Rig contractor Noble Corporation (NE) announced that it is working on fixing problems with the drillship Noble Discoverer, identified by the US Coast Guard in an inspection, as well as other potential issues the company found in an internal appraisal.
The U.S. Coast Guard alleged that several components and systems aboard the company’s drillship require attention. The ship’s propulsion and safety management systems were the main concerns. Noble also found some other potential regulatory non-compliance problems associated with its operations, comprising likely unlawful collected water disposals taking place outside the period of drilling operations.
Noble intends to equip the ship prior to the Arctic drilling season that commences in June 2013. The company has already worked out numerous problems with the Noble Discoverer recognized by the Coast Guard. Currently, the ship is being moved to the shipyard and the remaining items will be resolved in course of the prior scheduled shipyard stay in Washington.
The current customer of Noble Discoverer — Royal Dutch Shell (RDS.A) — and Noble, along with the Coast Guard are assessing the drillship’s operations in Alaska as well as the impact of the 2012 Arctic operating conditions. These assessments are likely to assist the companies in increasing the promptness of the drillship and other drilling assets for 2013.
Moreover, Noble is designing an improved plan to make sure that its drilling rigs and their allied management procedures are in conformity with applicable maritime laws and leading industry practices. Noble has not made any commitments with respect to the timing, impact or result of the Coast Guard examination or its own appraisal into these regulatory matters.
Noble holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation for the stock.
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