tom Prosser

2014

400/35

Early 9/17

Early 9/17 - Late 10/17

Available

130

[PTTEP]

Australia

Note: JU Sam Hartley: Original program was for six-well project, with an expected completion of three years. Because the program is running ahead of schedule, the rig could be available late 2017 or early 2018.

Rigs available, ready-stacked or cold-stacked, idle.

# Rig name/shipyard date Type Year built Status Location
1 Noble Clyde Boudreaux (12/15) SemiSub 1987/2007 Warm-stacked Singapore
2 Noble Amos Runner (2/16) SemiSub 1982/1999 Cold-stacked GoM
3 Noble Jim Day (1/16) SemiSub 1989/1999/2010 Cold-stacked GoM
4 Noble Dany Adkins (3/16) SemiSub 1989/1999/2009 Cold-stacked GoM
5 Noble Dave Beard (4/16) SemiSub 1986-2008 Cold-stacked GoM
6 Noble Tom Madden (5/16) Drillship 2014 Warm-stacked GoM
7 Noble Sam Croft (5/16) Drillship 2014 Cold-stacked GoM
8 Noble Bully I (3/17)

Drillship

Commitment split 50/50 - Joint Venture between Shell and Noble Corp.

2011 Cold-stacked US GoM

Noble Fleet Snapshot

Total Drill-ships Semi-subs Jack-ups
Noble Corp. 20 5 1 14
Cold-stacked - Idle - Not contracted 8 3 5 0
Total 28 8 6 14

Backlog Detail:

Noble Corp.'s contract backlog totaled approximately $3.25 billion now.

In $US million.

Note: This is an estimate only. The company is not providing the day rate of a few contracts and the deal with Shell can vary notably on the plus side because I used only the floor day rate in my calculation. [Use it with caution]

Commentary:

Noble Corp. released its June fleet status. Let see what has changed?

1 - The Drillship Bob Douglas got two 1-month contract with Murphy and Tullow. Day rate was not disclosed (<$200k/d?)

2 - The Noble Bully I is now cold stacked while on standby with Shell.

3 - The Jack-up Noble Hans Deul has received an early termination that reduce the contract from 8/18 to 9/17. Backlog loss estimated at $29 million.

4 - The Jack-up Houston Colbert will work 2 more months for JX Nippon until mid-July 2017, in Qatar.

5 - The Noble Sam Hartley is scheduled to end its contract end of 2017 or early 2018 with Total in Brunei, instead of the initial 1/2019.

Conclusion:

The recent fleet status is still showing a survival status quo for the offshore driller still waiting for an elusive recovery. However, Noble corp. Has a solid backlog, well over $3 billion that will help the company to survive this incredible business environment.

The Shell portion of the backlog is significant at $1.9 billion now and could eventually reach $2.1 billion depending on the future day rate adjustment.

Revenues may have bottomed now in the mid $300's million?

Noble weakness is not really fundamental but just circumstantial.

Noble is now trading at an attractive price per share, due to the oil prices situation which is cyclical in nature, not because its business model is flawed. The company is now on a survival mode and the risk of restructuring is quite limited.

It is hard to recommend a buy in this sector though, and I will not. However, I sincerely believe Noble offers a good opportunity for the long-term at this low price per share. Of course, the situation can still worsen and NE can eventually trade in the low $3's.

The recent merger between Ensco (NYSE:ESV) and Atwood (NYSE:ATW) is an important reminder that the offshore drilling industry is entering a new consolidation phase. If you want more information about the Ensco/ATW deal, please click here to read my article.

Noble and Rowan Companies (NYSE:RDC) seem a perfect match in this regard, and will create a strong positive synergy, especially in the jack-up segment. I would not be surprised if NE and RDC decide to merge in an all-share deal.

I have accumulated NE from below $5.50 to as low as $3.87 and I feel quite confident that I made the right midterm choice.

Important note: Do not forget to follow me on the offshore drilling industry. Thank you for your support.

Disclosure: I am/we are long ESV, NE, RDC. 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 own long positions in the offshore drilling sector, but I mainly trade or day trade most of the stocks referenced above.