Stabroek oil bonanza is key driver in Noble contract coverage

The Noble Don Taylor drillship

The unprecedented oil discoveries to date and multiple exploration targets that remain on Guyana’s prolific Stabroek Block are driving up the need for more drillships and this is playing a key role in the improvement of contract coverage for Noble Corporation.

So says Julie Robertson, the company’s Chairman, President and CEO speaking to investors on an earnings call last week to announce Q4 2019 results. She said Noble concluded the year with 95% of its active fleet under contract, which excludes three cold stacked rigs. Also, 60% of the active floating fleet days in 2020 are committed to contracts and 62% of the jackup days, which removes the standard duty jackup Noble Joe Beall after February 2020.

She said more importantly, Noble’s days under contract has since the start of 2020. The company continues to benefit from its defined commercial strategy that focuses on the placement of premium assets in attractive regions, where interest among customers is on the rise, leading to the prospects of multiple years of exploration and development drilling opportunities.

“The improvement in contract coverage has been most pronounced in our floating fleet and is linked to our significant presence in the Guyana Suriname Basin,” Robertson said.

Noble announced last week that it had reached a unique commercial agreement with ExxonMobil covering drilling services in the Guyana Suriname Basin where it has been active since March 2018. The agreement which defines contract drilling terms for the services on three Noble’s ultra-deepwater drillships; Noble Bob Douglas, Noble Tom Madden and the Noble Don Taylor, provides for an initial three-and-a-half years of term with potential for six additional years, subject to future development decisions and government approvals.

“Clearly, the multi-year contract visibility and prospects for full utilization across three of our premium drillships is an exceptional result of the agreement and we are honored to play a significant role in this prolific offshore region,” she stated.

Robertson said the agreement also allows for the addition of other Noble rigs as required. She used the opportunity to announce that ExxonMobil has awarded a one-year contract to the Noble Sam Croft for drilling services offshore Guyana. This is in keeping with the US oil major’s previous announcements regarding increasing its drilling fleet offshore the South American country.

The Noble Don Taylor is the most recent addition to the drillship fleet operating at Stabroek Block having arrived in November 2019.

“The Noble Sam Croft is expected to commence operations in the third quarter of 2020, following the completion of its current assignment offshore Suriname. The one-year contract term increases the number of rig years awarded under the agreement to four-and-a-half years, with six additional years dependent upon future developments and government approvals,” she pointed out.

Robertson said collectively, these contract awards build a solid base of floating fleet days under contract well into the decade with the award of additional contract days increasingly likely.