Noble Corporation plc NE, an offshore drilling contractor, has announced that it plans to permanently retire two cold-stacked drillships from its rig fleet. The company plans to divest the Pacific Meltem and Pacific Scirocco rigs and permanently keep them out of drilling operations. The plan includes the possibility of completely scrapping the units.

NE’s decision to permanently withdraw these rigs from its fleet is aimed at reducing costs associated with these units and focusing on optimizing its current rig fleet. The two drillships have been out of service in Las Palmas for years. The Pacific Meltem completed its last assignment in 2020, while the Pacific Scirocco did the same in 2017.

The Pacific Meltem has a Samsung 98k design. It can operate in moderate environments at depths of up to 12,000 feet underwater. The drillship was upgraded in 2014. The Pacific Scirocco features a Samsung 12000 double-hull design and can operate at depths of up to 12,000 feet underwater.

Noble mentioned that its decision to retire these drillships is based on a continuous cost-benefit assessment of its idle assets. The decision is expected to be immediately accretive to the company’s cash flow and should optimize its rig fleet moving forward.

NE’s Zacks Rank and Other Key Picks

NE currently carries a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the energy sector are Sunoco LP SUN, SM Energy SM and Archrock Inc. AROC. Sunoco and SM Energy currently sport a Zacks Rank #1 each, while Archrock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores and distributors. Its current distribution yield is greater than that of the industry's composite stocks, providing unitholders with consistent returns.

SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The increased production, combined with the favorable oil price environment, is expected to positively contribute to its bottom line.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

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