Noble Corporation’s board has approved the spin-off of Paragon Offshore, a wholly-owned subsidiary of Noble, through a pro rata distribution of an aggregate of 84,753,393 Paragon ordinary shares to the holders of Noble ordinary shares.
Noble shareholders were due to receive one ordinary share of Paragon for every three ordinary shares of Noble as July 23.
Following completion, Paragon will be a separate, publicly traded company, and Noble will not retain any ownership interest in Paragon.
This is a huge step for Noble, which has a large fleet of mobile offshore drilling units of which a significant number pass to Paragon ownership.
Until the spin-off, Noble had a fleet of 77 offshore drilling units (including one ultra-deepwater drillship and three high-specification jack-up drilling rigs currently under construction).
Following completion of the separation of Paragon, Noble will own and operate one of the most modern, versatile and technically advanced fleets in the offshore drilling industry.
The 35-rig post-spin fleet will comprise 20 semi-submersibles and drillships and 15 jack-ups, and will be focused largely on ultra-deepwater and high-specification jack-up drilling opportunities in both established and emerging regions worldwide.
“The successful launch of Paragon is an important strategic step for Noble,” said David Williams, chairman, president and CEO of Noble Corp.
“Noble will exit this process with a top tier fleet, a substantial contract backlog and a sharp focus on the high-specification drilling market, elements that, when joined with our exceptional crews, position Noble as a leader in the business for many years to come.
“At the same time, Paragon is positioned to excel in the standard specification drilling sector, with well-maintained and efficient rigs, highly-competent crews, a strong customer base and a talented management team.”
Paragon is a pure-play global provider of standard specification offshore drilling rigs.
Its fleet consists solely of 42 standard specification rigs and includes 34 jack-ups and eight floaters (five drillships and three semi-submersibles).
The company’s primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world.
The company is headquartered in Houston.
There is a near 100-year history behind these companies.
In 1921, Lloyd Noble formed a partnership with Art Olsen to start a land drilling business in Oklahoma. Art and Lloyd eventually parted ways, and Lloyd kept growing the drilling business.
During the Great Depression, when some customers lacked cash to pay for his services, Noble Drilling accepted production from wells as a form of payment. Lloyd formed a producing company named “Samedan Oil Corporation” after his three children (Sam, Ed and Ann), that would eventually go on to become Noble Energy.
As the drilling business grew, Noble Drilling expanded offshore, drilling the first well off the Atlantic coast in North Carolina and commencing operation in the US Gulf of Mexico.
In 1981, Noble Drilling built its first new-build jack-up units, the Noble Ed Holt (Paragon L1112) and the Noble Sam Noble (Paragon L1114). Both units continue to be in operation today – a testament to the ongoing programmes undertaken by Noble to maintain and upgrade their rigs.
The fleet continued to grow through the acquisition of companies like Bawden, Transworld, Western, Chiles and Neddrill, as well as one-off units. Noble also expanded into deeper waters in both the US Gulf of Mexico and Brazil.
In 2005, Noble began a new-build programme designed to modernise the fleet. The company also acquired Frontier Drilling in 2010 with its combination of new-build high specification units and existing standard specification units.
In September 2013, after comprehensive consideration, Noble announced that it would create a separate standard specification drilling company.
This company, which became Paragon Offshore, would operate standard specification shallow water, midwater and deepwater assets, while Noble would retain the high specification and ultradeepwater units.
That spin-out has finally been accomplished.
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