Analyst reviews prospects for Noble/Maersk combination

Nov. 15, 2021
The merger between Noble Drilling and Maersk Drilling will create the world’s third’s largest offshore rig owner, according to Westwood’s RigLogix division.

Offshore staff

LONDON – The merger between Noble Drilling and Maersk Drilling will create the world’s third’s largest offshore rig owner, according to Westwood Global Energy Group’s RigLogix division.

With 39 rigs (barring divestments), China Oilfield Services Ltd. (COSL) and Valaris have larger fleets. Among the 15 drillships only one is more than 10 years old with the remainder averaging 8.1 years.

Two of the vessels, currently cold stacked, are the only ones not contracted or committed for future work. Five of the 13 others have contracts that end in the first half of next year, although only two have options that would keep them employed through 2022 or beyond.

Average day rate is around $223,776, with one vessel on just below $200,000. These levels are some way below average day rates secured by Transocean, which would operate the fourth largest overall rig fleet. Some Transocean drillships are earning $450,000/d plus, based on long-term contracts signed during 2011-2013.

The addition of the four Maersk drillships may lead Noble to dispose of some of the former Pacific Drilling vessels it had contemplated retiring, suggested Terry Childs, head of RigLogix.

Maersk/Nobles semisubmersible fleet will comprise five semis, four from Maersk and one from Noble. One of the five is cold stacked, while the other four are contracted.

The Noble Clyde Boudreaux is due to come off a contract this month, but a follow-up deal may be in place for an assignment in Southeast Asia, while the other four Maersk semis will stay on contracts until July 2022.

The average age of the fleet is 17.7 years, with current day rates for three of the four rigs of $212,662, including the 34-year-old Boudreaux’s current $117,000.

Average day rates for semis owned by Odfjell, Transocean and Seadrill are higher, but their fleets include harsh-environment semis working offshore Norway, which command higher fees than the rest of the world.

Finally, the combined jackup fleet will comprise 11 rigs from Maersk and eight from Noble, with current utilization at 79%.

Three of the jackups have become idle within the last month. However, one, currently in the North Sea, is said to be in the frame for a contract in the Middle East. Two of the 15 contracted rigs are due to finish contracts this year, while five have assignments into 4Q 2022 or later.

Average day rate for the harsh-environment jackups is $311,000, the remainder of the fleet thought to be averaging around $96,000. And although seven of the fleet are 12 years old or more, the average age is 9.5 years.

Outside of the day rates, the combined company will have the second youngest fleet among its peers and a near 80% utilization, Childs said, with only four idle rigs.

COSL’s backlog could more than double if all the rigs working for CNOOC have their contracts renewed for 2022. But Shelf Drilling has almost three times the backlog days as COSL, much of this down to multiple 10-year contracts with Saudi Aramco.