Offshore drilling contractor Noble Corporation posted a rise in its second quarter 2016 profit helped by a gain from rig contracts cancellation.
The drilling contractor on Wednesday posted second quarter 2016 net income attributable to Noble Corporation of $323 million, on revenues of $895 million.
In comparison, net income attributable to Noble Corporation for the second quarter of 2015 was $159 million, on revenues of $794 million.
The reported results include several net favorable after-tax items totaling $322 million. This includes a gain of $379 million from a settlement with Freeport-McMoRan’s oil and gas section which terminated a contract with Noble for two drillships, the Noble Sam Croft and Noble Tom Madden.
The results were also partially offset by net loss of $15 million relating to the impairment of certain capital spares; and net loss of $22 million resulting from an unfavorable discrete tax item.
Excluding all of these items, net income attributable to Noble Corporation plc was slightly greater than $1 million on revenues of $502 million.
The company’s capital expenditures in the second quarter and through June 30, 2016 were $69 million and $121 million, respectively.
Contract drilling services revenues in the second quarter were $877 million, including $379 million related to the contract cancellation settlement with Freeport and $14 million pertaining to the contract termination date valuation of a derivative instrument relating to future contingent revenue payments from Freeport as part of the settlement. Excluding these amounts, contract drilling services revenues in the second quarter were $484 million, down from $591 million in the first quarter.
Noble cuts capex guidance
The company has lowered its full year 2016 estimate of total capital expenditures to $675 million from the previous estimate of $800 million. The $125 million reduction is attributable to lower revised expenditures across all spending categories.
David W. Williams , Chairman, President and Chief Executive Officer of Noble Corporation, said, “Reduced customer spending and the current fleet capacity imbalance weigh heavily on the near- to intermediate-term outlook for our industry. However, I remain encouraged by the long-term prospects for industry recovery.
Williams added: “Also, although offshore exploration has been curtailed dramatically over the last two years, I am further encouraged by some recent operator interest offshore Guyana and Suriname, where a new, highly prospective hydrocarbon province is under evaluation, as well as the developing deepwater opportunity offshore Mexico. ”
Offshore Energy Today Staff