Noble (NBLWF) 6 Nov 242024 Q3 Earnings call transcript

Good morning and welcome to the Noble Corporation Third Quarter 2024 Earnings Conference Call. [Operator Instructions] I will now hand today's call over to Ian MacPherson.

Welcome everyone to Noble Corporation's third quarter 2024 earnings conference call.

You can find a copy of our earnings report along with the supporting statements and schedules on our website at noblecorp.com. This conference call will be accompanied by a slide presentation that you can also find located at the Investor Relations section of our website. Today's call will feature prepared remarks from our President and CEO, Robert Eifler, as well as our CFO, Richard Barker. call Contracts; Denton, Vice and Operations. the of Vice President on and Marketing Joey joining are Senior Blake President of Also Kawaja, Senior

the based and forward-looking are are differ statements, companies uncertainties. and make are not factors management, we cause various During and materially Such therefore Many related assume from to expectations that obligation the statements. Also this these statements financial Noble to and facts. update certain statements of are matters risks business on forward-looking current regarding any and may our to historical of course upon subject actual certain could call, today. not referencing does these results measures call to note non-GAAP we assumptions

the the supplemental measures, report in required GAAP measure issued these for the most with associated filed comparable SEC. find reconciliation our including and disclosure yesterday You in earnings directly can and

to CEO the and Robert Now, President call I'll over turn Eifler, Noble. of

you on discuss by results, highlights financial day and capital update of and results commercial followed everyone, the Offshore, Thanks with outlook activities, I'll program, guidance Richard market third Diamond color. return on provide some our joining operational brief today's for and of then Ian. a for begin recent call. acquisition Good thank will quarter us and our our fourth quarter.

for up Finally, and questions. floor closing I'll the with wrap open remarks,

industry, including together XX also This years adding billion highly just creating combined well September X, worked to largest generation this everyone deepwater great to in of XXX of we of leading $X to extend organizations of X know, in over Offshore closed combining you seventh both rigs, who fleet appreciation a most on the with backlog. acquisition across my drillships As want transaction of fleet dual-BOP X synergistic priced legacies, combination close incredibly while the experience, months. brings companies of I capabilities. and tirelessly rich the under Diamond

integration track rigs mark, realized to is visited our focused share XX-day commitment on Diamond everything early meaningful targets. the pass smoothly safe wins, achieve prioritizing legacy customers to we Tier has according excited proceeding to stated some we As us far, and synergies including our while business integration have are that through operations. very globe, efficient playbook. Thus to the and continuity well-practiced a around management

of Next, to Return I'd progress our Capital like with additional highlight program.

execution combined recently $XXX Return authorization. in $XXX of I'm of the our million original QX our dividend. share And third XXXX, $X.XX inclusive share. We million million in second quarter announced we differentiated our repurchases pleased have Board here million factor a of $XXX now buybacks while dividends approved repurchases critical Maersk we this combination And a the we since also dividend authorization, million of at of eclipsed and recognize quarter, per completed closed the $XXX for have the under to program has Directors is maintaining quarter's that that highlight our Following of Drilling fourth investors. Capital $XXX in in quarterly

On commercial quarter, for flow of results now our million cash our $XXX highlights. combined will compared significant combined start million. These a moment, basis, on and acquisition third that the with QX, say strong our to additional the in have strong great operational we and September. cash Moving immediate include continued flow to free This the suffice enhances results but free color the in In our to delivered further weeks cash and EBITDA million, Richard $XXX accretion. with quarter to profile approximately in from marks acquisition Diamond Diamond a for company. Shifting it a adjusted highlights. achieved and expansion. $XXX of financial flow contribution at was results, EBITDA we consolidated the X

validating third during the awarded extending ExxonMobil between backlog recently the commercial commercial additional Guyana, we rig agreement enabling and an country Ocean for working further operational drillships our XXXX First, successful for with were under days in of U.K. X.X for the working years the the X additional and quarter, Shell the visibility in August through booked North Endeavor, options. March XXX and XXXX. We've in also plus the Sea, July model,

