April 20, 2006
Noble profits surge
Noble Corporation (NYSE: NE) reported net income for the first quarter of 2006 of $145.2 million, or $1.05 per diluted share, on operating revenues of $461.9 million, compared to net income of $45.5 million, or $0.33 per diluted share, on operating revenues of $310.3 million for the first quarter of 2005.
At March 31, 2006, the company's consolidated balance sheet reflected $2.9 billion in shareholders' equity, $799.1 million in cash and marketable securities, and $1.1 billion in total debt. Net cash provided by operating activities for the three month period ended March 31, 2006 was $148.7 million as compared to $71.5 million in the prior year. Debt as a percentage of total capitalization, which was 28 percent at March 31, 2006, was reduced to 16 percent on April 10, 2006 following prepayment of $600.0 million of current maturities of long-term debt.
"As of April 9, 2006 our final unit, the Noble Joe Alford submersible, has now returned to service after being damaged during Hurricane Rita in the Gulf of Mexico," said Chairman of the Board and CEO, James C. Day. "Our proactive mooring enhancement initiative for our ultra deepwater semisubmersibles is progressing with the Noble Jim Thompson scheduled for the NC-5 upgrade in July 2006. This new mooring system is designed to withstand environmental forces experienced in the hurricanes of 2005."
Net income for the first quarter of 2006 increased 43 percent from the fourth quarter of 2005 as average dayrates on the company's U.S. Gulf of Mexico deepwater units continued to increase and utilization in its international divisions reached 100 percent during the first quarter.
Net income for the first quarter in 2006 increased 219 percent as compared to the first quarter of 2005 due principally to higher dayrates, increased international utilization rates across the fleet and additional operating days. The Noble David Tinsley and the Noble Mark Burns were activated in February and August of 2005, respectively, and the company also acquired the remaining 50 percent interest in the Noble Harvey Duhaney in August 2005.
Offshore contract drilling services revenues from deepwater drilling units (capable of drilling in water depths of 4,000 feet or greater) accounted for approximately 37 percent and 31 percent of the company's total contract drilling services revenues for the first quarter of 2006 and 2005, respectively.
Noble currently operates six deepwater semisubmersibles in the Gulf of Mexico, one deepwater semisubmersible and three deepwater drillships offshore Brazil, and one deepwater semisubmersible in Nigeria. Contract drilling services revenues from international sources accounted for approximately 68 percent and 78 percent of the company's total contract drilling services revenues for the first quarter of 2006 and 2005, respectively.
Average dayrate for Noble's international jackups was $64,887 in the first quarter of 2006 compared to $51,158 in the first quarter of 2005. Utilization on these units improved to 100 percent in the recent quarter as compared to 94 percent in the first quarter of 2005. Average dayrate on the company's deepwater units in the U.S. Gulf capable of drilling in water depths of 6,000 feet or greater increased 131 percent to $241,562 in the first quarter of 2006 compared to $104,426 in the first quarter of 2005.
The U.S. Gulf of Mexico deepwater market has continued to strengthen, and the dayrates under recent contracts for these units have been higher than the average dayrate for the first and fourth quarters of 2005. Utilization on these units was 100 percent during the first quarter of 2006 compared to 75 percent in the same quarter of last year.
Day said, "We continue to experience strong demand for drilling assets worldwide."