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Noble: Optimism remains for sustained long-term upcycle as 2023 enters final quarter

Noble reported “strong operational and financial performance” in Q3 2023, and its outlook heading into the final quarter of the year and beyond indicates that the company expects more of the same in the near- and long-term future.

“Our outlook for a sustained long-term upcycle remains well supported by macro factors and customer dialogue,” said Robert Eifler, Noble CEO, in a statement. “We continue to expect a nice step up in 2024 compared to 2023.”

In its quarterly report, released 1 November, Noble reported total revenue of $679 million and an adjusted EBITDA of $283 million, the company’s highest totals in each metric since the closing of its merger with Maersk Drilling last year. The company also reported that its 2024 backlog is currently expected to fall at $1.8 billion, though additional bookings could increase that figure to more than $2 billion.

Noble’s marketed fleet of sixteen floaters was 92% contracted through Q3, compared with 90% in Q2. The company said that recontracting visibility for its marketed fleet continues to be promising, with leading edge dayrates for working tier 1 drillships in the mid- to high- $400,000s range, and with moderate utilization inefficiencies caused by gaps between programs and scheduled maintenance related downtime.

Utilization of Noble’s 13 marketed jackups was 61% in Q3, compared with 59% utilization during Q2. Contracting activity for the jackup fleet has picked up moderately from recent cyclical lows with leading edge fixtures for harsh rigs in the $130,000 to $150,000 range, while persisting soft demand in Norway continues to suppress utilization and dayrate potential for ultra-harsh jackups.

During Q3, Noble was awarded a six-month contract with LLOG for the Noble Valiant drillship in the US Gulf of Mexico at a $470,000 dayrate – that program is expected to start in early January 2024. Both of Noble’s Globetrotter drillships were also awarded contract extensions from Shell at $400,000/day that will keep the rigs working into March of next year.

On the jackup side, the Noble Regina Allen will be deployed for a three-well program with TotalEnergies in Argentina starting in mid-2024 at a $150,000 dayrate. The Noble Resilient jackup was awarded a 120-day contract with Petrogas at $133,000/day that is scheduled to begin in summer 2024 in the North Sea. The Noble Reacher jackup was also extended by 15 months with TotalEnergies, keeping the rig working in the North Sea to mid-2025.

Noble also reported a moderate market for ultra-deepwater rigs – 8 of the 14 long-term contracts awarded for ultra-deepwater rigs this year have gone to non-active rigs that are being reactivated at discount pricing.

However, Mr Eifler said the company still expects to see the ultra-deepwater market pick up in 2024, primarily due to incremental requirements throughout the Americas and West Africa. In Brazil, Petrobras’ total floater fleet is expected to expand from 24 contracted rigs currently to approximately 30 rigs over the next year. Additionally, major projects in Namibia and Suriname are also poised to drive rig requirements.

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