Noble Corp.’s profit fell 75% in the second quarter, in part because of rig service interruptions in the Gulf of Mexico (GOM), CEO David Williams said Thursday.

Williams said during a conference call with energy analysts that it had been a “frustrating” time for the contract driller. Quarterly results were “significantly hindered by several downtime events involving five rigs.” However, while “we were disappointed by the interruption in service on these rigs, most of which pertained to subsea equipment and control systems, four out of five rigs returned to service prior to the end of the second quarter.”

The company earned $54.1 million (21 cents/share) in 2Q2011, down from $217.9 million (85 cents) in the year-ago period. Revenue plunged 12% to $628 million.

Noble’s top line of drilling rigs was hurt as customers tried to get out of long-term GOM drilling contracts. Marathon Oil Corp. canceled a four-year $752 million contract for one of the company’s deepwater rigs, which led Noble to sue the producer. Noble is seeking its $42 million rig mobilization fee and the $515,000 day rate for Marathon’s contract term.

Noble owns the third-largest offshore drilling fleet after Transocean Ltd. and Ensco plc. It is poised to benefit along with its peers from a recovery in day rates, Williams said. Today the company is spending billions to build 11 new rigs to update its fleet. Most of the current rig fleet across the board, he said, can’t drill in ultra-deep water where producers want to explore.

The “ultra deepwater market is tightening, giving a lift up for more deepwater rigs,” he said. “What we are seeing is demand outside of the Gulf and we see term opportunities and we still are seeing well-to-well opportunities.”

Noble expects to pick up more GOM contracts but there remains a risk of idle rigs going forward, said the CEO.

The GOM deepwater drilling “moratorium is over but we’ve seen rigs go idle in shallow water. I think there’s a risk [for deepwater as well]. There’s always a risk…A lot of regulators around the world are looking to see how things shake out” since the tragic Macondo well blowout last year. “Most of them would say they think they have rules that are appropriate.”

If rules are applied to offshore operations “differently in different parts of the world, I’m think there’s a risk. That’s why I’m cautioning you that it could take months, years to find out. I hope it doesn’t happen and we hope to keep up with it. We have appropriate systems in place and we cover our risks by contract. We’ll see…The Gulf of Mexico is in a good place and we’re in a good spot going forward.”

A recovery for Noble is “likely” in the third quarter, said Canaccord Genuity analysts. They currently estimate earnings will increase to 67 cents/share in 3Q2011 “but are wary of the potential for additional surprise downtime. Management indicates that four of the five rigs that had unscheduled off-hire time during 2Q2011 are now back online, contributing to the likely increase…”

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