Noble Corp profits rise with rig rates, reliability

Wed Jul 17, 2013 5:57pm EDT

(Reuters) - Offshore drilling contractor Noble Corp (NE.N) reported on Wednesday a higher-than-expected second-quarter profit as the rates paid for its rigs improved and the amount of downtime decreased.

Shares of Noble rose 2.7 percent in after-hours trading to $41.08 - their highest level since late May.

Market improvements led to a 7 percent rise in the average daily rig rates from last year, and Chief Executive David Williams said the reduction in unpaid downtime also led to lower repair and maintenance costs and increased bonus revenue.

The decline in utilization of its deepwater fleet to 77 percent from 83 percent three months before was largely due to the idle rig Homer Ferrington, which is being considered for drilling assignments in a few regions, Noble said.

Second-quarter net profit rose to $177 million, or 69 cents per share, from $160 million, or 63 cents per share, a year earlier. Revenue grew 13 percent to $1.02 billion. Excluding a one-time item, it made 63 cents per share, whereas analysts, on average, expected 56 cents, Thomson Reuters I/B/E/S said.

Williams said the company was still going through the "complicated steps" required to potentially spin off the lower-value portion of its fleet - which is similar to a move undertaken by market leader Transocean Ltd (RIG.N).

Transocean, which sold off 38 shallow-water rigs last year, said earlier on Wednesday it had designated three more rigs for sale, bringing its active fleet down to 81 rigs, still larger than Ensco Plc (ESV.N) and Noble.

(Reporting by Braden Reddall in San Francisco; Editing by Tim Dobbyn)