Noble to Split Offshore Drilling Business

Switzerland-based Noble Corporation (NYSE: NE) announced today that it will be splitting up its drilling business into two distinct offshore drilling companies, one focused on high specification and deep/ultra-deepwater drilling, and the other consisting of their “standard specification drilling units” which includes five drillships, three semi-submersibles, 34 jack-ups, two submersibles, one FPSO and the Hibernia platform offshore Canada.

Noble notes that the separation of their company may be preceded by an initial public offering of up to 20 percent of the shares of the new company.

Noble hopes the split-up of the company will provide a platform for the growth of the two businesses, a more attractive offer to the financial markets, and help to align the compensation plans with with the performance of these different businesses.

The question on the minds of those who work for Noble Drilling, and who may find themselves working for this new spinoff will likely be, “will I be taking a pay cut?”

Speaking with a roughneck working for one of their competitors recently, there does appear to be a significant delta between deepwater drilling pay and shallow-water/jack-up drilling pay, so the potential appears to exist.

David W. Williams, who will remain as Chairman, President and Chief Executive Officer of Noble, commented on the plan noting, “The purpose of the separation is for Noble to move forward with our development as a robust high specification and deepwater drilling company through continued execution of newbuilds and fleet enhancements.  By separating these two businesses, we believe each company will be able to better leverage the overall value of its fleet by focusing on the drivers of its particular business.”

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