Revisiting Noble Corporation Investment Thesis and Importance of Sell Discipline

Over the past eight months, a number of articles have appeared on The Rational Walk related to the Deepwater Horizon disaster and related investment opportunities. Value investors know that times of stress and uncertainty create opportunities in the financial markets whether the turmoil is due to natural disasters, political unrest, or the fallout from accidents such as the Deepwater Horizon incident. In this article we revisit our bullish investment thesis for Noble Corporation and explain our decision to sell shares at the current valuation.

Noble Corporation Q3 Results Impacted by Moratorium But Worst May Have Passed

Noble reported third quarter 2010 earnings of $86 million, or $0.34 per share, compared to $426 million, or $1.63 per share for the third quarter of 2009. Contract drilling revenues fell precipitously to $584.9 million for the third quarter of 2010, down from $875 million for the third quarter of 2009. Contract drilling revenues were $687.5 million for the second quarter of 2010. Read this article for more information and a forecast of likely Q4 revenues.

Noble CEO Forecasts Continued Gulf of Mexico Uncertainty Ahead

Noble Corporation Chairman and CEO David Williams believes that uncertainty in the Gulf of Mexico will continue to impact the offshore drilling industry for some time to come. Mr. Williams, speaking today at the Barclays Capital Energy and Power Conference in New York, updated investors regarding the company’s operations and future prospects in light of continued regulatory uncertainty in the Gulf of Mexico in the aftermath of the Deepwater Horizon disaster involving the blow out of the Macondo well. Read this article for a summary of the presentation.

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