Noble quarterly earnings grew 25 percent

Profits are soaring for drilling company Noble Corp., which reported a 25 percent increase in first-quarter earnings, two new contracts valued at $1.3 billion, and hinted that it may be part of Shell’s 2014 return to the Arctic, even as it grapples with a recent scathing Coast Guard report over safety issues for its Arctic ship that was part of Shell’s failed 2012 Alaskan exploration.

The Swiss company reported first quarter 2013 earnings of $150 million, or 59 cents per diluted share, up 25 percent from $120 million, or 47 cents per diluted share, for the same time last year.

Revenues for the first quarter of 2013 were $971 million, up 22 percent from $798 million in the first quarter of 2012.

Noble, an offshore drilling company for oil and gas operators, also announced three-year term drilling contracts with Plains Exploration & Production Company for two new ultradeep-water drillships for an estimated $1.3 billion in revenue over the next three years.

“With the addition of these units to our U.S. Gulf of Mexico fleet, Noble will have one of the most modern and capable fleets in the region,” said David Williams, CEO for Noble Corp. “At the same time, these contracts provide us with significant additional backlog.”

Noble had a rough go of it in 2012, when mechanical problems forced it to take some of its drillships offline for needed repairs. Most notably, its Noble Discoverer, one of the two drillships at the center of Shell’s Alaskan Arctic ambitions, experienced propulsion system failures last fall that led to a postponement of the mission.

The U.S. Coast Guard found various safety and environmental violations in a subsequent inspection and the drillship has since been transported to Asia for further repairs.

Noble Discoverer: Coast Guard documented 16 deficiencies on Arctic drillship

Roger Hunt, Noble’s senior vice president for marketing and contracts, said at the call that Shell is considering extending its contract for the Discover for a return to Arctic exploration in 2014.

Noble also had problems with two of its semisubmersibles, the Noble Clyde Boudreaux in Australia and the Noble Paul Wolff in Brazil, caused by wellhead connector bolt failures.

It’s a problem that the company has addressed and will continue to improve, Williams said Thursday at the company’s first quarter 2013 earnings call.

“We expect to deliver more consistent fleet performance going forward,” Williams said, noting that reductions in unplanned operational downtime had increased by two percent in the first quarter. “Achieving further reductions in downtime and improving operational performance remain key objectives for the company.”

Average dayrates have increased slightly to $174,600 for the first quarter, up from $174,100 for the fourth quarter of last year. Noble has a healthy backlog of commitments for its rigs, indicating the continuation of a strong performance throughout the year. Approximately 74 percent of available rig operating days have been booked for the remainder of 2013.

Williams also said that Conoco, which said last week that it is cancelling earlier plans for Arctic exploration, has agreed to pay $18 million to cancel a contract with Noble for an Arctic drillship currently under construction.