What happened

Shares of offshore-drilling contractor Noble Corporation (NYSE:NE) were up more than 15% on Wednesday, following news after market close on Tuesday that the company has named industry veteran Stephen Butz as its new CFO. 

So what

The press release said that Butz, who was CFO at Rowan prior to its merger with ENSCO (which was recently renamed Valaris), will join the company in his new role on Thursday. He also was CFO of Hercules Offshore through 2014, when he left to join Rowan. 

Jack-up rig in rough seas.

Investors are betting a new CFO can help Noble ride out a rough environment. Image source: Getty Images.

In general, it's not common for a stock to surge by nearly 20% on the hiring of any executive other than the CEO. So why the big jump? In short, because Noble stock has fallen into penny-stock territory, having traded for less than $1 per share prior to today's big increase. Moreover, its market capitalization -- the total market value of all its shares -- was still less than $270 million even after today's big increase. 

In other words, it doesn't take much trading activity to push Noble's share price around a lot right now. 

Now what

It's definitely positive that the company was able to land an experienced financial executive with a track record as CFO in this industry. The energy industry is notoriously cyclical, and offshore drillers especially have had a tough five years. An experienced hand on the financial reins should prove a good thing for the company. 

But it still has $3.9 billion in long-term debt, with about $400 million due in the next year, and only about $136 million in cash and equivalents on its balance sheet. It has also burned through $171 million in free cash flow over the past 12 months, and only generated $97 million in operating cash. In other words, the market is clearly concerned that the company could struggle to meet its financial obligations. 

Having an experienced, well-connected CFO could help. It looks like investors are partly counting on that, based on today's big jump.