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8-K - FORM 8-K - Noble Finance Co | c11121e8vk.htm |
Exhibit 99.1
Noble Corporation Dorfstrasse 19a 6340 Baar Switzerland |
Press Release
NOBLE CORPORATION ANNOUNCES LETTER OF INTENT FOR NEW FIVE AND A
HALF YEAR CONTRACT AND PROVIDES UPDATE ON BRAZIL OPERATIONS
HALF YEAR CONTRACT AND PROVIDES UPDATE ON BRAZIL OPERATIONS
ZUG, Switzerland, January 17, 2011 Noble Corporation (NYSE:NE) today announced that a
subsidiary has signed a Letter of Intent (LOI) with a subsidiary of Royal Dutch Shell plc for a
new five and one-half year drilling contract on a newbuild ultra-deepwater drillship that is
expected to commence in the second half of 2013. The companies have agreed to model the drilling
contract terms and conditions on the recently announced Noble Globetrotter II contract whereby a
unit of at least the Noble Globetrotter IIs capabilities would receive a base operating dayrate of
$410,000 and be eligible for a 15 percent performance bonus. In addition, the LOI provides for a
lump sum mobilization fee of approximately $18 million and a separate performance-based lump sum
amount of $10 million subject to the achievement of certain criteria. Capabilities include 10,000
foot water depth capability, 200 man quarters and DP-3 station keeping. The Company is currently
reviewing potential newbuild options for fulfilling this contract and expects to provide more
clarity in the future. The LOI is subject to certain conditions, including Shell board approval.
Update to Brazil Operations
Noble also announced the signing of a Memorandum of Understanding (MOU) with Petroleo
Brasileiro S.A. (Petrobras) regarding operations in Brazil. Under the terms of the MOU, Noble
would substitute the dynamically positioned deepwater drillship Noble Phoenix, currently under
contract with Shell in Southeast Asia, for the dynamically positioned drillship Noble Muravlenko.
The Noble Muravlenko is currently operating under a six-year contract with Petrobras ending in 2015
at a base dayrate of $290,000, exclusive of a potential performance bonus of 15 percent. After the
substitution, the Noble Phoenix would operate under the same terms. The swap of the Noble Phoenix
for the Noble Muravlenko is expected to address certain reliability issues faced by the Noble
Muravlenko. Upon release by Shell, the Noble Phoenix will undergo limited contract preparations,
after which the unit would mobilize to Brazil. Noble expects that acceptance of the Noble Phoenix
in Brazil by Petrobras would take place in the fourth quarter of 2011. The Noble Muravlenko is expected to continue operating in Brazil until the arrival and acceptance of the
Noble Phoenix. Associated with the cancelation of the contract on the Noble Phoenix, the Company
anticipates booking a first quarter 2011 non-cash gain of approximately $55 million. The gain is
not taxable.
Noble has decided, after analyzing available alternatives, that it will not proceed with the
previously announced reliability upgrade to the Noble Muravlenko that was scheduled to take place
in 2013. As a result of the cancellation of the upgrade, Noble expects that its first quarter 2011
results will include an associated non-cash impairment charge currently estimated to be
approximately $40 million. There is no tax effect to the charge. The Company has already begun
exploring alternatives and potential opportunities for the Noble Muravlenko. The upgrade projects
on the Noble Leo Segerius and Noble Roger Eason are expected to go forward and the Company
anticipates that the Noble Leo Segerius will enter the shipyard in Brazil in the first quarter of
2011 to commence its upgrade.
The transactions contemplated by the MOU are contingent on Petrobras board approval and
execution of definitive agreements with Petrobras. The Companys ability to deliver the Noble
Phoenix is subject to the release of the unit by Shell.
These arrangements address key issues for both our customers, said David W. Williams,
Chairman, President and Chief Executive Officer, Noble Corporation. We are pleased to be able to
provide Petrobras with a rig with the capabilities of the Noble Phoenix and in doing so assist
Shell in meeting its goals. Furthermore, the commitment on another long-term contract for a
newbuild ultra-deepwater drillship beginning in 2013 adds even more strength to our ultra-deepwater
fleet and to our backlog story. We look forward to continuing to meet the needs of these two
important customers in the years ahead.
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 71 offshore drilling units
(including six 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. Nobles 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 the timing and amount of the gain and impairment charge, completion of
the transactions contemplated by the MOU and LOI, plans for the Noble Phoenix and Noble Muravlenko,
timing of the mobilization and acceptance of the Noble Phoenix, terms of a drilling contract with
Petrobras for the Noble Phoenix, terms of a drilling contract with Shell for a deepwater unit,
dayrates, realization of potential bonuses, unit capabilities, construction and upgrades, 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 completion of accounting and financial statement preparation processes, actions by
Shell, Petrobras and other third parties, including obtaining necessary corporate approvals, the
negotiation of and agreement on final documentation, challenges in providing an acceptable
deepwater unit on a timely basis, governmental actions, litigation risks, operating hazards and
delays, risks associated with operations outside of the U.S., factors affecting the level of
activity in the oil and gas industry, supply and demand of drilling rigs, factors that affect time
in the shipyard, weather conditions, the future prices of oil and gas and other factors detailed
in the Companys most recent Form 10-K, Form 10-Qs 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.
NC- 536
1/17/2011
1/17/2011
For additional information, contact:
For Investors:
|
Lee M. Ahlstrom, Vice President Investor Relations and Planning, | |
Noble Drilling Services Inc., 281-276-6440 | ||
For Media:
|
John S. Breed, Director Corporate Communications, | |
Noble Drilling Services Inc., 281-276-6729 |