Noble nears $690m rig order

Rig order nears: Noble Corp CEO David Williams

Contractor Noble Corp is on the verge of inking a large order for a rig after sealing a long-term charter contract from Norway's Statoil.

The Switzerland-based player said it is closing to penning a deal for the ultra-high specification jack-up with an expected total delivered cost, excluding capitalised interest, of around $690 million.

The order is coming on the back of a firm four-year deal from Statoil for the unit to be used on the Mariner project in the UK North Sea.

Upstream reported at the end of April that Noble had moved ahead of Norway's Seadrill in the race to supply the rig for the heavy oil field development.

Statoil's four-year deal comes with a price tage of $655 million inclusive of mobilisation, which equates to an all-in dayrate of $448,600.

Analyst Cowen Securities wrote in a research note: "Even assuming a $30-$40 million mobilisation fee and a sizeable amount of extra equipment, the clean dayrate is likely approaching $400,000."

Noble is in talks with two Statoil-nominated yards for the rig construction contract, Jurong Shipyard in Singapore and Daewoo Shipbuilding & Marine Engineering in South Korea.

The New York-listed driller added only on Tuesday that it is "in the final stages of negotiating a contract for the construction".

The new rig will be an enhanced version of Statoil's Category J (Cat J) design and will be able to drill to depths of up to 10,000 metres in water depths of up to 150 metres. It will also be equipped to operated in harsh environment conditions.

The charter is expected to being in the third quarter of 2016. The fact Noble referred to the four-year charter as an "initial contract" suggests the Norwegian state oil company also holds one or more contract extension options.

Statoil operates the Mariner field where it is joined by partners JX Nippon Exploration & Production and Cairn Energy.

Statoil has identified 145 reservoir targets to be drilled at the Mariner field from 2016. The heavy oil field will be developed using a central processing platform with a 31,000-tonne deck, along with a floating storage and offloading vessel.

The Mariner field is forecast to produce for 30 years, with production averaging around 55,000 barrels per day between 2017 and 2020.

The topsides of the platform is due to be delivered from Okpo-based Daewoo towards the end of 2016. Spain’s Dragados Offshore is fabricating the Mariner jacket. First oil from Mariner is scheduled in 2017.


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