our at currently today, stands of billion. As backlog total $X.X

a the fixtures, underway. BlackRhino to the contract in rig's a Energy the of addition In Beacon in Mexico these slightly most upgrade the $XXX,XXX. This with and MPD to Offshore commence program below SPS first X-month are of that is XXXX awarded at July, following was day Gulf rate in slated recent quarter

day Australia, Gulf club. And expected substantially has will the America, upgrade, on XXXX, that South contract high important to drilling and the continue essential successfully the in priced its repairs. with position MPD Petrobras, its for in Kozack Brazil, set GreatWhite commenced the successfully Mexico pre-salt Faye both the forward Faye with and the drilled in Petrobras to this well through dominant Ocean out following our the record enhancing for first well. Following with in off the to Hats July, contracts Discoverer the resumed firm's on to following with MPD, increasingly the new Deliverer its work BlackLion we of quarter. its we of technical Colombia, Kozack a development accomplishment the to finally, contract on to domain. In of crews equipped the the And gas this BlackRhino's gate. In in first equipment the higher rate BP U.K., XXXs look have continuing impressive moved rigs In April XX in contract mid this during is right the early and options region. now

demand this the The at seen sound. of separately a continues remains pre-tenders has awards. Against is industry years XX and ultra in historically activity and level advantaged fundamentals like the for the of deepwater Now, offshore QX, word XXX with the supply in last an slowdown the work, with a upstream a our increase remain public booked, in backdrop, a additional the improvement core security second brief track backlog the shown from rigs marking direct priority, demand rig an saw a of strategic to for represents and high open share tenders level XX% substantial After contracting 'XX. on market. global I'd stems contracted several in line in QX, deepwater energy quarter, and encouraging structurally recent increasing. for strong over to contracting uptick. priority Energy domain, in volume XXXX resource from excluding a demand this highly of business above and the over industry. Also, rig years quarters, floaters Global

We believe XXXX. fixtures majority XXXX late XXXX in that space the of are recent contract and the half dates many signs XXXX have do white leaving these of While the start of first uptick late of or unaddressed. first these supporting early later, a in the demand

on can backlog XXXX. slide X earnings we you our see the on fleet As presentation, committed XX% total have for Page currently of our marketed of

a the As Tier next X mix, marketed XX% further you XX% our slightly for contracted are floaters year XXXX. drillships above committed into drill little are and our

these we sixth we the the have Deliverer since active we conversations all time our I de would we with units Discoverer and higher at end Souza conversations availability that have Our are gen of and say have on today, fleet, than currently had units. In And Voyager, the these Gerry acquired leads more Venturer. any Valiant, and near-term units. behind active

utilization associated the timing contracting programs, similarly, EBITDA active with have a of indicated. The for outlook potentially we in previously these almost is exclusively have Meanwhile, intervention our there collectively rate level, second Globetrotters, half XXXX XXXX. a So, compared promising. to by current run the as number opportunities supports of and the ramp work, leads meaningful for

are active shape. and backlog to budget been to backlog. I nature work take constructive convert of negotiations plays would also currently these some over done the discussions with months customer we opportunities past as increasingly see still our obviously utilization envision, the should allocations firm we next the say be there's in next weeks a Although, several inflection few customers the out year. XXXX and to to that then as If beginning has

Given have to this active any at opportunities, stack elected we the time. abundance of not rigs

expected, as more one to However, then if we stack does will units dictates. or not materialize market as demand XG the move decisively

Richard North on to the that per characterized fiscal side, market ahead Noble's unsurprisingly of generally over of in jack-up least last difficult XX%. jack-up not we expect of market years and to week's the and cover continue contracted has early our to introduced upstream generally pass last currently backdrop. With to XX the recently reactions note at are thus has Sea U.K., the continuing past quite recent crosswinds, of to improved day against demand far, tentative Sea an the more incrementally utilization in headwinds, contextual stable XX market neutral, utilization expected visibility. But with financials. Amid negative. $XXX,XXX QX. news day. North marketed some sector. we the week's approximately relatively have the resilient, operators NOC XX% taken to average jack-up by have regulatory budget approach deployment have announcement significantly which now be that we budget indications more taxation capital rigs a rate the at that, global And to been higher at of couple these call U.K. market constrained and fleet remained than in that the XX% despite might eclipsing up demand I'll On from the XXX consistently rigs QX And

