Category Archives: Offshore

President Trump's White House is a flurry of activity as it pushes to chalk up tangible achievements before Trump hits 100 days in office on Saturday, and on Wednesday, Trump will sign executive orders on education and public lands. One of the orders will instigate an Interior Department review of all national monuments designated by his predecessors since 1996, with a perceived goal of opening more protected public lands to drilling, logging, and mining; the other will order Education Secretary Betsy DeVos to study how the federal government "has unlawfully overstepped state and local control," a White House official tells The Washington Post.

On Friday, Trump will sign yet another executive order, this one seeking to lift bans on offshore drilling in the Atlantic and Arctic Oceans put in place by former President Barack Obama, The New York Times reports. It will order Interior Secretary Ryan Zinke to study an Obama mandate to block offshore drilling in those waters through 2022, and call for a repeal of a permanent ban on drilling in Arctic and Atlantic areas Obama enacted in December 2016, using a provision of the 1953 Outer Continental Shelf Lands Act. It isn't clear how much any of Trump's orders will accomplish.

DeVos already has the necessary authority to reverse Obama-era guidance to public schools and universities on a range of issues, as she has already done by pulling back protections for transgender students. Likewise, Trump is able to cancel Obama's temporary ban on drilling in the Arctic and southern Atlantic Coast, pending litigation. But since Teddy Roosevelt signed the Antiquities Act, no president has reversed the designation of a national monument. "The Antiquities Act language does not include any authority for presidents to rescind or modify a national monument created by predecessors," Mark Squillace, an expert on natural resources law at the University of Colorado Law School, tells The New York Times. "That authority is limited to Congress." And Trump faces similarly uncharted waters with Obama's permanent ban on drilling.

The eventual outcomes may not be the most important thing to Trump this week, The Washington Post suggests. "In many ways, Trump, more than any modern president before him, runs his White House like a television drama, believing that sometimes projecting an image of energy and progress is as important, if not more so, than the reality," and this week, "doing something, anything, is better than the perception of stagnation." Peter Weber

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New Trump executive orders will take aim at protected public lands, offshore drilling bans - The Week Magazine

Last week was a tough one for crude oil prices. They fell by 7% and are now below $50 bbl., the magic number that drives oil companies to spend more money. It wasnt very long ago that oil prices were firmly planted in the $40s as concerns about the oil glut not disappearing fast enough grew amid weekly inventory reports showing supplies growing rather than shrinking.

To counteract that narrative, OPEC launched a public relations offensive to demonstrate high compliance with the November 2016 production cut agreement among members. (The organization has glossed over the fact that cuts agreed to by key non-OPEC exporters have been slower to materialize, noting that these countries always said that it would take time for them to meet their goals.) With inventory data suddenly turning bullish, a rally in crude oil futures drove prices to the mid-$50s bbl. The good times were saved!

As oil prices started slipping early last week, OPEC officials cranked the PR machine up again, saying that a preliminary agreement among leading Gulf producers to extend the production cuts had already been reached ahead of the May 25 organizational meeting. The only doubt was whether producers would commit for another six months or for only three.

The news on extended cuts came as the International Monetary Fund (IMF) announced a boost in global economic growth projections, the engine of oil demand. The IMF now predicts global growth of 3.5% in 2017, up from 3.1% recorded for 2016. The IMF sees 2018 growth being 3.6%. The key consideration involves more growth from the worlds advanced economies, such as the U.S., Japan and Europe, all significant energy consumers.

With oil prices sitting about 50 cents below the magical $50-bbl. level, producers are unlikely to adjust their spending plans. Thats both good and bad, but in reality, the pace of the oilfield recovery onshore is operating at about maximum speed. Offshore remains a different story, and timing has worked against it. The lift to oil prices from the production cuts announced last year came too late in company planning cycles to allow any major boostin offshore spending for 2017. If oil prices stabilize in the range of $50 bbl., oil company confidence will grow. With offshore breakeven prices dropping, more projects are now competitive with onshore shale developments. As a result, we can expect to hear about more offshore project final investment decisions being made as we move into the summer.

While there will likely not be many additional rigs put to work in the coming months, the future of the recovery is becoming clearer. Next yearwill likely see the first small increase in offshore activity, and 2019 should produce not only additional work, but better pricing for rigs, boats and services. The world will need more offshore oil in the future and the major oil companies know this. They also know that cost reductions have about run their course and little more will be accomplished by beating up suppliers except the destruction of more of the service support needed to harvest the offshore prospects the companies have accumulated. From neutral into first, the industrys gears are being shifted, and the forward momentum will begin to build.

