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Noble Corp (NE) - 1/18/11 Fleet Status Report Commentary

|Includes: Noble Corporation plc (NE)

Noble released its first fleet status report for 2011. Compared to the November report, there have been many changes made. The two most important sections that long-term oriented investors should focus their attention to is (1) the Gulf of Mexico Semisubmersibles and (2) the Newbuilds. The Gulf of Mexico rigs are ready to drill and bring the high profit margins back to the company, once the Obama Administration allows drilling to resume. No one knows exactly when this will occur, but I am not too worried about this nagging nuisance. Most of the company's profitability is tied up in the Gulf, so it will be glorious day when normal operating conditions return. However, one of the best developments is the Newbuild situation. On the fleet status report, the company list includes five new Drillships along with two new Jackups. In conjunction with the latest Shell Newbuild, the company announced the construction of a sixth new Drillship. All eight of these state-of-the-art Newbuilds will create massive shareholder value down the road. If CEO David Williams and the rest of management believe that there should be even greater demand in the future, the company can also exercise one or more of its options to build additional Drillships/Jackups. While the Gulf of Mexico continues to cast a dark cloud over Noble's short-term profitability, the long-term earnings picture has never looked better. Even with the warm and cold stacking of many older Jackups in the fleet, investor focus should be centered on the high dayrate/margin Newbuilds that will be actively drilling in the next few years. It is not too late to invest in this great long-term story that is supported by a great enterprise and shareholder oriented management!