million, up was expenditures third EBITDA in highlight, free afternoon for the good million which and will third outlook transaction $XXX was adjusted by the $XXX Robert, third services was margin The and quarter Adjusted revenue briefly totaled the the flow cash remarks burdened $XXX quarter in flow for on morning from million operations drilling today, quarter capital and $XXX was quarter. review $XXX up Diamond remainder of million, good $XXX second and net related to all. QX. from million, you, for $XXX then million, was touch QX, the the or year, I transaction. EBITDA the were costs million in my XXXX. Contract the Thank XX%. Cash from In

aforementioned the X from of figures the September. contribution approximate weeks Diamond All in reflect

reference, $XXX had illustratively adjusted on in results from EBITDA been for would QX to September our X, have your quarter, to For just legacy the closing close if included Diamond million. been full as opposed the

slides, for year, backlog in our earnings conversion stands billion weeks X that includes X, that for the is As at of November total of Page of this scheduled presentation billion, final as approximately million XXXX. $X.X summarized X $XXX $X.X and which the revenue on scheduled is

include Diamond reminder, does integration or revenue is a from backlog well. not progressing revenue reimbursable this ancillary As services. The

that providing are million the midpoint to the capturing come fourth range of million, adjusted to note XX $XXX and beginning shipyard reduction when $XXX million program. I fourth QX and EBITDA, $XXX that, million in We Adjusted Voyager adjusting energy revenue is full of would X the and $XX EBITDA quarter XX% the slides, captured have when on based QX to that to way capital million guidance approximately guidance expect put Total we the year year as the would revenue. current of the XXXX million to Globetrotter in midpoint the announced drivers as project year a on to correspond between the their to for net expect the $XX to quarter full the biggest are the at up range EBITDA in XXXX follows: million $XXX million, well the revenue I of the this $XXX adjusted earnings of as closely very includes out for additions continue the we compared BlackRhinos, for Page right within for and closing. Referring acquisition. guidance reimbursable Diamond $XXX Diamond the of and of EBITDA to where we $XXX to is finishing which million. The includes the out between quarter of rigs

level a XXXX. in could As total Robert in of as inflection the our higher support which EBITDA constructive previously of and drive variety materially well few reasonably alluded are half second as a contracting backlog, the we next of increasingly months, to, potential an over about opportunities

come these opportunities fruition. to until However,

an I XXXX. to think represents that first the fleets, half reasonable the indication run combined where approximate it is and of EBITDA rate of business fourth is into infer the the quarter tracking of Noble Diamond

put to XXXX year results. year guidance, conjunction our end XXXX out will We with in look full

flow that Supporting step As cash has focused on up flow. in to Despite CapEx. we cash impacted free laser by moving capital represent to reduction XXXX outlook a step returns maximizing in an still the expected this XXXX remain negatively organization, vice, expect contracting free opportunities a near-term we is shareholders. nice been to up various an

for materially be and of peak As Legacy next Noble should previously X-year in the following trending Diamond cycle fleets the XXXX. lower SPS year, stated, CapEx both the

provide full approximately illustrative company's total basis to we next XX%, reference, to For XX-month $XXX expect XX% expected combined year, the which reduce looking on flow to free Robert. we by turn million. And will a call this back to is evidenced XXXX our tailwind. CapEx I'll ahead another cash as actions by cash to the be all approximately to over look returning And flow free forward of that, to our essentially shareholders. With to-date,