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Should falling oil prices scare the offshore industry? - WorkBoat (blog)

In a bid to fend off criticism over a dearth of achievements in his first 100 days in office, President Trump plans to sign a flurry of executive orders this week.

Among them is an executive order intended to open up new areas of offshore oil and gas drilling. "This builds on previous executive actions that have cleared the way for job-creating pipelines, innovations in energy production, and reduced unnecessary burden on energy producers," a White House official told the Reuters earlier this week.

The order calls for a review of the locations available for offshore oil and gas exploration and of certain regulations governing offshore oil and gas exploration.

Specifically, the Trump administration is hoping to open up new areas to drill in the Gulf of Mexico, plus areas in the Atlantic and Arctic Oceans. The Obama administration had previously designated the Atlantic and the Arctic off limits, and did so in such a way as to make it legally very difficult for subsequent administrations to reverse.

The road to new drilling in the Arctic and Atlantic Oceans will be long and bumpy, for several reasons. First, any attempt to open up the Arctic and Atlantic Oceans will be met with tough litigation. The Presidents authority to reverse the Obama administrations move is debatable. Second, the Interior Department will have to include tracts of drilling in its Five-Year plan, and putting acreage into the plan requires extensive environmental analysis that could span several years, especially for the Atlantic Ocean, where no drilling has taken place yet.

On top of that, even if the administration succeeds in leasing offshore acreage which will be years from now at the earliest who will be interested? Royal Dutch Shell already had a crack at the Arctic, spending $8 billion and almost a decade of work with nothing to show for it. In 2015, after completing one well in the Chukchi Sea with disappointing results, Shell abandoned the Arctic and wrote down its assets. Shells Arctic program came to a halt because of low oil prices and poor prospects in the Chukchi President Obama shut down the Arctic only after Shell had given up on it. It was a colossal failure for a region that has routinely been hyped as the next big thing in oil exploration. Related:Iceland Geothermal Project Completes Deep Drilling In Volcano

A greenlight from Trump wont change the poor economics of Arctic drilling. Although precise breakeven costs are difficult to pin down, particularly since no oil has been produced in the Chukchi Sea, it is generally assumed that oil prices need to trade over $100 per barrel. Hardly anybody expects oil prices to return to triple digit territory anytime soon, so even if the Trump administration somehow manages to open up the Arctic again, there will be very few companies willing to roll the dice on the Arctic. It is better to spend money on U.S. shale.

The Atlantic could be different. The extent of the resource base is unknown, given the lack of exploration to date. There could be a lot of oil on the U.S. eastern seaboard, or not very much at all. The best guess comes from a 2011 assessment by the Bureau of Ocean Energy Management, which put the mean estimate of total oil reserves in the U.S. Atlantic at just 3 billion barrels which is a small fraction of the 48 billion barrels in the Gulf of Mexico and the 26 billion barrels thought to be off the coast of Alaska. And that volume could turn out to be even lower.

More importantly, as an area new to exploration, production costs will be higher. At $50 per barrel, it is not at all clear that there is an economic case for Atlantic drilling. Compared to the Arctic, the Atlantic does have the virtue of having more hospitable conditions as well as proximity to existing infrastructure, such as pipelines and refineries. Nevertheless, even if Trump succeeds in opening up the Atlantic, it will take years before any acreage is listed for a lease sale, followed by many more years of seismic testing and exploration. Production is far off into the future. And that assumes companies are even interested. Related:Did OPEC Shoot Itself In The Foot?

Separately, President Trump signed an executive order on Wednesday that asks the Interior Department to review previous national monuments designations under the Antiquities Act, which allows the President to protect certain public lands. White House officials have said that past administrations have overused this power and designated large swaths of land well beyond the areas in need of protection.

The move comes after President Obama designated Bears Ears a national monument, a scenic area in Utah that is sacred area to Native communities that drew the interest of oil and gas drillers. The designation at the eleventh hour of the Obama presidency put Bears Ears off limits to the oil and gas industry, angering politicians from Utah. Texas shale company EOG Resources had received a permit to drill in the area. President Trumps executive order this week is clearly an attempt to roll back that designation.

But just as with offshore drilling, the move to rescind public lands protections will also likely face legal challenges and faces an uncertain future.

Like other executive orders signed by President Trump, the latest ones targeting new offshore drilling and drilling on public lands have made splashy headlines, but face an uncertain future.

