NOBLE CORPORATION 
By ZUG, Switzerland, Jan. 26, 2011 /PRNewswire/ -- Noble Corporation (NYSE: NE) today reported fourth quarter 2010 earnings of $99 million, or $0.39 per diluted share, versus $446 million, or $1.72 per diluted share, for the fourth quarter of 2009. Contract drilling services revenues for the fourth quarter of 2010 were $614 million versus $894 million in the fourth quarter of 2009. Earnings for the full year 2010 totaled $3.02 per diluted share compared with $6.42 per diluted share in 2009.
"2010 will be remembered as one of the most challenging years this industry has ever experienced," said David Williams, Chairman, President and Chief Executive Officer. "However, Noble's core values and strengths enabled us to not only weather the storm, but to do so while maintaining operational excellence, improving safety, expanding our geographic diversity and adding significant contract backlog with key customers."
Contract drilling services revenues for the fourth quarter 2010 were $614 million, down 31 percent from the year-earlier quarter. Contract drilling margins for the fourth quarter 2010 were approximately 46 percent, generating $369 million in net cash provided by operating activities during the quarter and $1.7 billion for full year 2010. The Company invested $537 million in capital projects during the quarter, bringing full-year capital spending for 2010 to $1.4 billion. Debt as a percentage of total capitalization increased slightly to 27.5 percent at December 31, 2010, from approximately 27.4 percent at the end of the third quarter 2010.
Fourth Quarter Highlights
At year end 2010, approximately 53 percent of the Company's available rig operating days was committed for 2011 and approximately 31 percent was committed for 2012. The Company's total backlog at December 31, 2010 was approximately $12.7 billion.
In the U.S. Gulf of Mexico, the Noble Danny Adkins resumed work for Shell on full rate in late December. The completion work being performed by the Adkins is expected to last until early February after which time the rig could return to standby rate if Shell does not have another work scope approved. Subsea systems in the Gulf of Mexico, including BOP stacks, have been certified by third parties on the Noble Amos Runner, Noble Clyde Boudreaux, Noble Danny Adkins, Noble Jim Day, Noble Paul Romano, and most recently, the Noble Jim Thompson.
In Mexico, the Noble John Sandifer and the Noble Sam Noble each received short-term extensions beginning early January at dayrates of $74,000-$76,000. In the North Sea, the Noble Byron Welliver received a contract for approximately six months plus two priced option wells beginning early June at a dayrate of $88,000-$91,000. The Noble Lynda Bossler's work with its current customer has been extended by approximately three months. The Noble Homer Ferrington is expected to begin a two-well assignment at the end of the first quarter.
In West Africa, the Noble Lloyd Noble is expected to begin a six-month contract in early February 2011. In the Middle East, the Noble Roy Rhodes received a two-month contract beginning early April 2011 at a dayrate of $88,000-$90,000, after which it will move to a dayrate of $92,000-$94,000 for a five-month contract as of mid May 2011. Also during the quarter, the Noble Joe Beall began a six-month contract for accommodation work at a dayrate of $53,000-$55,000.
In December, Noble announced the construction of two JU3000N high-specification jackups with total costs of $220 million per rig. The Company has options to construct up to four additional units exercisable before year-end 2011. In January, Noble also announced plans to construct two ultra-deepwater drillships at a cost of $605 million per unit. This contract contains options for up to two additional units which must be exercised by early May 2011. One of the drillships has received a Letter of Intent to work for Shell upon delivery in 2013 at a base dayrate of $410,000. The unit will be eligible for a 15 percent performance bonus.
"These newbuild announcements reinforce our strategy of adding high-specification rigs to our fleet at investment levels we believe will generate solid returns," said Williams. "Since 2005, we have more than doubled Noble's floating fleet, and upon completion of our existing newbuild program, we expect to have twelve ultra-deepwater units deployed in major petroleum basins around the world. Likewise, the JU3000N units will continue the modernization of our jackup fleet and be some of the most capable rigs in the world. These newbuilds, each to be constructed under turnkey contracts with proven shipyards, are expected to deliver value for many years to come."
About Noble
Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 73 offshore drilling units (including eight drilling rigs currently under construction), located worldwide, including in the Middle East, India, the U.S. Gulf of Mexico, Mexico, the Mediterranean, the North Sea, Brazil, West Africa and Asian Pacific. Noble also owns and operates a dynamically positioned floating production, storage, offloading vessel. Noble's shares are traded on the New York Stock Exchange under the symbol "NE". Additional information on Noble Corporation is available via the worldwide web at http://www.noblecorp.com.
