Amid the Gulf of Mexico (GoM) drill ban chaos, Swiss offshore driller Noble Corporation (NE) came out with a handy way to alleviate part of its rent-income loss by signing a standby agreement for one of its ultra-deepwater semisubmersible drilling units for $145,000 per day.
 
Among a total fleet of 63 mobile offshore drilling units, Noble owns and operates 13 semisubmersible rigs. This includes the rig under the standby agreement, Noble Clyde Boudreaux. The company said that it has reached an agreement with its Houston-based customer Noble Energy Inc. (NBL) to put the rig on standby from June 15 to December 12. With mutual consent, the tenure may be extended.
 
In addition, both companies have agreed to enter into a fresh contract for the remaining period of the original contract for the unit, which is expected to be completed in November 2011, excluding the standby period, at a dayrate of $397,500.
 
Noble Corp. is currently disputing the case of force majeure notice received from Anadarko Petroleum Corp. (APC) for its rig Noble Amos Runner. Force majeure is a clause that frees up parties from liability in case of an extraordinary event such as a natural disaster or a war. Apart from this, the company confirmed that it has not received any such notice from any other customers.
 
At the time when offshore drillers were experiencing an improvement in market conditions with an uptrend in oil prices and better bidding activity, the drilling ban distressed all of them, especially the players who were actively engaged in the deepwater GoM drilling.
 
However, the post-ban offshore drilling scenario will get back on track, in our view. Being a leader in offshore drilling, we anticipate that Noble will be able to capitalize on that favorable situation. Until then, we prefer to remain Neutral on Noble Corp. shares.
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