By Nick Cunningham of Oilprice.com

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Will Trump Spark An Offshore Drilling Boom? - OilPrice.com

President Trump is expected to sign two executive orders this week aimed at increasing offshore drilling and reassessing former President Barack Obama's decisions to designate several national monuments.

Trump plans to issue the energy and public land orders in the leadup to the end of his first 100 days in office April 30, according to reports.

The Executive Order for a Review of Designations under the Antiquities Act will call for a review of how past presidents have used the Antiquities Act of 1906 to declare federal lands as national monuments, a summary of the order obtained by the Washington Examiner read.

"Past administrations have overused this power and designated large swaths of land well beyond the areas in need of protection," according to the summary. "The Antiquities Act Executive Order directs the Department of the Interior to review prior monument designations and suggest legislative changes or modifications to the monument proclamations."

A number of states have called for Obama's last-minute monument designations to be repealed. Although the order would not repeal them outright, it would begin the process for their reconsideration.

The executive order on offshore oil and natural gas drilling, called the Executive Order Implementing an America-First Offshore Energy Strategy, directs the Interior Department to begin a review of restrictive drilling policies for the outer-continental shelf. "Past administrations have been overly restrictive of off-shore energy exploration," according to a summary of the order. "The America First Energy Executive Order directs a review of the locations available for off-shore oil and gas exploration and of certain regulations governing off-shore oil and gas exploration."

The Obama administration had restricted offshore drilling in the Arctic and the Atlantic in its final five-year leasing program that begins this year. The drilling program decision was opposed as a step in the wrong direction by the industry, which has prodded the Trump administration to redo the plan.

The executive order on the monument designations is expected Wednesday, according to the Salt Lake City Tribune. The newspaper cited a senior White House official that said it will direct Interior Secretary Ryan Zinke to review the last 21 years of monument designations using the century-old law that allows the administration to make a monument determinations with the approval of Congress.

Utah has been looking for at least a scaling back of two monuments in its state: the Bears Ears and Grand Staircase-Escalante national monuments. Former Democratic President Bill Clinton created the Grand Staircase monument in the 1990s, and Obama created the Bear Ears National Monument in the waning days of his administration.

Both designations have caused pushback from top Republicans from the state, including Sen. Orrin Hatch, who has been confident that Trump would roll back the decisions. However, the order is not supposed to rescind the decisions, but will start a review process to see if either president over-extended his authority under the law.

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Trump to loosen policies on offshore drilling, monuments - Washington Examiner

In the week of his 100th day in office, Donald Trump will sign four executive orders, including ones calling for reviews of offshore drilling regulations and national monument designations on federal lands.

He also plans to to sign an order establishing an "office of accountability and whistleblower protection" at the Department of Veterans Affairs.

The new office will be charged with helping the Veterans Affairs secretary "discipline or terminate [VA] managers or employees who fail to carry out their duties in helping our veterans," according to a White House official.

Trump is expected on Tuesday to sign an executive order creating a task force "to examine the concerns of rural America and suggest legislative and regulatory changes to address them," the White House said.

The order on national monuments will direct the Interior Department to review prior monument designations under a more than 100-year-old law that authorizes the president to establish federal lands as national monuments.

And as part of the administration's push to expand offshore drilling, Trump on Friday is expected to sign a directive called the America First Energy Executive Order, calling for a review of offshore oil and gas locations and rules.

The four new executive orders will bring Trump's total to 32 in his first 100 days the most, the White House says, by any president since World War II.

Before his election, he criticized his predecessor's use of executive actions as a way of going around Congress.

"I don't think he even tries anymore. I think he just signs executive actions," Trump said of then-President Obama in December 2015. Trump pointed to the U.S. government's system of checks and balances. "That's the way the system is supposed to work. And then all of a sudden, I hear, 'He tried. He can't do it,' and then, boom, and then another one, boom."

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Trump on track to sign most executive orders in first 100 days - ABC News

Despite the fact that it posted a rise in first-quarter net profit, Singapores Keppel Corporation, the worlds largest offshore rig builder, has cautionedthat the offshore oil rig business continues to operate in very challenging conditions.

Despite the increased optimism in the market following the rebound in oil prices, the offshore business continues to face very challenging conditions. This is due to, among other factors, the oversupply of rigs and support vessels. It will take some time before the industry fully recovers, the corporation said in its Q1 results release.

Keppel Corporations net profit rose by 23 percent annually to US$186.4 million (260 million Singapore dollars), but its offshore and marine division barely managed to break even, due to significantly reduced volume of work.

