Shell has exercised its right to idle two Noble ultra-deepwater drillships.
The move was part of an amendment to long-term contracts between the pair for the Noble Bully II, Noble Globetrotter I and Noble Globetrotter II. The trio were operating under 10-year contracts, which started in April 2012.
Shell has decided to idle Globetrotter II for up to two years, starting in January. During the idle period, a negotiated rate of $185,000 per day will be paid.
It will also idle Noble Bully II for up to a year. During this idle period, a negotiated rate of $200,000 per day will be paid.
Noble has discretion over each rig’s operating costs throughout the idle period, with the flexibility to reduce costs over the anticipated period. If warm stacked, Noble expects daily cost savings on each rig of at least $100,000 per day, with additional cost savings should Noble elect to cold stack the units. In addition, Noble can enter into contracts with third parties for the Noble Globetrotter II and the Noble Bully II during the idle periods.
David W. Williams, chairman, president and CEO of Noble Corporation, said, “This mutually beneficial agreement provides Noble with clarity on dayrates and subsequent operating cash flows through the duration of the contracts on each of the three rigs. We also retain the future upside if the recent oil price recovery drives new market opportunities. These amendments will provide Noble with enhanced financial flexibility at a time when the offshore industry is experiencing a cyclical bottom and the timing of the inevitable recovery remains unknown.”