Noble Corporation gets continued listing warning from NYSE

Offshore rig owner Noble Corporation has received a continued listing standard notice from the New York Stock Exchange (NYSE). 

Noble Houston Colbert
Noble Houston Colbert; Source: Noble Corp.

Noble on February 19, 2020, received formal notice of non-compliance with the NYSE share price continued listing standards, which require a listed common stock to maintain a minimum average closing price of $1.00 per share for 30 consecutive trading days.

The company said on Thursday it intends to regain compliance with the NYSE’s listing standards, and as required by the NYSE, the company intends to respond to the NYSE within ten business days with respect to its intent to cure the deficiency.

Under the NYSE’s rules, Noble has a period of six months from the date of the NYSE Notice to regain compliance with the minimum share price criteria by bringing its share price and thirty trading-day average share price above $1.00. Noble can regain compliance at any time during the six-month cure period if its ordinary shares have a closing price of at least $1.00 per ordinary share on the last trading day of any calendar month during the cure period and an average closing price of at least $1.00 per ordinary share over the 30-trading day period ending on the last trading day of that month.

Under the NYSE rules, Noble’s ordinary shares will continue to be listed and traded on the NYSE during the cure period, subject to the company’s compliance with other continued listing requirements.

The company said it is considering all available options to regain compliance with the NYSE’s continued listing standards, which may include a reverse stock split, subject to approval of the company’s shareholders.

Failure to satisfy the conditions of the cure period or to maintain other listing requirements could lead to a delisting.

Earlier this week, Noble reported a net loss attributable to the company for the three months ended December 31, 2019 of $33 million on total revenues of $454 million. In the same period of 2018, Noble recorded a net loss of $33 million on revenues of $310 million.

Noble also said on Wednesday that, at the close of the company’s next annual general meeting of shareholders, Julie J. Robertson would resign as President and Chief Executive Officer, and would take on the newly created role of an executive chairman of the company’s board of directors.


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Sembcorp Marine sinks to the red amid low activity levels

Singapore’s offshore rig builder Sembcorp Marine posted a bigger loss for 2019 when compared to 2018. Quarterly, the company went from black to the red as its revenues dropped by 32% amid low activity levels. 

Source: Sembcorp Marine

Sembcorp Marine on Thursday posted a net loss of S$137 million for the 12 months ended December 31, 2019, compared with the net loss of S$74 million for FY 2018.

This was due mainly to the accelerated depreciation for the Tanjong Kling Yard of S$48 million and continued low overall business volume, the company explained. It was partly offset by profits from the repairs and upgrades business, which rose on improved margins and better product mix.

Group revenue for FY 2019 totaled S$2.88 billion, compared with S$4.89 billion booked in FY 2018.

For the fourth quarter 2019 SembMarine recorded a net loss of S$78 million compared to a profit of S$6 million in 4Q 2018.

The company’s revenues in 4Q 2019 were S$624 million, a 32% decrease compared to revenues of S$913 million in 4Q 2018.

The higher revenue in 4Q 2018 had been due to revenue recognition on delivery of a jack-up rig as well as revenue recognition of the Heerema semi-submersible crane project which was delivered in July 2019.

According to the company, business activity levels remain low for all segments except for repairs and upgrades, which continues to improve, underpinned by IMO regulations that require installation of ballast water treatment systems and gas scrubbers.

Challenges remain, in particular supply chain disruptions due to the COVID-19 virus outbreak, which could affect execution of projects. Competition remains intense for all segments of business and the company expects the trend of losses to continue into 2020, SembMarine concluded.

Offshore Energy Today Staff


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Creditors vote in favor of Premier’s North Sea deal despite objections

UK oil and gas company Premier Oil has gained approval from the majority of its creditors for the schemes of arrangement required for the acquisition of North Sea assets from BP and Dana. The schemes still remain subject to a court approval.

BP’s Andrew platform included in the deal with Premier; Image source: BP

Premier Oil received a court approval to go ahead with a plan to have its creditors vote to extend debt maturities and buy UK North Sea fields from BP and Dana in mid-January and convened the creditor meeting for February 12 despite objections by its largest creditor ARCM.

Premier announced on Wednesday that the scheme meetings of the super senior scheme creditors and senior scheme creditors of Premier and Premier Oil UK Limited were held earlier today.

The scheme meetings were held for the purpose of proposing resolutions to the scheme creditors to approve the schemes of arrangement required to implement the announced UK North Sea acquisitions, related funding arrangements, and extension of Premier’s credit facilities.