Statements regarding contract backlog, earnings, costs, revenue, rig demand, fleet condition or performance, shareholder value, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, costs and difficulties relating to the integration of acquired businesses, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company's most recent Form 10-K, Form 10-Q's and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.
Conference Call
Noble also has scheduled a conference call and webcast related to its fourth-quarter and full-year 2010 results on Thursday, January 27, 2011, at 8:00 a.m. U.S. Central Standard Time. Interested parties are invited to listen to the call by dialing 1-866-461-7129, or internationally 1-706-679-3084, using access code: 27248251 or by asking for the Noble Corporation conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Web site.
A replay of the conference call will be available on Thursday, January 27, 2011, beginning at 11:00 a.m. U.S. Central Standard Time, through Thursday, February 10, 2011, ending at 5:00 p.m. U.S. Central Standard Time. The phone number for the conference call replay is 1-800-642-1687 or, for calls from outside of the U.S., 1-706-645-9291, using access code: 27248251. The replay will also be available on the Company's Web site following the end of the live call.
The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the "Investor Relations" section of the Company's Web site under the heading "Regulation G Reconciliations."
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
------------
2010 2009
---- ----
Operating revenues
Contract drilling services $614,418 $894,184
Reimbursables 19,668 37,234
Labor contract drilling services 8,816 8,455
Other 883 253
--- ---
643,785 940,126
------- -------
Operating costs and expenses
Contract drilling services 331,930 264,012
Reimbursables 14,955 32,954
Labor contract drilling services 5,486 4,928
Depreciation and amortization 154,463 112,667
Selling, general and administrative 20,736 19,361
Loss on asset disposal/involuntary
conversion, net - (214)
527,570 433,708
------- -------
Operating income 116,215 506,418
Other income (expense)
Interest expense, net of amount
capitalized (4,338) (424)
Interest income and other, net 2,693 1,848
----- -----
Income before income taxes 114,570 507,842
Income tax provision (16,276) (61,427)
------- -------
Net income 98,294 446,415
------ -------
Net income attributable to
noncontrolling interests 464 -
--- ---
Net income attributable to Noble
Corporation $98,758 $446,415
======= ========
Net income per share
Basic $0.39 $1.72
Diluted $0.39 $1.72
Twelve Months Ended
December 31,
------------
2010 2009
---- ----
Operating revenues
Contract drilling services $2,695,493 $3,509,755
Reimbursables 76,831 99,201
Labor contract drilling services 32,520 30,298
Other 2,332 1,530
----- -----
2,807,176 3,640,784
--------- ---------
Operating costs and expenses
Contract drilling services 1,177,800 1,006,764
Reimbursables 59,414 85,035
Labor contract drilling services 22,056 18,827
Depreciation and amortization 539,829 408,313
Selling, general and administrative 91,997 80,262
Loss on asset disposal/involuntary
conversion, net - 30,839
1,891,096 1,630,040
--------- ---------
Operating income 916,080 2,010,744
Other income (expense)
Interest expense, net of amount
capitalized (9,457) (1,685)
Interest income and other, net 9,886 6,843
----- -----
Income before income taxes 916,509 2,015,902
Income tax provision (143,077) (337,260)
-------- --------
Net income 773,432 1,678,642
------- ---------
Net income attributable to
noncontrolling interests (3) -
--- ---
Net income attributable to Noble
Corporation $773,429 $1,678,642
======== ==========
Net income per share
Basic $3.03 $6.44
Diluted $3.02 $6.42
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, December 31,
2010 2009
--- ---
ASSETS
Current assets
Cash and cash equivalents $337,871 $735,493
Accounts receivable 387,414 647,454
Prepaid expenses and other
current assets 105,443 100,243
------- -------
Total current assets 830,728 1,483,190
------- ---------
Property and equipment
Drilling equipment and
facilities 12,471,283 8,666,750
Other 172,583 143,477
------- -------
Total property and equipment 12,643,866 8,810,227
Accumulated depreciation (2,595,779) (2,175,775)
---------- ----------
Net property and equipment 10,048,087 6,634,452
---------- ---------
Other assets 342,506 279,254
------- -------
Total assets $11,221,321 $8,396,896
