Noble Corp. today reported Q4 2013 net income of US$174 million, and for Q3 2013, the company reported net income of $282 million. Net income for the full year 2013 totaled $783 million, on revenues of $4.2 billion, compared to net income of $522 million on revenues of $3.5 billion in 2012.
Addressing the company's achievements in the fourth quarter of 2013, David W. Williams, Chairman, President and Chief Executive Officer of Noble Corp. stated: "Contract drilling revenues continued to grow during the fourth quarter with full or partial contributions from three new ultra-deepwater drillships and the first of our six JU3000N high-specification jackups.
"Building on an exceptional quarter and year of execution in the shipyard, we also saw the delivery of two more JU3000N jackups – the Noble Regina Allen in December, followed by the Noble Houston Colbert in early 2014. These fleet additions, along with the remaining six projects, of which five rigs are expected to complete construction in 2014, are redefining our company, creating a premium fleet of offshore drilling rig."
The Noble Houston Colbert jackup drilling rig, pictured at right, was delivered this month; photo courtesy Noble Corp.
Another achievement during Q4 was the progress made toward Noble's planned divestiture of substantially all of the standard capability assets in its fleet.
Contract drilling services revenues for Q4 2013 of $1.12 billion improved by $84 million, or 8% above Q3, due primarily to a 9% increase in average dayrates to $212,000 compared to $194,600 in Q3.
Operating days declined slightly during Q4, due in part to an increase in idle and shipyard days, particularly among rigs in the Middle East region, partially offset by the commencement of operations on the ultra-deepwater drillship Noble Bob Douglas and the high-specification jackup Noble Mick O'Brien, and a full quarter of operations from the ultra-deepwater drillships Noble Don Taylor and Noble Globetrotter II, which began operations during Q3.
The addition of these new rigs contributed to a $74 million increase in contract drilling operating costs in Q4 to $560 million, compared to $486 million in Q3. Contract drilling margin for Q4 was 50.2%, compared to 53.3% in Q3
Operating highlights
Total contract backlog at December 31, 2013 was approximately $15.4 billion compared to $16.2 billion at September 30, 2013.
During Q4 2013, utilization of the company's floating rig fleet (semisubmersibles and drillships) was 84% compared to 79% in Q3. Excluding the impact of two cold stacked floaters, utilization in Q4 would have been 91% compared to 86% in Q3. The increase for the quarter primarily relates to the return to service of the semisubmersible Noble Homer Ferrington, which spent the majority of the quarter operating under a short-term contract in the Eastern Mediterranean following an idle period, and the drillship Noble Roger Eason, which in December returned to work offshore Brazil following the completion of a shipyard program. Average daily revenues in the floating rig fleet were $378,400 in Q4, or an improvement of approximately 3% from $369,100 in Q3, reflecting the commencement of operations on the ultra-deepwater drillship Noble Bob Douglas and a full quarter of operations on the Noble Don Taylor and the Noble Globetrotter II.
Q4 2013 utilization of the company's jackup rig fleet was 86%, compared to 94% in Q3. The decrease primarily relates to fewer operating days on the Noble Roy Rhodes, the Noble Roger Lewis, the Noble David Tinsley and the Noble Gene Rosser which is expected to be sold during Q1 2014. The decrease in utilization was partially offset by a 3% improvement in average daily revenues during the quarter to $115,700 from $112,400 during Q3.
At the end of Q4 2013, approximately 73% of the Company's available rig operating days were committed for 2014, including 78% of the floating rig days and 75% of the jackup rig days. For 2015, an estimated 44% of the available rig operating days were committed, including 61% and 38% of the floating and jackup rig days, respectively. The calculations for committed operating days include available days for two floaters and one jackup, all of which are currently cold stacked.
Williams closed by stating, "After the very robust pace of offshore activity over the past four years, our industry may be entering a short and arguably useful pause in the cycle. As was the case in 2013, we entered this year with considerable backlog. That said, although we believe activity in the jackup sector is best defined as a steady state, the reality is that we find ourselves evaluating fewer floating rig contract opportunities today than we did a year ago. We expect to have additional contract opportunities under review as the year progresses, but it is increasingly clear that the first half of 2014 is likely to be characterized by lower rig utilization. The lower utilization is likely to be more pronounced for the floating rigs with limited technical features. Noble's exposure to a weaker floating rig sector is limited in 2014, with only 22% of our operating days available.
"We are confident about the long-term outlook for offshore drilling and remain committed to a capital allocation strategy that promotes disciplined growth with strong returns and strategic appeal while offering the flexibility to consider other actions that promote enhanced shareholder value. In the ultra-deepwater segment, which represents a growing portion of our revenue, we continue to observe a fundamentally sound business. In the face of generally steady crude oil prices, successful exploration programs with over 240 announced deepwater discoveries since 2008, continued geographic expansion and a building backlog of field development projects, the segment is poised to provide exceptional future growth opportunities. Our transformation to a company with a predominately premium asset fleet positions Noble to successfully address the future opportunities in ultra-deepwater and high-specification jackup drilling applications."
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