According to Premier, the resolutions at each of the scheme meetings were approved by the relevant majorities of the scheme creditors in each class being a majority in number representing at least 75% in value of those present and voting (in person or by proxy).

Namely, of the super senior scheme creditors, 86.81% in value of those voting approved the schemes with 99.30% in value voting, and of the senior scheme creditors, 83.86% of those voting approved the schemes with 96.51% in value voting.

ARCM: Court hearing not a ‘rubber-stamping’ exercise

The schemes remain subject to approval by the Scottish Court of Session with the sanction hearing currently scheduled to start on March 17, 2020.

Earlier on Wednesday, before the vote, Premier’s largest creditor, which has been opposing the acquisition since the start, said it would vote against the scheme proposal “as it believes the proposed acquisitions expose the company and its stakeholders to significant incremental risks.”

ARCM, the creditor, also said that regardless of the result of the vote, the March court hearing “is not a ‘rubber-stamping’ exercise and the Court will consider issues beyond the outcome of the vote at the creditors’ meetings in determining whether or not to sanction the schemes.”

At the sanction hearing, creditors who object to the schemes may raise their opposition, ARCM said.

“Above all, the Court must be satisfied that the statutory requirements have been met, the vote is fairly representative of the creditors concerned, there is no ‘blot’ on the Schemes, and that the Schemes are fair,” ARCM stated.

ARCM reiterated it would vigorously oppose the schemes and would take all necessary steps to do so, including opposing the sanctioning of the schemes.

Offshore Energy Today Staff


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Equinor slips to quarterly loss due to impairment charges

Norwegian oil and gas major Equinor’s financial performance in 4Q 2019 was impacted by lower oil and gas prices and huge impairments despite record production during the period. 

Source: Equinor

Equinor on Thursday reported adjusted earnings of $3.55 billion for the fourth quarter 2019, down 19% from $4.39 billion in the same period in 2018. Adjusted earnings after tax were $1.19 billion, down 23% from $1.54 billion in the same period last year. Lower prices for both liquids and gas impacted the earnings for the quarter.

Equinor’s net loss in the fourth quarter of 2019 was $0.2 billion compared to a profit of $3.4 billion in the same period of 2018.

IFRS net operating income was $1.52 billion and the IFRS net income was negative $0.23 billion, following net impairments of $1.41 billion.

Net operating income was impacted by net impairment charges of $1.41 billion, of which $1.28 billion relates to assets on the Norwegian continental shelf, mainly as a result of change in method for including tax uplift in impairment evaluations.

Equinor’s revenues decreased by 32% in 4Q 2019 totaling $15.2 billion compared to $22.4 billion in 4Q 2018.

Eldar Sætre, President and CEO of Equinor, said: “Record high production, reduced costs and continued strong capital discipline contributed to solid results in a quarter with lower commodity prices. For the year we delivered competitive returns and strong growth in capital distribution. Going forward, we expect to grow production, returns and cash flow from a world-class project portfolio, representing 6 billion barrels to Equinor with an average break-even oil price below 35 dollars per barrel. The board proposes an increase in the quarterly dividend of 4% and the launch of the second tranche of our 5 billion dollar share buy-back programme, based on an even distribution for the rest of the period.”

For the full year, Equinor’s adjusted earnings were $13.5 billion, down from $18 billion in 2018.

Record high production

Equinor delivered record high total equity production of 2,198 mboe per day in the fourth quarter, up 1% from the same period in 2018.

The flexibility in the gas fields was used to defer production into periods with higher expected gas prices. Successful start-up and ramp-up of new fields as well as new well capacity, contributed to growth in production.

The Johan Sverdrup field was put in production on October 5, 2019, and is currently producing more than 350,000 barrels per day from eight wells. The field is expected to reach plateau during the summer of 2020.

Sætre said: “Equinor is already delivering competitive returns, and we expect to grow production, returns and cash flow going forward. We are investing in a world class project portfolio coming on stream towards 2026, representing 6 billion barrels to Equinor with an average break-even oil price below 35 dollars per barrel. In addition, Johan Sverdrup phase 1 will contribute to strong growth at the Norwegian continental shelf. High quality projects like Bay du Nord in Canada, Rosebank in the UK and BM-C-33 and Bacalhau in Brazil will deliver high profitable growth internationally.”

Looking ahead, Equinor expects average annual organic capex of $10-11 billion in 2020 and 2021, and around $12 billion for 2022 and 2023. The company expects to deliver around 7% growth in production in 2020, and an average annual production growth of around 3% from 2019 to 2026. The company’s exploration activity in 2020 is projected to be around $1.4 billion.

