Image Source: Noble Corp. corporate website.

What: While there were so many companies in the energy space rising by more than double digits today, offshore rig contractor Noble Corp (OTC:NEBLQ) jumped an impressive 15.6% after announcing a debt deal. 

So What: Fears of debt and rig companies being able to service that debt has been one of the hot-button topics on Wall Street for some time now. With drilling activity falling, and a glut of rigs on the market, the fear is that many of these rig companies are going to be left with too many operational costs, and not enough employed assets to service their debts. 

That is why investors seem to be keen on Noble's shares today, as the company announced that it was purchasing around $200 million in senior notes. Since Noble is doing it as a cash deal, it is also able to repurchase some of those debts at prices well below their par value. At the offer prices, Noble will be able to eliminate about $300 million in face-value debt for the $200 million it plans to spend. 

Now What: Obviously, lowering its outstanding debt levels -- and the interest expenses associated with it -- is a positive for the company. The real challenge for Noble, though, will be what it will do with the half dozen floating rigs that will come off contract in the coming months. Some of the older rigs will likely be retired, but its newer, higher-specification rigs will be too valuable to scrap, but will be a drag on profitability. As promising as today's debt announcement and price spike may be, Noble is far from out of the woods yet, and investors shouldn't overreact to today's news.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.