Fitch Ratings Affs Noble Drilling's 'BBB+' Sr Unsec Debt Rtg.Business Editors CHICAGO--(BUSINESS WIRE)--March 13, 2002 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its 'BBB+' senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. rating on Noble Drilling Corp.'s (Noble) senior notes and the Rating Outlook is Stable. The rating is based on Noble's strong credit profile, diversified geographical operations and above-average offshore drilling Offshore drilling typically refers to the act of extracting resources, primarily oil, in an ocean or lake. Controversy As with all oil drilling, there has been a certain level of controversy surrounding the issue. fleet. Noble's credit profile is one of the best in the offshore drilling segment. For the year ended Dec. 31, 2001, interest coverage was 10.5 times (x), debt-to-EBITDA was 1.2x and debt-to-capital was 25%. With modest capital expenditures in each of the past two years, Noble has been able to significantly increase its cash position, while at the same time reducing debt. Noble's cash position at year-end was $288 million, approximately $110 million greater than at Dec. 31, 2000. During that same time frame, Noble was able to reduce debt by $94 million to $605.6 million at Dec. 31, 2001. Noble has benefited greatly in the past year and specifically in the past six months from its geographically diverse operations. The company operates 49 vessels and over 60% of its fleet drills in international waters where the focus is predominantly oil. For example, 18% of its fleet is located in the Arabian Sea Arabian Sea, ancient Mare Erythraeum, northwest part of the Indian Ocean, lying between Arabia and India. The Gulf of Aden, extended by the Red Sea, and the Gulf of Oman, extended by the Persian Gulf, are its principal arms. , 18% is located in the North Sea, 12% is located offshore West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. and 10% offshore Brazil. Utilization rates in these regions remain high and dayrates have remained relatively stable there during the past two quarters. Therefore, a majority of its fleet has not been as negatively affected as those operators concentrated in the shallow Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east market. Noble has a strong fleet of jackup rigs and floating vessels. Of the 49 vessels previously mentioned, 34 (69%) are jackup rigs. Approximately 20 of the 34 jackup vessels are capable of drilling in 300 feet of water or greater, which is significant because the worldwide utilization rate for jackup rigs capable of drilling in 300 feet water is currently above 90% (137/150) according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Rigzone. Also worth mentioning, of the 10 jackups it has located in the Gulf of Mexico, eight are currently being utilized. Furthermore, Noble operates nine semisubmersible sem·i·sub·mers·i·ble n. A seagoing, self-propelled barge that rides at anchor, stands on partially submerged vertical legs on submerged pontoons, and serves as living quarters and a base of operations in offshore drilling. and three drillships. Eight of those vessels are capable of drilling in at least 6,000 feet of water. With the continued emphasis on deepwater drilling projects by the majors, Noble is fairly confident that utilization rates for these vessels will remain high. Additionally, current utilization rates for these type of vessels remains very strong at 94% (66/70). While management is pleased with their current fleet, they did express a desire to further increase Noble's exposure to the deepwater drilling market. Fitch would view increased coverage of the deepwater drilling market favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. due to the stability, size and length of contracts typically associated with this type of drilling. Fitch expects any future acquisitions to be completed in Noble's typically conservative manner. Noble Drilling is a leading international provider of offshore contract drilling services for oil and gas wells. As of Dec. 31, 2001, Noble owned, had partial ownership interests in or operated more than 49 mobile offshore vessels. Noble Drilling contracts its drilling rigs related equipment and work crews primarily on a dayrate basis to drill oil and gas wells. Noble Drilling also provides contract-drilling services, well site and project management services and engineering services. |
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