Offshore drilling contractor Noble Corporation has secured more work for its drilling rigs, including a conditional award for four of its drillships working for ExxonMobil in Guyana. Looking ahead, the rig owner expects significant sequential growth in the upcoming two quarters with a continued upward trajectory in activity levels and day rates.

Noble Corp. on Wednesday published its latest fleet status report in conjunction with its report for the fourth quarter and full-year 2021 results. As detailed in the report, Noble booked revenues of $208 million in the last quarter of the year compared to $250 million in the third quarter. The company’s profit came up to $123 million from a loss of $24 million in the previous quarter.

Jack-up rigs

In the fourth quarter, the Noble Regina Allen was awarded a one-well contract by Repsol for work in Guyana which is expected to begin in May 2022.

In Australia, Santos exercised three of their nine one-well options for directly continuous work with the Noble Tom Prosser. Santos hired the Noble-owned jack-up in March 2021 and the rig has recently started drilling the Pavo-1 well in the Bedout Basin offshore Australia.

Furthermore, the Noble Lloyd Noble began its contract in Norway with Equinor, who has now exercised three of its twelve one-well options, pushing the end date to February 2023.

Ahead of the contract, the rig was modified to further reduce its carbon footprint through the addition of a selective catalytic reduction system and switchboard upgrades required for peak shaving, which allows for fewer engines to run at higher efficiency, and connection to shore power.

Also during the quarter, the Noble Hans Deul jack-up underwent leg repair work in the UK and returned to the Southwark field for IOG.

The previously announced sale of Noble’s four jack-ups in Saudi Arabia was completed in November 2021 and the company is providing transitional services to the buyer for a short duration.

Floaters

The Noble Faye Kozack drillship, formerly known as Khamsin, was awarded a three-well contract by QuarterNorth Energy for drilling in the U.S Gulf of Mexico. The contract is expected to start in April 2022 at a day rate of $240k per day for the first 50 days and $290k per day for the remainder of the contract. The contract also includes three one-well options priced at $290k per day or $310k per day subject to oil price thresholds.

Also in the U.S Gulf of Mexico, Murphy E&P exercised the first two of five one-well options for the drillship Noble Stanley Lafosse, formerly Sharav. Those two exercised options are priced at $300k per day and will start in direct continuation of the current contract.

Earlier this week, Noble’s rival driller Transocean also revealed new contracts for its fleet, reporting improving day rates for some of the rigs. For example, the Deepwater Asgard drillship secured a two-well contract in the U.S. Gulf of Mexico at $395,000 per day. The rig’s day rate has been increased with this contract as the previous one was $100,000 lower. Before that, the rig’s day rate with Beacon was $240,000 in the period between July-Sep 2021 and $280,000 from September till October 2021.

Returning to Noble’s rig, the Noble Gerry de Souza, formerly Santa Ana, is currently completing an out-of-service period in Las Palmas following its multi-year contract with Petronas in West Africa. The rig is being upgraded with an MPD system and a second BOP and is preparing to mobilize to Suriname for its next contract with APA Corp, which will run from March till May 2022. The contract also includes two one-well options.

Noble also announced a conditional award under the Commercial Enabling Agreement (CEA) with ExxonMobil, which includes approximately 7.4 years of additional contract term and reallocates all existing terms evenly across the four rigs in Guyana. The rigs in question are Noble Tom Madden, Noble Sam Croft, Noble Bob Douglas, Noble Don Taylor.

Noble Corp.
Source: Noble Corp.

The additional contract term is subject to government approvals and final project sanction for the Yellowtail development project. The Field Development Plan and Environmental Impact Assessment for the Yellowtail project have already been submitted for government and regulatory review. Once finalized, the conditional award will extend the contracted term into the fourth quarter of 2025.

Upward trajectory in activity & day rates

Noble Corp. expects meaningful sequential growth in its quarterly financials over the coming two quarters.

The first quarter of 2022 will benefit from a full period contribution from the Noble Lloyd Noble as well as resumed operations on the Noble Globetrotter II and Noble Hans Deul. Subsequently, the second quarter will also benefit from a full period contribution of the improving ultra-deepwater day rates for four drillships in Guyana as well as a full period contribution from the Noble Gerry de Souza in Suriname.

Robert W. Eifler, President and Chief Executive Officer of Noble Corporation, commented: “Following a significant improvement in the UDW market in 2021, the industry outlook remains positive with a continued upward trajectory in activity levels and day rates. Forward indicators for both ultra-deepwater and ultra-harsh jack-up markets continue to strengthen as we see customers respond to improving commodity prices.”

At the end of December 2021, the company’s estimated revenue backlog totalled approximately $1.2 billion, excluding the conditional award of 7.4 rig years under the CEA which is subject to government approvals.

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