NE: Compromise in the Gulf

Analysts at Oppenheimer & Co reiterate their "perform" rating on Noble Corporation NE, while reducing their estimates for the company. According to Oppenheimer & Co,” Noble announced it has negotiated an agreement on its contract for the Clyde Boudreaux (10,000' semi) with Noble Energy in light of the six-month ban on deepwater drilling in the Gulf of Mexico…. Operators have a few options under the moratorium. They can continue in the Gulf performing allowable maintenance activities, negotiate a standby rate, mobilize elsewhere, or declare force majeure. Given the hurdles with the latter two, we see a negotiated settlement like this as the most likely outcome for most of these contracts.” “A federal judge moved to block the drilling ban yesterday. Obama's administration won't appeal the ruling but instead will issue a 6-month moratorium with improved justification. We view the moratorium as a political decision (coinciding with election season), but think the economic pain could incentivize the administration to end it in November,” the analysts say. Oppenheimer & Co has lowered its EPS estimate for 2010 from $4.68 to $4.58. More Analyst Ratings here