The falling price of oil this spring hasn't put a damper on drilling rig owners, and Noble (NYSE: NE ) has shown that it's starting to pile up profits.
In the second quarter, which the company reported yesterday, revenue rose 43.1% to $898.9 million and net income more than tripled to $159.8 million, or $0.63 per share. This was also a big increase from the $0.47 per-share profit the company reported in the first quarter of the year as well.
It should be no surprise that ultra-deepwater drilling is driving the growth with the addition of three new rigs to the fleet. Ultra-deepwater now accounts for 33% of revenue and there are another five rigs under contract.
Operationally, the company appears to be hitting on all cylinders and will likely continue to in the future. Seventy-nine percent of the floating rig fleet and 84% of the jackup fleet are under contract for the remainder of 2012, and 80% of the floating rig fleet days are committed for 2013.
Over at competitor Diamond Offshore (NYSE: DO ) , revenue fell 17% to $738.2 million, partially because of the sale of five rigs. The company reported $201.5 million, or $1.45 per share, in net income, easily outpacing estimates.
Deepwater is still hot
There doesn't appear to be any slowdown of momentum in the ultra-deepwater segment. Transocean (NYSE: RIG ) announced a $595,000-per-day contract yesterday and Diamond Offshore signed a contract worth $490,000 per day for a rig that is currently under construction.
Seadrill (NYSE: SDRL ) and Ocean Rig (Nasdaq: ORIG ) are even more leveraged in the ultra-deepwater space and should post strong results this quarter as well. Noble has shown that results are improving for ultra-deepwater and I think the trend will continue if oil doesn't collapse. The other advantage is that ultra-deepwater drilling contracts are normally much longer than shallow-water deals, giving investors some earnings security.
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