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Contract drilling service provider Noble Corporation (NE - Analyst Report) has confirmed that Hurricane Isaac – which affected U.S. Gulf of Mexico region -- has not caused any damage to the company’s seven active rigs operating in the area.
 
Noble had cut down on the dayrates at the seven rigs in the region to 90% from the full operational dayrate of 95% over the last seven days, owing to the advancing cyclone. Currently, all these seven rigs have resumed operations and crews have returned to work.
 
The Switzerland-based company also informed that deepwater semisubmersible Noble Max Smith is undergoing a planned shipyard program in Pascagoula, Mississippi due to a delay in mobilization to Brazil. The rig is likely to incur 30-40 days of unpaid downtime. Once the rig is mobilized, it is expected to receive daily dayrate of $170,000.
 
Noble further cautioned that its third quarter financial results of 2012 are likely to be adversely affected due to various operational issues and delays in returning rigs to work. The revenue will likely be reduced by $50 million from estimated level in the last Fleet Status Report.
 
In particular, the U.S. Gulf of Mexico-stationed ultra-deepwater drillship Noble Globetrotter is among those rigs which have experienced a higher-than-expected amount of downtime and reduced dayrate as commissioning and testing continues on the unit’s subsea blowout prevention and control system (BOP). The rig will carry on at lowered rates till the third quarter, when the commissioning and testing on its BOP is expected to conclude in the third quarter. 
 
Other units, which have been delayed, include ultra-deepwater semisubmersible Noble Dave Beard, and drillships Noble Leo Segerius and Noble Phoenix. These vessels experienced postponement due to the shipyard programs and partly due to slowdown in the grant of regulatory approvals by the Brazilian authorities.
 
The rigs are expected to receive clearance from the authorities by the end of third quarter 2012. Noble Duchess, operating in offshore India, started work late in August and Noble Charles Copeland in the Middle East, anticipated to begin its three-year contract in the Middle East on October 1, 2012, were also delayed in the quarter due to maintenance and repairs. 
 
Currently, Noble Hans Deul – operating in the UK sector of the North Sea – received a minimum 18-month contract extension from a subsidiary of Royal Dutch Shell plc (RDS.A - Analyst Report). The extension period will likely start in February 2013, in direct continuation of the rig’s existing contract. The deal is expected to swell Noble’s coffers by an estimated $132 million.
 
Noble holds a Zacks #3 Rank (Short term Hold rating). Longer term, we maintain our Neutral recommendation.

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