While the Division continued to make a profit at the gross operating level, it was insufficient to cover our fixed costs, Keppel said.

In order to keep the offshore division fit, the rig builder said that it had mothballed two overseas yards in January and was in the process of closing three supporting yards in Singapore. In addition, Keppel is divesting its shipyard in the Netherlands, Keppel Verolme. In the first quarter alone, Keppel reduced its global direct workforce by 1,250 staff via natural attrition, early termination of contracts and retrenchments. Since the beginning of 2015, the total workforce numbers have been slashed by 49 percent, or by nearly 18,000 staff.

Analyzing Keppels Q1 performance, DBS saidthat the O&M segment was a big miss and the net orderbook dwindled.

Related:Did OPEC Shoot Itself In The Foot?

According to DBS, looking ahead, one of the main risks for Keppel is competition from Chinese and Korean peers that can impact the Singaporean groups order intake and profit margins. Another risk is the possibility that oil prices will remain lowin this case, deliveries of newbuilds and conversions already under construction could be further delayed as oil majors and asset owners slash spending.

Keppels property business, which accounts for up to 70 percent of the groups profits, is expected to remain strong and provide some cushion for the struggling offshore and marine business, DBS reckons.

By Tsvetana Paraskova for Oilprice.com

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Offshore Oil Rig Business Still Suffering, Top Rig Builder Warns ... - OilPrice.com

WASHINGTON (AP) The Latest on President Donald Trump (all times EDT):

9:35 p.m.

President Donald Trump is telling reporters he'll slap a 20 percent tariff on softwood lumber entering the United States from Canada.

The president made the comments during a gathering with conservative media outlets at the White House Monday evening.

The comments were relayed by four people who were in the room and confirmed by an administration official. One person in the room said Trump threatened that dairy products could be next.

Trump has been railing against a change in Canada that resulted in a drop in the price of ultra-filtered milk. Trump says that's harming U.S. producers in dairy states like Wisconsin and New York.

Commerce Secretary Wilbur Ross says in a statement that it has been "a bad week for U.S.-Canada trade relations."

___

9 p.m.

President Donald Trump will sign an executive order Tuesday aimed at boosting the agriculture industry.

The order will establish a task force to review policies, legislation and regulations "that unnecessarily hinder economic growth in the agriculture sector."

That's according to Ray Starling, special assistant to the president on the issue.

The administration officials who make up the task force will have 180 days to offer their recommendations.

They'll be asked to consider issues ranging from improving the quality of life in rural areas to potential changes to the estate tax.

Trump will meet with a group of farmers Tuesday after former Georgia Gov. Sonny Perdue is sworn in as agriculture secretary.

__

8:30 p.m.

President Donald Trump appears to be backing off his demand that funding for his Southern border wall be included in a bill to prevent a government shutdown at the end of the week.

Trump told a gathering of around 20 conservative media reporters Monday evening that he would be willing to return to the funding issue in September.

That's according to two people who were in the room.

The government will run out of money this coming Saturday unless lawmakers pass legislation financing federal agencies.

___

5:05 p.m.

President Donald Trump will sign an executive order Wednesday instructing the Interior Department to review national monument designations made over the past two decades, an action that could upend protections put in place in Utah and other states where officials have objected to federal safeguards.

The Antiquities Act of 1906 authorizes the president to declare federal lands of historic or scientific value to be "national monuments" and restrict how the lands can be used.

President Barack Obama infuriated Utah Republicans when he created the Bears Ears National Monument in December on more than 1 million acres of land that's sacred to Native Americans and home to tens of thousands of archaeological sites.

Republicans have asked Trump to reverse the designation, saying it will close the area to new energy development.

___

4:45 p.m.

President Donald Trump will sign an executive order Friday aimed at expanding offshore drilling.

The order will direct a review of the locations available for offshore oil and gas exploration. It will also order a review of certain regulations governing offshore operations.

That's according to a White House official who shared details on condition of anonymity despite the president's criticism of the use of unnamed sources.

The White House says past administrations have been overly restrictive of offshore drilling.

Opponents say the practice puts oceans and wildlife at risk.

__

3:30 p.m.

The entire U.S. Senate has been invited to the White House Wednesday for a briefing on the escalating situation with North Korea.

White House Press Secretary Sean Spicer says the briefing will be delivered by four top administration officials: Secretary of State Rex Tillerson, Defense Secretary Jim Mattis, Director of National Intelligence Dan Coats and the chairman of the Joint Chiefs of Staff, General Joseph Dunford.

