Bloomberg News

Noble Corp. Rises as Offshore Drilling Improves: Dallas Mover

January 26, 2012

Jan. 26 (Bloomberg) -- Noble Corp., the offshore-drilling contractor building 11 new rigs, rose the most in more than four months after telling analysts that usage and lease rates for its vessels are improving throughout the world.

Noble climbed 1 percent to $35.12 at 12:24 p.m. in New York. Earlier, shares rose as much as 7.6 percent, the most since Sept. 7. The company currently has a fleet of 68 offshore vessels that drill in water ranging from as shallow as 70 feet to more than two miles deep.

Fourth-quarter per-share earnings beat by 1 cent the average of 34 analysts’ estimates compiled by Bloomberg, the Geneva-based company reported in a statement yesterday. The company’s backlog of projects now stands at more than $14.4 billion and several cold-stacked, or idled, rigs returned to service during the fourth quarter, Senior Vice President Roger Hunt said on a conference call today.

“Our industry continues to experience solid signs of recovery in both the shallow- and deep-water sectors,” said Hunt. “Whenever we see cold-stacked rigs re-entering the market, we know it’s a bellwether for better times.”

Higher utilization and dayrates for drilling rigs are expected to work in the company’s favor, Roger Read, an analyst at Morgan Keegan in Houston, who rates the shares “outperform” and owns none, said today in a telephone interview.

“You heard a lot of positives” on the call, said Read. “Dayrates, whether they’re for commodity jackups or hi-spec deep-water, are all trending higher.”

The utilization rate of Noble’s rigs, which measures the days they work by the days they’re available, rose to 79 percent in the final three months of 2011, compared to 77 percent in the third quarter of the year, Chief Financial Officer James Maclennan said on the call.

Oil prices advanced 10 percent to average $94.06 a barrel on the New York Mercantile Exchange in the quarter, up from $85.24 a year earlier. The average number of active oil and natural-gas rigs around the world rose 15 percent in the final three months of the year to 3,676, Baker Hughes Inc. data show.

--Editors: Jasmina Kelemen, Jessica Resnick-Ault

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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