* Spin-off company to have larger, older fleet
* Part of industry push for sharper focus on deepwater
* Noble shares rise 3 pct after hours
By Braden Reddall
Sept 24 Offshore drilling contractor Noble Corp
unveiled on Tuesday a long-planned spin-off of older rigs
into a new company that may make an initial public offering next
year, as Noble seeks a premium valuation for its best assets.
Shares of Noble, the No. 4 offshore driller by market
valuation, rose 3 percent in after-hours trading to $39.
Noble said the split of 44 drilling rigs and other assets
from its "high-specification" rigs would take place by the end
of 2014, and that the separation may be preceded by an initial
public offering of up to 20 percent of the new company's stock.
"By separating these two businesses, we believe each company
will be able to better leverage the overall value of its fleet
by focusing on the drivers of its particular business," Noble
Chief Executive David Williams said in a statement.
The greater capability of ultra-deepwater rigs, and a
widening split in the global offshore oil and gas exploration
market between them and older models, have led both Noble and
larger rival Transocean Ltd to tighten the focus of
The existing Noble Corp will control the remaining 35 rigs,
including rigs currently under construction that include three
ultra-deepwater drillships and six high-spec "jackup" rigs,
which drill in water depths of 300 to 400 feet (91 to 122
Noble tried to sell off its lower-specification rigs last
year, but could not find a buyer. Transocean did, however,
manage to sell 38 of its own low-specification rigs for just
over $1 billion to Dubai-based private equity-backed firm Shelf
Drilling International Holdings Ltd last September.
Bankers will wonder if the Noble deal is a prelude to more
industry consolidation, since Pride International's 2009
spin-off of lower-spec vehicle Seahawk cleared the way for Ensco
Plc to swallow Pride and become No. 2 fleet owner, and
then Hercules Offshore Inc's takeover of Seahawk.
Switzerland-based Noble, now in the process of moving its
headquarters to London, said shares of the new company would be
distributed to Noble shareholders "in a spin-off that would be
tax free" for them. Completion of the deal requires a tax ruling
by the U.S. Internal Revenue Services, which Noble expects to
Wunderlich Securities, which initiated coverage of Noble
shares this month with a "buy" rating and a $51 price target,
said the spin-off should be a "positive catalyst."
The new Noble will have a fleet of comparable size to jackup
specialist Rowan Cos Inc, though Rowan is only now
adding ultra-deepwater rigs of its own.
Diamond Offshore Drilling Inc, which said on Tuesday
its CEO would step down early next year, has 38 active rigs and
seven more being built. Seadrill has
36 active rigs on a comparable basis, and 25 under construction.
Noble shareholders are expected to vote on the spin-off in
the second quarter of 2014, and the filing of a registration for
an initial public offering, if it occurs, would be made by the
end of 2013 or early next year, Noble said.
CEO Williams, in a letter to Noble employees, said there
would be no immediate change to day-to-day operations.
"Ultimately, we expect there to be job creation for some
shore-based positions around the world to support offshore
operations that are contemplated to be largely unchanged," he