uploads///Revenue

How Noble Earned Higher 4Q16 Revenue despite the Downturn

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Feb. 16 2017, Updated 6:05 p.m. ET

Revenue

Noble Corporation’s (NE) contract drilling revenue was $401 million in 4Q16. This total included a $16 million contract termination lump sum settlement for the jack-up rig Noble Tom Prosser

Excluding this one-time revenue, the company’s adjusted contract drilling services revenue in 4Q16 came in at $385 million, up from $373 million in 3Q16.

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What impacted revenue?

The 3% improvement compared to the previous quarter was due to better performance from Noble’s jack-up fleet. In 4Q16, Noble’s rigs Noble Regina Allen and Noble Houston Colbert returned to service in the North Sea and Middle East regions, respectively. Also, Noble Lloyd commenced operations in November 2016. Because of these additions, there was a 10% rise in the company’s number of operating days.

Peer revenues

Atwood Oceanics’ (ATW) fiscal 1Q17 revenue was $158 million, a fall of ~16% from its revenue of $189 million in the previous quarter. Diamond Offshore Drilling’s (DO) 4Q16 revenue of $391 million was higher than its revenue of $349 million in 3Q16. All other offshore drillers (IYE) have yet to release their earnings for the quarter. Below are analysts’ revenue estimates:

  • Transocean’s (RIG) 4Q16 revenue is expected to be $809 million, a fall of 45% year-over-year (or YoY).
  • Rowan Companies’ (RDC) 4Q16 revenue is expected to be $343 million, a fall of 36% YoY.

Revenue sources

Noble earns the majority of its revenue through ultra-deepwater floaters, followed by deepwater floaters, high-specification jack-ups, and standard jack-ups. Most of its rigs are currently in the US Gulf of Mexico. Noble earned ~68.0% of its 2016 revenue from this region.

Continue reading the next article to learn about Noble’s thoughts on offshore drilling prospects in the US Gulf of Mexico and other drilling regions across the world.

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