NEW YORK, January 24, 2013 /PRNewswire/ --
Contract activities for offshore drilling companies continue to rise given the high level of demand for offshore drilling services. In light of this, Noble Corporation (NYSE: NE) [ Full Research Report] (1) recently updated its drilling rig status report stating three new contracts in the North Sea, West Africa, and Arabian Gulf areas. Operations for the new contracts will begin in the second quarter of 2013.
The new contracts are promising signs for investors, though it may take a while before the company can deliver again after experiencing operational downtime last year. The effect of the prolonged downtime from their rigs in the Gulf of Mexico and offshore Brazil is noticeable from the company's third quarter earnings, with the company earning only $112 million or $0.45 per share, missing the analysts' consensus estimate of $0.52 by $0.07. Earnings were down 15.1% from 2011.
As traditional oil fields produce less and less yield each year, the demand levels for offshore drilling service rise. This leads to higher day rates and more profitable operations. Drilling activity in the US Gulf of Mexico has also resumed, after it took a halt following the 2010 oil spill.Nevertheless, this high demand for offshore drilling service cannot be fully taken advantage of if Noble Corporation continues to suffer downtime. Late last year, the U.S. Coast Guard raised several issues regarding Noble's drillship Noble Discoverer. Complaints were mostly concerned with the drillship's propulsion and safety management systems. Noble also experienced downtime in its other drill rigs, with a total of 68 days of downtime in the month of December alone.