Offshore drilling contractor Noble Corporation saw its quarterly net loss deepen after being negatively affected by rig impairment charges amid lower demand as a result of the coronavirus pandemic and low oil prices.
Noble on Wednesday reported a net loss attributable to the company for the three months ended 31 March 2020, of $1.1 billion on total revenues of $281 million.
In the same period of 2019, Noble recorded a net loss of $70.9 million and revenues of $282.9 million.
Results for the first quarter 2020 included net after-tax unfavourable items totalling $977 million – including a pre-tax non-cash charge totalling $1.1 billion, relating to the impairment of the semi-submersible rigs Noble Danny Adkins and Noble Jim Day, the drillships Noble Bully I and Noble Bully II, and certain capital spares.
This was partially offset by tax benefits totalling $47 million, including a benefit of $43 million, relating primarily to the application of the Coronavirus Aid, Relief, and Economic Security Act provisions passed by the US Congress to address the adverse economic impact resulting from the COVID-19 pandemic.
Excluding the impact of these items, Noble would have reported a 1Q 2020 net loss of $86 million.
Julie J. Robertson , Chairman, President and Chief Executive Officer of Noble Corporation, noted: “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 “.
Robertson also said that the company had hired Evercore as a financial advisor to evaluate alternatives to enhance Noble’s liquidity position and reduce the 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 “, Robertson stated.
Commenting on the state of the offshore drilling industry, Robertson added, “The reduction in demand as a result of the COVID-19 pandemic and the precipitous escalation in global crude oil supplies have placed the oil and gas industry in a state of heightened duress.
“ The consequences of this combination of detrimental events are increasingly visible, and the offshore drilling industry will endure another period of depressed business activity for a duration of time that remains difficult to forecast”.