Thank Richard. you,

closing just Before turn remarks. I'd like few we to provide Q&A, to a

decisions and buy-in then industry, will over months, a First, positioned ourselves next cuts we with for commitment your contracting begin continued and HSE, our cyclical leg that that with developments than for we XXXX. variable have on you gone excellence, exacting time, employees first that fundamental integration, day slowdown the the next standards over much to and growth year constructive ambition. This companies focus a contracting and integrating across past just the come the day like to innovative And supporting the into service multi-year through up witnessed the conditions. same right differentiated also the the in choice hold expected industry throughout the Noble on leader. At the earnings velocity an journey X created to another outlook, in thank and of years, and I'd for and culture past to our Through have we created operational highly further posture, effort over have one cash has the out. reliability, remain we few drag to making build our near-term our in cycle shareholders optimistic flow deliver while have

average, thus for our will far, offshore that XXXX higher customers upstream planning next indication is closely. be on year. plans But spending watching We spending early are,

track deploy perspective, surplus For share towards from cash step-up Noble, of expect we to dividend $X in repurchases the progression, relatively above EBITDA annualized will flat quarters half second next the we going the expected to an an this few XXXX. Through look free current forward. before flow

wrap questions. the ready to for I'll operator. We're there, open call up So,

of Your Eddie Instructions] Barclays. [Operator question is first line with from Kim the

Just and wanted your space to start year, the of for first half of white with concerns. some outlook next the

some space industry. for just about half, across the the concern, guess Could first of half is to call Is of have your reasons I first the in FPSOs. upon X that linger one -- out 'XX. to were You into could well? And white space stock next white some headwinds of the guess seeing that reflected this as utilization into I customer prices over maybe X delayed you the peers what past seeing even is of the which year the these expand you're you're talked the capital discipline, months, second the and in

looks air pocket like So, demand after what talk next could year? rebounding demand in pretty level a of your 'XX you in confidence just rig about big

on the now. Sure. everybody's right And mind question course, of that's

say, in opposing now, right. little obviously Eddie, of would I year. think, white first next half There's you're forces bit the had of a right I space So, -- they

here to couple very set I capital a you see of urgency different the think to the other and of that certainly the those instances very drill explanations explanations large slightly. But reasons discipline that call the hand, orders, low to project say and is a of has I suggest would listed available breakeven I behind we commitment explains that get open scenes we month. of are all this I And it other tenders levels. the the do be prepared readily planned general a that pushed work by overall, tree that would number I are the the couple but indicators behind up why this of delay. There say is the data last conversation different, And for -- level significantly of FIDs, certainly now. driven last Subsea think, may But I very on think And are the multitude in mentioned. at individual forward that delay. of you think remarks, in FID-ed is wells that of reasons, months, drilled in right is, for there the them of of I picked that that mentioned of lack different that to other scenes, just are instances a all right shows there. Analysis

out -- this of prepared would bit suggest tendering. work seeing and the little course, a seeing the We're we're got things remarks we've on around mentioned conversations that then, that all is up, so, And we there pick and these there of coming. data,

So, positive and hopeful and the late 'XX 'XX around we remain improvement.

That's on your commentary hear. stacking My great around it. follow-up to Got potentially is rigs. just

to your commentary said in You one as stage demand your one peers? into units. you warm that saw stack could materialize rigs next XG stacking as well? or potentially more of rigs, on for just It from might year around next potentially one doesn't elect all of this XG maybe those one your sounded on are XG XG the point. having which or active plans materialize warm expect, wasn't you if that we your your potentially stack we your year X discussions stacking based of don't warm at like rigs But contracts, What at of if your conversations see this on thoughts

when make that support dramatic, I back right might now. other around we just stack. we certainly So this would take less seventh be business. sliding to rig. the one generation measures dramatic of minimize That's that around into against rigs would would we that marketable will define definitions rational were us anticipate working that of if And the not doesn't cost them. would we're I kind say scale outlook

the is Benchmark. of from Hallead Kurt line question next with Your

Thanks Always that for appreciate all that. color.

half start lot just so look XXXX constructive of right, of things timing the a next So, forth. and we kind curious, to contract into out more terms look into of back so and and on and year in

an back right, EBITDA indicated of year. in in inflection, the the You half

what as you to to curious giving of think kind might around Just specifics magnitude that without guidance. begin like look

Obviously, our flat, here about being a think We'll normally one the specific somewhat to haven't right, QX, for will quarter, talked the of is we with right? And that the we provided half as was Yes, do Diamond Obviously, million I as XXXX. you upside data combine it's first for Noble do guidance good to quarter, Kurt, year-end the for full if results. with EBITDA question. if look to to year you well. interesting where QX, obviously point so closer we that there's $XXX

