Noble Corporation on Wednesday reported a net loss of $1.1 billion or $4.25 per diluted share for the first quarter of 2020, on total revenues of $281 million.
Noble said the adjusted results for the first quarter compared to a net loss attributable to the Company for the three months ended December 31, 2019 (fourth quarter) of $33 million, or $0.13 per diluted share, on total revenues of $454 million. Results for the fourth quarter included net favorable items totaling $50 million, or $0.20 per diluted share. Excluding the $50 million of net favorable items, the adjusted net loss attributable to Noble Corporation plc for the fourth quarter of 2019 would have been $83 million, or $0.33 per diluted share, on total revenues of $287 million.
Julie J. Robertson, Chairman, President and Chief Executive Officer of Noble Corporation plc, noted, “Total fleet utilization and average daily revenues in the first quarter were largely unchanged from the fourth quarter of 2019, with limited impact from the significant dislocation experienced in the global oil and gas market.
Noble said contract drilling services costs for the first quarter were $161 million compared to $182 million in the fourth quarter of 2019, which had been adjusted to $175 million for the $7 million of costs related to the Noble Bully II contract buyout. The eight percent decline from adjusted fourth quarter costs was driven primarily by lower repair and maintenance costs and reduced expenditures relating to operations support. “These cost reductions were partially offset by a full quarter of operations on the drillship Noble Don Taylor following the rig’s relocation to Guyana,” the Company stated.
In addition to the effect of fewer calendar days in the first quarter, Noble said there was a four percent decline in operating days when compared to the fourth quarter, due largely to reduced days for the drillship Noble Bully II, which spent the quarter mobilizing to a new stacking location. “Partially offsetting the decline in operating days was a full quarter of operations on the Noble Don Taylor offshore Guyana. At the conclusion of the first quarter, seven of the Company’s nine actively marketed rigs were contracted. In April, operations on the Noble Tom Madden offshore Guyana were placed on standby for up to 90 days at a reduced dayrate,” Noble indicated.
Robertson said the first quarter results were aided by an exceptional effort to manage the company’s global operation in the face of mounting risks and uncertainties created by the COVID-19 pandemic. “The effort, which included professionals throughout our Operations, HSE, Human Resources and Supply Chain disciplines, and many among our offshore personnel who agreed to extended crew rotation schedules, demonstrates the commitment and dedication that characterizes the entire Noble organization.”
She said despite the challenges posed by the unprecedented crisis that the industry currently faces, Noble remains customer focused and committed to operational excellence and efficiency. “We have recently reduced our G&A and shore-based support burden by approximately $25 million on an annualized basis and continue to seek additional cost efficiency measures to further streamline our organization for current market activity.”
The Chief Executive Officer said the Company also remains focused on addressing its capital structure. “To that end, we have engaged Evercore as a financial advisor and are actively working with them to evaluate alternatives to enhance our liquidity position and reduce our total amount of debt and corresponding interest costs. These alternatives include, but are not limited to, potential capital exchange transactions as well as a more comprehensive debt restructuring.”
She said Noble remains committed to continuing its efforts to establish and enforce the most effective measures for maintaining the health and safety of its global offshore and shore-based employees, service providers and customers. The company said its dedication to strong and consistent operational excellence will be of paramount importance through this challenging time. “As we have for the duration of this extended downturn, we will continue to engage with and support our customers as they execute on their current drilling plans as well as evaluate their offshore drilling requirements for 2020 and beyond,” Robertson said.