Tags: Noble | drilling | comeback | NE

Noble Set for Oil Drilling Comeback

By    |   Tuesday, 29 Nov 2011 12:15 PM

"Drill baby drill" could be a Noble Corp. (NE) motto. Like other offshore drilling contractors, Noble lost ground after the oil spill in the Gulf of Mexico last year. The group has far underperformed the S&P 1500 Composite Index this year, with Noble sinking 9.3 percent. But the driller has staged for a drilling comeback in 2012, say many analysts, as global demand jacks up.

Noble has 79 offshore drilling rigs, including ultra-deepwater ones. Contracts are rolling in from Africa, the North Sea, Mexico, Southeast Asia and the Middle East that make up for a slow recovery in U.S. deepwater exploration. Last year, Noble bought Frontier Drilling, handing the company an order backlog.

Domiciled in Switzerland, Noble is pumping up its bottom line. Third-quarter revenues climbed 20 percent to $737.9 million versus $612.6 million a year ago. Profits soared 57 percent. CEO David Williams noted that Noble has “higher fleet utilization and improving day rates.”

Last year, Noble rewarded investors with a one-time special dividend. Some analysts expect another one this year, adding to the current 1.9 percent normal dividend.

Analysts cheer

Noble has a fervid following. Of the 39 analysts followed by Thomson/First Call, 13 have strong buy recommendations and 18 have buys, with eight holds.

S&P analysts agree. They have had a buy rating, citing 2012 growth from new build programs and contract backlogs. Risks include volatile crude oil prices, political risk in frontier regions and an uncertain U.S. regulatory regime, they add.

The company reports next Jan. 25.

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Drill baby drill could be a Noble Corp. (NE) motto. Like other offshore drilling contractors, Noble lost ground after the oil spill in the Gulf of Mexico last year. The group has far underperformed the S P 1500 Composite Index this year, with Noble sinking 9.3 percent....
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2011-15-29
Tuesday, 29 Nov 2011 12:15 PM
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