Also on Thursday, Equinor revealed its plan to reduce net carbon intensity by at least 50% by 2050.

Offshore Energy Today Staff


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Lower prices curb ConocoPhillips profit

Oil major ConocoPhillips posted a smaller profit for the fourth quarter of 2019 compared to the prior-year period due to impairments and lower realized prices and volumes.

Ryan Lance, ConocoPhillips CEO. Image by Bartolomej Tomic

ConocoPhillips on Tuesday reported fourth-quarter 2019 earnings of $0.7 billion compared with fourth-quarter 2018 earnings of $1.9 billion.

Excluding special items, fourth-quarter 2019 adjusted earnings were $0.8 billion compared with fourth-quarter 2018 adjusted earnings of $1.3 billion.

Special items for the current quarter included primarily a non-cash impairment related to a planned Lower 48 disposition, partially offset by an unrealized gain on Cenovus Energy equity.

Full-year 2019 earnings were $7.2 billion compared with full-year 2018 earnings of $6.3 billion. Excluding special items, full-year 2019 adjusted earnings were $4 billion compared with full-year 2018 adjusted earnings of $5.3 billion.

Ryan Lance, ConocoPhillips chairman and chief executive officer, said: “Strong 2019 performance capped off a highly successful three-year period in which we transformed our business model and significantly improved our underlying performance drivers across the company.”

Production excluding Libya for the fourth quarter of 2019 was 1,289 thousand barrels of oil equivalent per day (MBOED), a decrease of 24 MBOED from the same period a year ago.

Earnings decreased from fourth-quarter 2018 due to the absence of a gain on sale of partial interest in the United Kingdom Clair Field in 2018, as well as a non-cash impairment related to the pending sale of Niobrara, lower realized prices and reduced volumes as a result of dispositions. These decreases were partially offset by the change in Cenovus Energy equity market value.

Excluding special items, adjusted earnings were lower compared with fourth-quarter 2018 due to lower realized prices and volumes. The company’s total realized price was $47.01 per BOE, 11 percent lower than the $53.00 per BOE realized in the fourth quarter of 2018, reflecting lower marker prices.

The company’s 2020 operating plan capital guidance is $6.5 billion to $6.7 billion. The plan includes funding for ongoing development drilling programs, major projects, exploration and appraisal activities, as well as base maintenance.

The company’s 2020 production guidance is 1,230 MBOED to 1,270 MBOED, including the impact of a recent third-party pipeline outage on the Kebabangan Field in Malaysia. First-quarter 2020 production is expected to be 1,240 MBOED to 1,280 MBOED.

ConocoPhillips’ UK peer BP also recorded a smaller profit in 4Q 2019 amid weaker environment despite higher production during the period.


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Chevron swings to $6.6 billion quarterly loss

Oil major Chevron sank to a loss in the fourth quarter of 2019 from a profit in the same period of 2018 due to impairments and write-offs and lower crude oil and natural gas prices.

Michael Wirth, Chevron’s chairman of the board and chief executive officer.

Chevron on Friday reported a loss of $6.6 billion for fourth quarter 2019, compared with earnings of $3.7 billion in the fourth quarter 2018.

Included in the current quarter were previously announced upstream impairments and write-offs totaling $10.4 billion associated with Appalachia shale, Kitimat LNG, Big Foot and other projects.

The company also recognized a $1.2 billion gain on the sale of the U.K. Central North Sea assets in the fourth quarter. Foreign currency effects decreased earnings in the fourth quarter 2019 by $256 million.

The company’s revenues dropped to $36.4 billion in 4Q 2019 from $42.4 billion in 4Q 2018.

Full-year 2019 earnings were $2.9 billion, compared with $14.8 billion in 2018. Included in 2019 were net charges for special items of $8.7 billion, compared to net charges of $1.2 billion for special items in 2018. Foreign currency effects decreased earnings in 2019 by $304 million.

Sales and other operating revenues in fourth quarter 2019 were $35 billion, compared to $40 billion in the year-ago period.

“Cash flow from operations remained strong in 2019, allowing the company to deliver on all our financial priorities,” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer.

“We paid $9 billion in dividends, repurchased $4 billion of shares, funded our capital program and successfully captured several inorganic investment opportunities, all while reducing debt by more than $7 billion. Earlier this week, we announced a quarterly dividend increase of $0.10 per share, reinforcing our commitment to growing shareholder returns.”

Worldwide net oil-equivalent production was 3.08 million barrels per day in fourth quarter 2019, unchanged from a year ago.

