Moody's sees default event for Noble Group

The board of directors at Noble Group released a proposed restructuring plan Monday that would cut its debt in half.

"This creates a sustainable capital structure for the core business, the group and all its stakeholders," the company stated.

Noble has been on a divestment streak since at least 2016 when it sold off more than 33,000 undeveloped acres in the Denver-Julesburg shale basin in Colorado to Synergy Resources for $505 million.

Early in 2016, when the price for crude oil hovered around $30 per barrel, the company set a spending target of about $1.5 billion, which was 50 percent lower than outlined for 2015. In October of that year, even as markets improved, it sold its oil trading business focused on the Americas to its counterpart, Vitol, for $576 million.

In November, it agreed to a deeper sale of its Noble Petro Inc. to Vitol for another $217 million. That announcement came one day after Noble Group Executive Director Jeffrey Frase resigned "to pursue other opportunities."

In its restructuring proposal, Noble said it generated nearly a half billion dollars from selling off its oil and gas interests in North America. By cutting away debt, it said it could now deliver long-term value by focusing on growing industries like liquefied natural gas, an important source of energy for the emerging island economies in the Asia-Pacific.

"The group believes this financial restructuring also sets a firm foundation in creating options for future strategic alliances and additional business opportunities," it said

Moody's Investors Service, which said in November the company would be broke in a year, said the restructuring does cut into Noble's debt load and improves liquidity. In its view, however, it's no sure way for Noble to return to profitability.

"If successful, the transaction will constitute a distressed debt exchange, which is a default event under Moody's definition," Gloria Tsuen, a Moody's vice president and senior analyst, said in a statement.