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| Noble knocked as Chevron cancels rig contract |
| [30.08.2007, 11:13pm, Thu. GMT] |
| Shares of offshore driller Noble fell more than 4% today after the company said US supermajor Chevron put an early end to a contract for a rig in Nigeria. In its fleet status report filed with regulators today, Noble said Chevron had ended its contract for the jack-up rig Noble Roy Butler about four months early. "It had nothing to with rig performance or safety," John Breed, a spokesman for Noble, told Reuters. "It allows us to market the rig four months earlier with the goal of achieving a higher dayrate in a high rig demand period worldwide." |
Shares of Houston-based Noble were off 3.3% to $49.49 in afternoon trade on the New York Stock Exchange after falling as low as $48.82.
"Early termination of Noble's jackup 'Roy Butler' in Nigeria is going to raise eyebrows," Tudor Pickering & Company Securities wrote in a note to clients.
"Is this simply Nigeria instability or something broader? Probably former, but datapoint will bring out offshore drilling sceptics saying rig oversupply."
Noble also reported that delivery dates for four newly built rigs have been pushed back by a couple of months.
A Houston-based spokesman for Chevron was not immediately available to comment on why it ended the contract early.
There are a number of new jack-up rigs currently under construction, which has led to investor worry about those rigs flooding the market and pushing dayrates down.
The dayrate on the Noble Roy Butler was between $129,000 and $131,000, according to a filing with the US Securities & Exchange Commission (SEC).
In June, Noble said it was investigating whether its Nigerian affiliate made illegal payments to customs agents while trying to get permits to bring drilling equipment into the waters of the West African nation.
In its last quarterly filing with the SEC, Noble said it had not been able to obtain or renew permits for five of its seven rigs operating there due to its bribery probe. The company cautioned in the filing that it might have to cancel contracts if the proper permits were not obtained.
Noble's Breed declined to discuss whether the Chevron decision was related to permitting difficulties.
A number of other contract drillers are under scrutiny by the US Department of Justice and the SEC to determine whether the companies or their agents violated the US Foreign Corrupt Practices Act.
Under that law, it is illegal for US companies or their agents to win business abroad by paying bribes. |
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