Noble Corp. (NE) filed Quarterly Report for the period ended 2009-09-30.
Noble Corp. is a leading provider of diversified services for the oil and gas industry. Contract drilling services are performed with the company's fleet of offshore drilling units located in key marketsworldwide. The company's fleet of floating deepwater units consists of nine semisubmersibles and three dynamically positioned drillships seven of which are designed to operate in water depths greater than 5000 feet.(Press Release) Noble Corp. has a market cap of $11.09 billion; its shares were traded at around $42.72 with a P/E ratio of 6.8 and P/S ratio of 3.2. The dividend yield of Noble Corp. stocks is 0.9%. Noble Corp. had an annual average earning growth of 16.5% over the past 10 years. GuruFocus rated Noble Corp. the business predictability rank of 2.5-star.
Highlight of Business Operations:
While the global macro environment improved during the third quarter 2009 compared to the previous two quarters, the worldwide economy remains uncertain. Oil prices remained steady during the quarter in the $60 to $70 per barrel range; however, prices continue to be subject to volatility. Various economic indicators also continue to be mixed, leading to broad concern about length of the economic recovery. In spite of higher oil prices, we have not seen a substantial increase in demand for offshore drilling services with relatively few new contract commitments signed regardless of water depth. We believe that demand remains strong in the deepwater market segment, but there is little new contract activity across the midwater or shallow water segments. In particular, dayrates for jackup units have decreased up to fifty percent in most regions and utilization has dropped significantly. While we believe that the risk for early contract terminations or defaults under existing contracts has decreased, that risk is not eliminated. We believe the contracting environment will continue to be challenging throughout the remainder of 2009, and possibly into 2010. If the global economy continues to improve and oil prices continue to fluctuate in the current range, we may see increased demand for contract drilling services during 2010. However, due to the introduction of newbuild jackup units into the market, it is possible that dayrates for jackup units may not improve from current levels and could decline further as more units compete for available jobs.
In the third quarter of 2009, we recognized net income of $426 million, or $1.63 per diluted share, on total revenues of $906 million. The average dayrate across our worldwide fleet decreased slightly to $196,900 for the third quarter of 2009 from $198,270 for the second quarter of 2009. Fleetwide average utilization was 83 percent in the third quarter of 2009, as compared to 84 percent in the second quarter of 2009. Daily contract drilling services costs decreased to $56,446 for the third quarter of 2009 from $57,332 for the second quarter of 2009. As a result, our contract drilling services margin remained consistent with the second quarter at 71 percent.
Net income for the three months ended September 30, 2009 (the “Current Quarter”) was $426 million, or $1.63 per diluted share, on operating revenues of $906 million, compared to net income for the three months ended September 30, 2008 (the “Comparable Quarter”) of $383 million, or $1.42 per diluted share, on operating revenues of $862 million.
NE is in the portfolios of David Dreman of Dreman Value Management, PRIMECAP Management.
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