By April 27, 2016 Read More →

Noble Corp profit plunges 41 per cent as oil price slump continues

Noble Corp profit fell to $105.5 million

Noble Corp

Operating revenue for Noble Corp fell nearly 24 per cent to about $162 million.  Noble photo.

April 27 (Reuters) – Noble Corp Plc’s quarterly profit plunged nearly 41 percent as the prolonged slump in oil prices pulled down rig demand and rates.

The net profit attributable to Noble fell to $105.5 million, or 42 cents per share, while operating revenue declined nearly 24 percent to about $612 million. Excluding items, the company earned 31 cents per share, missing the average analyst estimate of 33 cents, according to Thomson Reuters I/B/E/S.

The prolonged slump in oil prices has led to a steep decline in drilling activity, mainly in the offshore market, as oil and gas producers cut costs.  Noble’s average rig utilization fell to 79 percent in the first quarter ended March 31 from 86 percent, a year earlier.

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation plc, said “In addition to the excellent operational performance, we maintained strong financial metrics, with our debt to total capital ratio improving to 36 percent, following the repayment in the quarter of senior notes with available cash.”

Williams added “Liquidity remained strong at $2.7 billion, providing excellent financial flexibility and has been fortified by $130 million a year following the decision to adjust the quarterly dividend to $0.02 per share from $0.15 per share. ”

In its near-term industry outlook, Williams noted that despite recent increases in the price of crude, the challenges remain for the oil industry.  “We believe a reset of industry fundamentals is in progress and improved future offshore activity is inevitable.”

Though Williams did not speculate on when the industry would recover, he did say “we know that higher and sustained commodity prices, geologic success and global project cost rationalization will drive offshore activity higher.”

Noble’s shares were up slightly at $12 in extended trading on Wednesday.

Up to Wednesday’s close, the stock had fallen nearly 27 percent in the past 12 months, while the S&P 500 Oil & Gas Drilling index had declined 28 percent.

(Reporting by Manish Parashar in Bengaluru; Editing by Kirti Pandey)


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