First glance looks like a good report and one more JU contracted leaving 2 left. One rig going back to work and some extensions at higher rates. Some down time scheduled for Q4, I will give an informed opinion after I update my schedules for Q3.
With the new rigs going on day rate early, and trending revenue, it will add $100m to the total revenue for 2013 moving it up to $.4.4B +/-.
The IRS things is "troubling". NE must be on the DRNC list (Don't Reply No Contributions" to BO.
Noble Corp (NE) PT $49
Highlights of Analyst/Investor Meeting
Execution Risks Declining in Rig Performance and Construction – Noble’s
management presentation today highlighted the improvements the company is making
in reducing both operational downtime and delays and technical difficulties in its new
rig construction program. It is clear that management believes that they have turned
the corner on a difficult period for the company, as future performance should bear out.
No News on the IRS Tax Ruling – The company expected to receive a “private letter
ruling” from the IRS several months ago. A favorable ruling on the tax-free nature of
the spinoff of its standard capability assets is needed to proceed with the restructuring
of the company. The company insists that the longer-than-expected evaluation and
review period does not signal that a favorable outcome is in doubt. The company is
now looking at a transaction involving an IPO and spinoff of its older rigs in 1H14.
Rig Market Conditions Strengthening – The company highlighted several new highspec jack-up contracts announced today which point to further gains in pricing, contract
length, and terms and conditions. Contract extensions on two of the company’s
JU2000E class rigs were for three years at $257,000 per day, at or slightly above the
recent pricing range for this rig class. The customer is Saudi Aramco.
Ultra-Deepwater Market Tight and Pricing Strong – Noble believes that in
comparison to its competitors it has signed UDW rig contracts at superior rates and
superior contract terms and conditions. The 77 UDW rigs now under construction are
insufficient (in NE’s view) to meet projected demand for exploratory and development
drilling. NE has made contract improvements in acceptance testing, cost escalation
provisions, and expense reimbursement for changes in country of operations.
Maintain Buy Rating, Boosting EPS Estimates – We have raised our EPS estimates