The Trump administration has escalated its rhetoric against North Korea and has been pressuring China to lean on the country to cease its missile testing. Trump's U.N. ambassador Nikki Haley said Monday that the United States could strike North Korea if North Korea attacks a U.S. military base or tests an intercontinental ballistic missile.

Spicer said the White House was playing host but not organizing the briefing.

__

1:07 p.m.

There was a bit of awkwardness at President Donald Trump's lunch with U.N. diplomats when he made an undiplomatic comment about Nikki Haley, his ambassador to the U.N.

Trump was kicking off Monday's lunch with ambassadors of countries on the U.N. Security Council when he asked the room if they liked Haley, the U.S. ambassador to the U.N.

Trump said that if they didn't, "she could easily be replaced."

The comment sparked some awkwardness, but seemed to be taken in jest. Haley and others gathered around the lengthy table laughed.

Trump quickly assured Haley her job was safe. "I promise, we don't do that," Trump said, and praised Haley for doing a "fantastic job."

Haley has been one of the Trump administration's most vocal members, taking a tough line on Russia and Syria and telling North Korea not to give the U.S. "a reason" to fight.

__

12:40 p.m.

President Donald Trump is calling for "big reforms" to the United Nations and criticizing its handling of recent events in Syria and North Korea.

Trump is meeting with ambassadors of countries on the U.N. Security Council at the White House.

He says he's long considered the organization an "underperformer." But he says he also thinks it has "tremendous potential."

He says, "You just don't see the United Nations, like, solving conflicts. I think that's going to start happening now."

Trump is calling the organization's response to the chemical weapons attack in Syria a "great disappointment." And he says the council should be prepared to impose additional sanctions on North Korea.

He adds that the country is "a real threat to the world, whether we want to talk about it or not."

__

10:25 a.m.

Congress' two top Democrats say negotiators could finish a budget bill by Friday averting a government shutdown if President Donald Trump stepped back from his demands for money to build a border wall with Mexico.

Senate Minority Leader Chuck Schumer said in a Monday conference call with reporters that Trump is risking a federal shutdown "by shoving this wall down Congress' and the American people's throats."

House Minority Leader Nancy Pelosi said Trump's campaign promise to build the wall didn't include paying for it by taking "food out of the mouths of babies" and cutting other programs.

The two leaders' call came during the week leading up to next weekend's 100th day of Trump's presidency. They say the period has been marked by Trump's broken promises to help working-class Americans.

__

9 a.m.

President Donald Trump says that a border wall with Mexico would be an "important tool" for stopping the flow of drugs into the United States.

Trump tweeted Monday that, "the Wall is a very important tool in stopping drugs from pouring into our country and poisoning our youth (and many others)!"

Trump approaches the symbolic 100-day mark for his administration this week, renewing his demands that a must-pass government funding bill should include money for the wall.

In a tweet Sunday, Trump jabbed at Democrats, who vigorously oppose wall funding.

He said, "the Democrats don't want money from budget going to border wall despite the fact that it will stop drugs and very bad MS 13 gang members."

___

7:45 a.m.

Senate Minority Leader Chuck Schumer says President Donald Trump has thrown "a monkey wrench" into congressional talks on a catch-all spending bill with his insistence that the measure includes startup money for a wall along the U.S. border with Mexico.

Schumer tells MSNBC "this wall is un-thought-out and doesn't work." He says Trump's attitude toward bargaining over a short-term funding bill to avert a government shutdown later this week "can't be my way or the highway."

The New York Democrat says he speaks with Trump occasionally and said that "my advice to the president is to start keeping some of your promises."

Schumer asserted that Trump "seems to be in a little bubble with some very, very rich people."

Speaking of the president's promise of a major tax overhaul effort, Schumer says, "If the vast majority of his tax cuts are going to go to the wealthy, he won't be able to work with us."

___

3:15 a.m.

With a budget deadline looming, President Donald Trump plans a whirlwind of activities seeking to highlight accomplishments while putting fresh pressure on congressional Democrats to pay for a wall on the U.S.-Mexico border, even if that pressure risks a possible government shutdown.

Trump approaches the symbolic 100-day mark for his administration this coming week juggling a renewed health care push and his demands that a must-pass government funding bill should include money for the wall.

In a tweet Sunday, Trump jabbed at Democrats, who vigorously oppose wall funding. "The Democrats don't want money from budget going to border wall despite the fact that it will stop drugs and very bad MS 13 gang members."

He added: "Eventually, but at a later date so we can get started early, Mexico will be paying, in some form, for the badly needed border wall."

