Noble To Spin Off Older Drilling Rigs Into Separate Company

(RTTNews) - Offshore drilling contractor Noble Corp. (NE) said Tuesday that its board of directors approved a plan to separate the company's business into two separate and highly-focused offshore drilling companies.

Noble added that subject to business, market, regulatory and other considerations, the separation of the business may be preceded by an initial public offering of up to 20 percent of the shares of the new company, which will own Noble's older rigs.

Switzerland-based Noble has a fleet of 79 offshore drilling units, including three ultra-deepwater drillships and six high-specification jackup drilling rigs currently under construction. The company expects to execute the separation through a distribution of the shares of the new company to its shareholders in a spin-off that will be tax-free to shareholders.

The transaction is subject to the approval of Noble's shareholders, which the company anticipates seeking in the second quarter of 2014. Noble expects to complete the spin off by the end of 2014.

The new company will own and operate the drilling units comprising most of the standard-specification drilling units in the Noble fleet. This includes five drillships, three semisubmersibles, 34 jackups, two submersibles, and one FPSO. The new company will also be responsible for the Hibernia platform operations.

Noble will continue to own and operate its 35 high-specification rigs with particular operating focus in deepwater and ultra-deepwater markets for drillships and semisubmersibles as well as harsh environment and high-specification markets for jackups. Its fleet will consist of 15 jackups and 20 floaters.

David Williams, who will remain as Chairman, President and Chief Executive Officer of Noble, said, "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."

Noble said that if it proceeds with the IPO of up to 20 percent of the shares of the new company as part of the spin-off, it expects the new company to file a registration statement for the IPO with the U.S. Securities and Exchange Commission in late 2013 or early 2014.

In mid-July, Noble reported an 11 percent increase in profit for the second quarter on higher revenues and lower operational downtime. At that time, the company said it was working through the steps required to potentially spin off a portion of its fleet and move its corporate domicile to the UK.

NE closed Tuesday's regular trading session at $37.93, down $0.18 or 0.47 percent on a volume of 3.10 million shares.