=========== ==========
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long
term debt $80,213 $-
Accounts payable 374,814 197,800
Accrued payroll and related
costs 125,663 100,167
Taxes payable 15,382 68,760
Other current liabilities 124,309 67,220
------- ------
Total current liabilities 720,381 433,947
------- -------
Long-term debt 2,686,484 750,946
Deferred income taxes 258,822 300,231
Other liabilities 268,001 123,340
------- -------
Total liabilities 3,933,688 1,608,464
--------- ---------
Commitments and contingencies
Shareholders' equity
Shares 917,684 1,130,607
Additional paid-in capital 39,006 -
Retained earnings 6,630,500 5,855,737
Treasury shares (373,967) (143,031)
Accumulated other
comprehensive loss (50,220) (54,881)
------- -------
Total shareholders' equity 7,163,003 6,788,432
--------- ---------
Noncontrolling interests 124,630 -
Total equity 7,287,633 6,788,432
--------- ---------
Total liabilities and equity $11,221,321 $8,396,896
=========== ==========
NOBLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twelve Months Ended
December 31,
------------
2010 2009
---- ----
Cash flows from operating
activities
Net income $773,432 $1,678,642
Adjustments to reconcile net
income to net cash from
operating activities:
Depreciation and amortization 539,829 408,313
Loss on asset disposal/
involuntary conversion, net - 30,839
Deferred income tax provision (41,409) 36,866
Share-based compensation
expense 34,930 37,995
Pension contributions (16,464) (17,639)
Net change in other assets and
liabilities 364,058 (38,300)
Net cash from operating
activities 1,654,376 2,136,716
--------- ---------
Cash flows from investing
activities
New construction (653,269) (717,148)
Other capital expenditures (666,673) (594,957)
Major maintenance expenditures (103,542) (119,393)
Accrued capital expenditures 139,185 (63,561)
Acquisition of FDR Holdings
Limited, net of cash acquired (1,629,644) -
Net cash from investing
activities (2,913,943) (1,495,059)
---------- ----------
Cash flows from financing
activities
Borrowings on bank credit
facilities 40,000 -
Payments of long-term debt - (172,700)
Proceeds from issuance of joint
venture partner notes 35,000 -
Proceeds from issuance of long-
term debt, net 1,238,074 -
Proceeds from employee stock
transactions 11,828 12,168
Settlements of interest rate
swap agreements (6,186) -
Dividends/par value reduction
payments (227,326) (47,939)
Repurchases of employee shares
for taxes (10,115) (7,106)
Repurchases of shares (219,330) (203,898)
-------- --------
Net cash from financing
activities 861,945 (419,475)
------- --------
Net change in cash and cash
equivalents (397,622) 222,182
Cash and cash equivalents,
beginning of period 735,493 513,311
------- -------
Cash and cash equivalents, end
of period $337,871 $735,493
======== ========
NOBLE CORPORATION AND SUBSIDIARIES
FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
(In thousands, except utilization amounts, operating days and average
dayrates)
(Unaudited)
Three Months Ended December 31,
-------------------------------
2010
----
Contract
Drilling
Services Other Total
-------- ----- -----
Operating revenues
Contract drilling services $614,418 $- $614,418
Reimbursables 19,179 489 19,668
Labor contract drilling
services - 8,816 8,816
Other 883 - 883
--- --- ---
$634,480 $9,305 $643,785
======== ====== ========
Operating costs and expenses
Contract drilling services $331,930 $- $331,930
Reimbursables 14,483 472 14,955
Labor contract drilling
services - 5,486 5,486
Depreciation and amortization 151,256 3,207 154,463
Selling, general and
administrative 20,571 165 20,736
Loss on asset disposal/
involuntary conversion, net - - -
$518,240 $9,330 $527,570
======== ====== ========
Operating income $116,240 $(25) $116,215
======== ==== ========
Operating statistics
Jackups:
Average Rig Utilization 76%
Operating Days 3,019
Average Dayrate $83,023
Semisubmersibles
Average Rig Utilization 69%
Operating Days 826
Average Dayrate $241,483
Drillships:
Average Rig Utilization 90%
Operating Days 495
Average Dayrate $302,753
FPSO/Submersibles:
Average Rig Utilization 11%
Operating Days 31
Average Dayrate $465,616
Total:
Average Rig Utilization 73%
Operating Days 4,371
Average Dayrate $140,554
Three Months Ended December 31,
-------------------------------
2009
----
Contract
Drilling
Services Other Total
-------- ----- -----
Operating revenues
Contract drilling services $894,184 $- $894,184
