Noble Corp., the world’s third- largest deepwater oil driller based on market value, said first- quarter profit rose 7.8 percent as exploration contracts, signed before the economy plummeted, took effect.
Net income rose to $414 million, or $1.58 a share, from $384 million, or $1.42, a year earlier, the Sugar Land-based company said today in a statement. Excluding a 4-cent charge related to the writedown of its submersible rig Noble Fri Rodli, the company earned $1.62 a share, beating by 16 cents the average of 31 analyst estimates compiled by Bloomberg.
U.S. oil futures averaged $43.31 a barrel during the quarter, down 56 percent from a year earlier, as the global recession eroded energy demand. Oil and natural-gas producers worldwide cut capital budgets by 17 percent this year, according to an estimate by Tristone Capital Ltd.
“It’s really just old contracts ending, new contracts starting and those new contracts starting at higher rates than the old ones were,” said Philip Weiss, an analyst at Argus Research in New York who has a “buy” rating on the stock and owns “a few hundred” shares.
“Because of the fact that they have these contracts that are not easy to break, they can weather the downturn better than other companies can,” Weiss said before earnings were released.
Revenue rose 4 percent to $896 million while contract- drilling costs also climbed 2 percent.
“Despite a turbulent global economy and pressure on demand for drilling services, the strength of our $10.6 billion backlog and focus on execution enabled us to deliver another great quarter,” Chief Executive Officer David Williams said in the statement.
The company operates a fleet of 62 offshore drilling rigs, including five under construction. The average first-quarter day rate for Noble’s jack-up units, so called because of the retractable legs that extend to the sea floor, rose to $158,359 from $145,337 a year earlier. Rates for its deepwater semi- submersibles rose to $369,988 from $291,924.
The company is still deciding what to do with the Noble Fri Rodli, which is capable of operating in less than 60 feet of water, John Breed, a company spokesman, said today in a telephone interview after the earnings were released.
“No final decision has yet been made on what to do with the rig,” Breed said. “We’re looking at alternatives, which might include a possible sale.”