The 100-day mark falls on Saturday, the same day government could shut down without a budget deal. Trump has announced a rally in Pennsylvania that day.

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The Latest: Trump looks to expand offshore drilling - The Daily Progress

ICIS

Falling offshore wind costs may lead to increased capacity targets for North Sea countries ICIS The success of the recent German offshore wind tender, in which three sites totalling 1.38GW of new capacity were awarded contracts by bidding in at zero, could encourage countries to re-evaluate their offshore wind capacity goals, industry experts ...

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Falling offshore wind costs may lead to increased capacity targets for North Sea countries - ICIS

RTO Insider

Denmark To Build Offshore Wind Turbine Higher Than Eiffel Tower ... GCaptain by Jess Shankleman (Bloomberg) Offshore wind turbines are about to become higher than the Eiffel Tower, allowing the industry to supply subsidy-free clean ... Offshore Wind Industry Looks for Next Gust of Support - RTO InsiderRTO Insider all 29 news articles »

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Denmark To Build Offshore Wind Turbine Higher Than Eiffel Tower ... - GCaptain

Noble Corp. (NYSE:NE) has just filed an 8-K, where it shared important news on the ongoing reorganization of Paragon Offshore (OTCPK:PGNPQ) and its potential impact on the company. As a reminder, Noble Corp. span off Paragon Offshore back in 2014. Paragon Offshore started with a fleet of mostly older jack-ups, whose contracts ended in 2014 - 2016. Oil collapse followed, and Paragon Offshore was not able to recontract its rigs. As a result, Paragon Offshore had to enter restructuring negotiations with its creditors.

As a part of the previous reorganization plan of Paragon Offshore, Noble Corp. entered into a settlement agreement with Paragon, which released Noble Corp. of any claims in connection with the spin-off in exchange of providing certain bonding required in connection with Paragon's Mexican tax obligations. Under the new reorganization plan, Paragon does not need Mexican tax bonding. Therefore, the previous settlement agreement was terminated on April 21.

This is what Noble Corp. had to say about the situation:

Noble continues to discuss its continuing relationship with Paragon, including the possibility of entering into a new settlement agreement. There can be no assurance that the Company will reach any settlement agreement with Paragon. If we do not enter into a settlement agreement with Paragon, we expect Paragon or its creditors would pursue claims against Noble in litigation relating to the spin-off, including any alleged fraudulent conveyance claims.

The Company continues to believe that Paragon, at the time of the spin-off, was properly funded, solvent, and with appropriate liquidity and that any fraudulent conveyance claim or other claim related to the spin-off that may be brought by Paragon or its creditors would be without merit and would be contested vigorously by the Company.

Put simply, Noble Corp. tells investors that Paragon or its creditors may try to prove in court that Paragon was underfunded at the time of the spin-off. In case creditors or Paragon are able to prove this claim, Noble will face significant obligations.

The timing of the spin-off was truly unfortunate. If we travel back in time and look at the 2014 annual report, we will see significant problems. At the end of December 2014, Paragon had $56 million in cash and was facing $272 million of maturities in 2015. The long-term debt stood at $1.9 billion. If we look at the fleet status report of January 2015, we will see a backlog cliff.

As we know now, Paragon Offshore had absolutely no chance to survive the downturn with the asset mix, the backlog and the debt that it had at that time. However, creditors will have to prove that Paragon Offshore was doomed right from the start.

I am not a lawyer and I cannot predict the outcome of such a lawsuit with any degree of certainty. However, I definitely expect that Paragon creditors will give it a try unless Noble is able to reach a new settlement agreement with Paragon.

Please note that Paragon spin-off happened in-sync with the beginning of the oil price slump, so creditors will have to prove that Paragon was not a viable enterprise at $100+ oil as nobody could foresee oil dropping below $50 so fast at that time. I would argue that Paragon was not tailored to any significant negative change in the offshore drilling market, but the lack of downside protection does not necessarily mean that Noble Corp. crossed the red line with the spin-off of Paragon Offshore.

One thing is certain: Noble Corp. shares will see more short-term pressure because of the news. While it is too early to say that Noble Corp. may incur any material damage as a result of the lawsuit that does not even exist at this time, any additional uncertainty is bad for its shares. The offshore drilling market does not get better, and oil prices are picking downside momentum once again. I continue to expect that a test of November 2016 lows may be on cards for Noble Corp. stock.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I may trade NE.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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Paragon Offshore Creditors May Pursue Claims Against Noble Corporation - Seeking Alpha