Reimbursables 36,199 1,035 37,234
Labor contract drilling
services - 8,455 8,455
Other 253 - 253
--- --- ---
$930,636 $9,490 $940,126
======== ====== ========
Operating costs and expenses
Contract drilling services $264,012 $- $264,012
Reimbursables 31,967 987 32,954
Labor contract drilling
services - 4,928 4,928
Depreciation and amortization 110,054 2,613 112,667
Selling, general and
administrative 19,297 64 19,361
Loss on asset disposal/
involuntary conversion, net - (214) (214)
$425,330 $8,378 $433,708
======== ====== ========
Operating income $505,306 $1,112 $506,418
======== ====== ========
Operating statistics
Jackups:
Average Rig Utilization 81%
Operating Days 3,218
Average Dayrate $131,975
Semisubmersibles
Average Rig Utilization 100%
Operating Days 997
Average Dayrate $396,302
Drillships:
Average Rig Utilization 100%
Operating Days 276
Average Dayrate $269,615
FPSO/Submersibles:
Average Rig Utilization 0%
Operating Days -
Average Dayrate $-
Total:
Average Rig Utilization 83%
Operating Days 4,491
Average Dayrate $199,122
Three Months Ended
September 30,
------------------
2010
----
Contract
Drilling
Services Other Total
-------- ----- -----
Operating revenues
Contract drilling services $584,919 $- $584,919
Reimbursables 18,488 689 19,177
Labor contract drilling
services - 7,887 7,887
Other 635 - 635
--- --- ---
$604,042 $8,576 $612,618
======== ====== ========
Operating costs and expenses
Contract drilling services $315,844 $- $315,844
Reimbursables 13,696 655 14,351
Labor contract drilling
services - 5,302 5,302
Depreciation and amortization 140,199 3,083 143,282
Selling, general and
administrative 25,220 262 25,482
Loss on asset disposal/
involuntary conversion, net - - -
$494,959 $9,302 $504,261
======== ====== ========
Operating income $109,083 $(726) $108,357
======== ===== ========
Operating statistics
Jackups:
Average Rig Utilization 77%
Operating Days 3,032
Average Dayrate $90,791
Semisubmersibles
Average Rig Utilization 90%
Operating Days 1,057
Average Dayrate $172,727
Drillships:
Average Rig Utilization 100%
Operating Days 468
Average Dayrate $229,963
FPSO/Submersibles:
Average Rig Utilization 26%
Operating Days 64
Average Dayrate $304,000
Total:
Average Rig Utilization 79%
Operating Days 4,621
Average Dayrate $126,581
NOBLE CORPORATION AND SUBSIDIARIES
CALCULATION OF BASIC AND DILUTED NET INCOME
(In thousands, except per share amounts)
(Unaudited)
The following table sets forth the
computation of basic and diluted net
income per share:
Three Months
Ended
December 31,
------------
2010 2009
--- ---
Allocation of net income
Basic
Net income attributable to Noble
Corporation $98,758 $446,415
Earnings allocated to unvested
share-based payment awards (952) (4,647)
---- ------
Net income to common shareholders -
basic $97,806 $441,768
======= ========
Diluted
Net income attributable to Noble
Corporation $98,758 $446,415
Earnings allocated to unvested
share-based payment awards (950) (4,628)
---- ------
Net income to common shareholders -
diluted $97,808 $441,787
======= ========
Weighted average number of shares
outstanding -basic 250,687 256,507
Incremental shares issuable from
assumed exercise of stock options 687 1,090
Weighted average number of shares
outstanding -diluted 251,374 257,597
======= =======
Weighted average unvested share-
based payment awards 2,439 2,699
===== =====
Earnings per share
Basic $0.39 $1.72
Diluted $0.39 $1.72
The following table sets forth the
computation of basic and diluted net
income per share:
Twelve Months
Ended
December 31,
------------
2010 2009
--- ---
Allocation of net income
Basic
Net income attributable to Noble
Corporation $773,429 $1,678,642
Earnings allocated to unvested share-
based payment awards (7,497) (16,811)
------ -------
Net income to common shareholders -
basic $765,932 $1,661,831
======== ==========
Diluted
Net income attributable to Noble
Corporation $773,429 $1,678,642
Earnings allocated to unvested share-
based payment awards (7,481) (16,758)
------ -------
Net income to common shareholders -
diluted $765,948 $1,661,884
======== ==========
Weighted average number of shares
outstanding -basic 253,123 258,035
Incremental shares issuable from
assumed exercise of stock options 813 856
Weighted average number of shares
outstanding -diluted 253,936 258,891
======= =======
Weighted average unvested share-
based payment awards 2,438 2,611
===== =====
Earnings per share
Basic $3.03 $6.44
Diluted $3.02 $6.42
SOURCE Noble Corporation