U.S. upstream recorded a loss of $7.5 billion in fourth quarter 2019, compared with earnings of $964 million a year earlier. The decrease was primarily due to $8.2 billion in impairment charges primarily associated with Appalachia shale and Big Foot. Also contributing to the decrease were lower crude oil and natural gas realizations. Partially offsetting these items were higher crude oil and natural gas production.

The company’s average sales price per barrel of crude oil and natural gas liquids was $47 in fourth quarter 2019, down from $56 a year earlier. The average sales price of natural gas was $1.10 per thousand cubic feet in fourth quarter 2019, down from $2.01 in last year’s fourth quarter.

Net oil-equivalent production of 998,000 barrels per day in fourth quarter 2019 was up 140,000 barrels per day from a year earlier.

Chevron’s peer ExxonMobil earlier on Friday posted a 5 percent decrease in earnings, which totalled $5.7 billion in 4Q 2019. Earlier this week, Hess said it had recorded a bigger loss for 4Q 2019 compared to the prior-year period.


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ExxonMobil profit falls in 4Q

Oil major ExxonMobil saw its earnings drop by five percent in the final quarter of last year compared to the prior-year period.

Exxon’s Liza Destiny FPSO

ExxonMobil on Friday reported estimated fourth quarter 2019 earnings of $5.7 billion.

Earnings included favorable identified items of about $3.9 billion, mainly a $3.7 billion gain from the Norway upstream divestment. To remind, ExxonMobil last year sold its offshore oil field interests in Norway to Vår Energi for $4.5 billion.

In the fourth quarter of 2018, ExxonMobil’s earnings totaled $6 billion.

Capital and exploration expenditures were $8.5 billion, including key investments in the Permian Basin. In the same period of 2018, ExxonMobil’s expenditures were $7.8 billion.

Oil-equivalent production was in line with the fourth quarter of 2018, at 4 million barrels per day, with a 4 percent increase in liquids offset by a 5 percent decrease in gas.

“Our operations performed well, while short-term supply length in the downstream and chemicals businesses impacted margins and financial results,” said Darren W. Woods, chairman and chief executive officer.

“Growth in demand for the products that underpin our businesses remains strong.”

For the full year 2019, ExxonMobil’s earnings decreased by 31% totaling $14.3 billion when compared to 2018’s earnings of $20.8 billion.

Earlier this week, ExxonMobil increased its estimated recoverable resource base in Guyana to more than 8 billion oil equivalent barrels and made a further oil discovery northeast of the producing Liza field at the Uaru exploration well, the 16th discovery on the Stabroek Block offshore Guyana.

The new estimate includes 15 discoveries offshore Guyana through year-end 2019 and the Uaru discovery is the first of 2020 and will be added to the resource estimate at a later date.

Offshore Energy Today Staff


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Hess sinks deeper into the red despite higher output

U.S. oil and gas company Hess Corporation sank deeper into the red in the last quarter of 2019 despite higher production levels when compared to the prior-year quarter.

Source: Hess

Hess on Wednesday reported a net loss of $222 million in 4Q 2019 compared with the net loss of $4 million in the fourth quarter of 2018.

Adjusted net loss was $180 million compared with an adjusted net loss of $77 million in the fourth quarter of 2018.

The decrease in after-tax adjusted results primarily reflects lower natural gas and natural gas liquids realized selling prices, partially offset by higher production volumes and improved Midstream earnings, compared with the prior-year quarter, Hess explained.

The company’s average realized crude oil selling price, including the effect of hedging, was $54.90 per barrel in the fourth quarter of 2019, versus $55.24 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the fourth quarter of 2019 was $13.87 per barrel, versus $21.19 per barrel in the prior-year quarter, while the average realized natural gas selling price was $3.48 per mcf, compared with $4.82 per mcf in the fourth quarter of 2018.

Oil and gas net production averaged 316,000 barrels of oil equivalent per day (boepd), excluding Libya, up from 267,000 boepd in the fourth quarter of 2018. The higher production was primarily driven by the Bakken. Net production from the Gulf of Mexico was 70,000 boepd, compared with 68,000 boepd in the prior-year quarter.

Exploration and Production (E&P) capital and exploratory expenditures in 4Q 2019 were $876 million, compared with $618 million in the prior-year quarter.

As previously reported, Hess’ E&P capital and exploratory expenditures for 2020 are expected to be $3 billion. Hess plans to use more than 80% of it on high return investments in Guyana and the Bakken.

