Noble Corp., in the midst of receiving the last in the chain of its newbuild rigs this year, is pushing ahead with its plans to pursue the development of a master limited partnership (MLP), comprised of interests in select rigs chosen from its existing fleet.
The company’s Board of Directors authorised it to proceed and, if realised, it expects to file a registration statement with the Securities and Exchange Commission relating to the initial public offering of common units in the MLP during the second quarter of 2015. The anticipated offering would be subject to the final approval of Noble’s Board of Directors “and market conditions”.
David W. Williams, Chairman, President and CEO, said: “With our fleet transformation largely complete, we have concluded that the creation of an MLP could enhance our capital allocation strategy. Alternatives surrounding the uses of cash flow are evolving with the significant reduction in newbuild capital expenditures to be realised after 2014. We believe this step will provide Noble with enhanced financial flexibility that will facilitate value creation and place the company in a stronger competitive position.”
In August Noble also completed the spin-off of Paragon Offshore.
The company also received its final ultra-deepwater drillship, the Noble Tom Madden, from Hyundai Heavy Industries during the third quarter. The rig will start work in the US Gulf on a 3-year contract mid-December at a dayrate of US $632,000, including mobilisation revenues. Noble’s 2014 planned newbuild deliveries, six in total, will conclude with the expected delivery of the high-specification jackup Noble Sam Hartley, which leaves it with one final newbuild project, the high-spec jackup Noble Lloyd Noble, which has a planned delivery mid-2016.
In the company’s latest results, Williams stated: “Four years ago we set out to transform the Noble fleet and we have achieved our goal. The spin-off of the standard capability fleet is complete and our newbuild construction program, which at one point totalled 14 projects, is near an end. Our geographic presence is expanding as we reposition rigs, such as the deepwater semisubmersibles Noble Paul Wolff and Noble Max Smith, into regions with opportunities that we believe better match the technical features of these assets.”
Noble’s total contract backlog at 30 September, 2014 was an estimated $10.6 billion, compared to $11.1 billion at 30 June, 2014. During the quarter it secured new contracts on two semisubmersibles, the Noble Danny Adkins and Noble Jim Thompson, adding an estimated $173 million to the backlog.
Utilisation of the company’s floating rig fleet (semisubs and drillships) decreased to 80% in the third quarter from 84% in the second quarter. The lower utilisation was due, in part, to an increase in shipyard days on the semisub Noble Amos Runner, higher idle days on the Noble Paul Wolff and Noble Max Smith, and increased repair days on the drillship Noble Globetrotter I.
Average daily revenues in the floating rig fleet were $459,500 in Q3 2014, up 2% compared to $452,600 in Q2, primarily due to the start of operations on the Noble Sam Croft.