(Reuters) - Noble Corp (NE.N), owner of the world’s third-largest offshore drilling fleet, posted a better-than-expected rise in profit and highlighted recent improvements in its key deepwater drilling market that led to a flurry of good contract deals.
Rival Ensco Plc (ESV.N) then said late on Wednesday that a newly built rig, the DS-6, would start earning $520,000 per day on a five-year contract starting by year-end. Ensco also confirmed the progress of two other new deepwater rigs among eight heading to the Gulf of Mexico this year.
Noble, which will start up a new rig in the U.S. Gulf this month, also highlighted an upsized $605,000-per-day contract for the Noble Jim Day starting nearby in July, while the older-model Amos Runner just added $100,000 to its dayrate in a recent deal.
“These contract awards, which reflect significant dayrate improvement, are evidence of the strong fundamental environment that is driving client demand for deepwater rigs,” Noble Chief Executive David Williams said in a statement.
Like sector leader Transocean Ltd RIGN.VX, Noble has been struggling with downtime for many of its rigs, which has led to both lost potential earnings and higher costs.
Average first-quarter rig utilization was 74 percent, down from 79 percent the previous quarter, but the average dayrate for its fleet improved by 11 percent in the past three months.
First-quarter net profit rose to $120.2 million, or 47 cents per share, from $54.5 million, or 21 cents per share, a year ago. Analysts had expected 42 cents per share, according to the average estimate on Thomson Reuters I/B/E/S. Revenue grew 38 percent to $797.7 million.
Prior to the results release, Noble shares rose 0.9 percent to close at $36.63. The stock is down 13 percent in the past year, similar to Diamond Offshore Drilling Inc (DO.N) and compared with a 5 percent drop for Ensco and Transocean’s 34 percent fall. Diamond will post earnings on Thursday, while Ensco and Transocean are due to report in early May.
Reporting by Braden Reddall in San Francisco; Editing by Phil Berlowitz, Bernard Orr