Should the Obama administration win its bid to impliment a new deepwater drilling ban in Gulf waters — Noble Drilling (NE-$31.87) could find itself with idled rigs, with limited options for favorable contract renewal terms.
Noble had six rigs operating in U.S. Gulf waters, prior to the initial deepwater drilling ban. A win in the courts for the Obama administration — i.e., a reinstated moratorium — could have immediate negative financial implications for Noble, as approximately 30 percent of its approximately $7.5 billion in contracted drilling backlog comes from U.S. Gulf of Mexico operations.
Need further convincing that an offshore drilling moratorium could cripple U.S. exploration activities: After a force majeure declaration, Diamond Offshore Drilling (DO-$64.24) is moving the Ocean Endeavor rig, which had been contracted at about $290,000 per day from Devon Energy (DVN-$63.31) in the Gulf of Mexico, to Egypt under a new deal with Burullus Gas Co. The new day rate is only $225,000, said a spokesman for Diamond, the second-largest drilling contractor by market value.
As the Endeavor rig is contracted overseas through mid-2011, don't expect to see this – or other rigs looking to leave U.S. waters – drilling for oil here at home anytime soon.
Noble had six rigs operating in U.S. Gulf waters, prior to the initial deepwater drilling ban. A win in the courts for the Obama administration — i.e., a reinstated moratorium — could have immediate negative financial implications for Noble, as approximately 30 percent of its approximately $7.5 billion in contracted drilling backlog comes from U.S. Gulf of Mexico operations.
Need further convincing that an offshore drilling moratorium could cripple U.S. exploration activities: After a force majeure declaration, Diamond Offshore Drilling (DO-$64.24) is moving the Ocean Endeavor rig, which had been contracted at about $290,000 per day from Devon Energy (DVN-$63.31) in the Gulf of Mexico, to Egypt under a new deal with Burullus Gas Co. The new day rate is only $225,000, said a spokesman for Diamond, the second-largest drilling contractor by market value.
As the Endeavor rig is contracted overseas through mid-2011, don't expect to see this – or other rigs looking to leave U.S. waters – drilling for oil here at home anytime soon.
http://www.bnet.com/blog/sec-filings
Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.
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