Oil and gas production in 2020, excluding Libya, is forecast to be in the range of 330,000 boepd to 335,000 boepd, compared to full year 2019 net production, excluding Libya, of 290,000 boepd.


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Bristow to merge with Era to create offshore helicopter giant

Offshore helicopter operator Bristow and its peer Era Group have made a deal to merge in an effort to create a more diverse and financially stronger player.

A Bristow helicopter; Author: Ronnie Robertson

Bristow and Era Group announced on Friday that they had entered into a definitive agreement to combine the two companies in an all-stock transaction, creating a financially stronger company with enhanced size and diversification.

It is worth reminding that Bristow emerged from Chapter 11 bankruptcy back in November 2019. Bristow managed to reduce its debt significantly and emerged with $535 million of new capital.

“The combined company, which will be named Bristow, will strengthen its global leadership position with significant operations throughout the Americas, Nigeria, Norway, the United Kingdom and Australia for offshore aviation transportation and search and rescue solutions,” the two companies said.

“We believe this merger will create substantial value for the stakeholders of both companies,” said Chris Bradshaw, President and CEO of Era.

“The identified cost synergies are significant and, combined with the strong pro forma balance sheet and absence of capital commitments, support robust free cash flow generation. This merger achieves more efficient absorption of the significant fixed costs required to run an air carrier and better positions the combined company to manage industry challenges.”

“Bristow and Era share complementary cultures built on an unwavering commitment to safety and quality through experienced, well-trained trained pilots, mechanics, engineers and support staff,” said L. Don Miller, President and CEO of Bristow.

The merger will create a player with a combined fleet of more than 300 of modern aircraft and the world’s largest operator of S92, AW189, and AW139 model helicopters, according to the two companies.

The merger is expected to achieve pro forma annual revenues of approximately $1.5 billion and run-rate adjusted EBITDA of approximately $240 million. It will enable substantial and highly achievable cost synergies with an annualized saving of at least $35 million through the elimination of redundant corporate expenses and the realization of enhanced operational efficiencies.

Era CEO to head new company

Following completion of the transaction, the combined company will be headquartered in Houston, Texas. Chris Bradshaw, President and CEO of Era, will become President and CEO of the combined company. The senior management team will be named at a future date.

The combined company will have a nine-member board of directors, including seven members from Bristow and two members from Era, including the CEO. The Chairman and Vice-Chairman of the board of directors will be appointed by Bristow.

The transaction will be structured as a reverse triangular merger whereby Era will issue shares to Bristow stockholders. Era shares will continue to trade on the NYSE.

Under the terms of the agreement, which was unanimously approved by the board of directors of both companies, Bristow shareholders would own 77% of the equity of the new company and Era shareholders would own 23%.

The transaction is expected to close in the second half of 2020, following receipt of required regulatory approvals and satisfaction of other customary closing conditions, including approval by Bristow’s and Era’s stockholders. The merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.


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Creditor calls for ‘transparent responses’ over ‘unclear details’ of Premier’s North Sea deal

Premier Oil’s largest creditor, ARCM, has raised new concerns regarding Premier’s proposed acquisition of North Sea assets from BP and Dana Petroleum and called upon Premier to provide full and transparent responses. 

BP’s Andrew platform included in the deal with Premier; Image source: BP

Premier in early January proposed to buy the assets through a scheme that would allow it to extend debt maturities. Despite ARCM’s objections, Premier last week got an approval from the court to go ahead with the plan to have its creditors vote to extend debt maturities and buy the North Sea assets.

Upon receiving approval from the court, Premier said it would convene the creditor meetings for the schemes, to be held on February 12, 2020, with the schemes sanction hearing expected to take place in March.

ARCM, Premier’s largest creditor, holding more than 15% across the company’s debt instruments with blocking positions in two of them, on Friday noted Premier Oil’s announcement on the convening of scheme meetings to once again extend debt maturity and to approve the making of acquisitions.

ARCM reiterated that the proposed acquisitions would expose the company and its business to significant incremental risks.

ARCM’s opposition to these proposed acquisitions has to be considered within the context that ARCM has not previously opposed any of the company’s consent requests involving investments since it became a lender to the company in 2016, the creditor said.

Upon a review of Premier’s January 7 presentation, ARCM noted that there were “a number of important details which are unclear yet are critical to enable stakeholders to meaningfully assess the merits of the acquisitions.”

ARCM also said that, over the next few weeks, it would pose a series of questions to the company relating to the acquisitions and called upon Premier to provide full and transparent responses to its stakeholders.

Offshore Energy Today Staff


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