Noble Corp. Gears Up for 4Q Trial Against Marathon Oil Corp.

Noble Corporation, a Swiss-headquartered drilling contractor which recently announced it was contemplating a move to the UK, is preparing for a trial against Marathon Oil Corporation.

In its quarterly filing, delivered yesterday to the United States Securities and Exchange Commission, Noble said it expected the trial, in which Noble is seeking damages from Marathon for a cancelled $752 million drilling contract signed in 2007, to occur in the fourth quarter of 2013. The contract for the use of the Noble Jim Day semi-submersible rig was expected to start in 2010, but Marathon opted against it.

On January 1, 2011, Marathon provided notice that it was terminating the contract. According to the drilling contractor, Marathon’s stated reason for the termination was that the rig had not been accepted by Marathon by December 31, 2010. Marathon also maintained that a force majeure condition existed under the contract, referring to the BP oil spill which occurred in 2010 spurring the U.S. Government to impose a drilling moratorium on all offshore drilling operations at the time.

The contract contained a provision allowing Marathon to terminate if the rig had not commenced operations by December 31, 2010.

“We believe the rig was ready to commence operations and should have been accepted by Marathon. The contract term was for four years. No revenue has been recognized under this contract. We have contracted the rig for much of the original term with other customers. In March 2011, we filed suit in Texas State District Court against Marathon seeking damages for its actions. The suit is proceeding and we expect the trial to occur in the fourth quarter of 2013. We cannot predict the outcome of this lawsuit,” said Noble Corporation in a statement.

Back in 2011, Marathon said that the lawsuit was without merit and that it would vigorously defend the litigation, adding that Noble had failed to fulfil its contractual obligations.