So a now. it's we're kind of then to going be talking about on of of and work after subject we're year half but significant, that a from first could inflection right next obviously, winning there flat the the some

you're outcomes because And benefit do a of have what negotiation cost was obviously Yes. the it, and that tender on out Kurt, we guidance year to of out now. we is with love just but it given early work one individual putting -- just like an one next I'd tremendous of reasons our reasons normal add, us. to stick right talking kind considered elected are the that about. we cadence amount not worth putting to here, for binary These of the of on felt it we waiting of under

plays is think we any have before out kind on there. more we so than of this some right we out waiting and put color how of this here And call seeing

appreciate That's that. great, I

acquisition. on incremental you've allocation little balance authorization. terms flow million buybacks You the debt to capital of your have curious cash just here, in just now another back $XXX of cash you a maybe kind kind I'm prior process go share thought have you sheet on your right? will and So that indicated than had follow-up more bit that What's now of to structure? the

looking the we cash where plan happy as structure, there's as the with share we're today to we're mentioned. with to on continue, repurchases dividend, sit from flow. obviously, Yes, excess cap free And and there, then supplement we

line from is with question Lewis Your next BTIG. Greg of the

kind fine CJXXs, a And this in have I morning. with very the you rest around did I fleet. hope higher end kind the you're have a the of guys doing CJXXs. jack-up couple then have Clearly, the question you of scattered core of of position rigs North well the around a on Sea world.

in market, that more and companies quality jack-up seems opportunistically off hunker strategy premium of see hey, the to kind get international, good its jack-ups, could Sea -- forward? where about Is Middle it the of something the and tear buyers they're kind and we Noble be they're market non-core looking but some there maybe think we positions like East core continue kind North of As maybe down of to migrating to from abroad. going

reiterate I certainly inefficient. while think some we've the outside as jack-ups I seem scattered rigs They're say, of customer, globally more customers. you Sea. Look, do this Yes. not And they're been. good we're would where point, with of They're always great North good the that flow. great at crews and cash producing

urgency no But going rational that us we shown or decision history comes have something. of through motivation I business think we've to front in one make there. when so we're do to And

that, there. course, there's for And a that move strategic if then so shareholders, we, extent the of would is the consider our right to thing

rigs -- and X a just -- scale on quarters, of it's percentage stacking. then guess, maybe I -- obviously, savings to seventh opportunities for going if around X we the of a around don't cost Robert, it's number need shave -- don't days, And on get the kind half any to I questions that may there's, work cold terms I don't any can $XXX, don't i.e., of until following Okay. mentioned off a work stack much But of cost back you for And probably operating to estimates if the but handful, think how up X the the I see were those seventh on maybe gen that gen about maybe basis, I we think year. those of at XX is, not that, think number $XXX, if -- we're cost a rigs. guess rough rig that any we the but gen or for sliding seventh whatever you we those opportunities X not just not about as of

Yes.

Let do Greg. me this,

me helpful. might Let the scale be sliding on points couple give the of you a

you full mentioned to to around kind reduce would type and down of before need to scale cold preservation day OpEx, to a that working So I that into stack say $XX,XXX go a stack, per $XX,XXX slides you costs from there.

-- on And that kind region, the rig, on depending endpoints, can of But I stack helpful. lot so, along there's variables the a end if that depending there's of where you those the think would are where you probably that's different along that scale. determine

Instructions] Your from of is line next Clarksons with Stene [Operator the Securities. question Fredrik

and for are well, you detailed prepared thanks the Hope remarks.

of could particularly in share a particularly optimistic touched regions, terms Where I XXXX over it's that about, last regions only I get more that you're XXXX, it necessarily you to the had the also, in share but seeing to discussions utilization key also any understood, and that chunk able been some in on opportunities? Are Are upon color 'XX light you latter all. if some in geography? of help longevity up not you can more there you these part was -- month, and perspective the opportunities would slightly are of but market and that the you're additional the -- seeing already, that XXXX. good I from think end of and in work more of

answer flattish. the there's a whole are a the previously CARICOM smattering is where of lot given And Triangle. provide opportunities we've see of outside incremental America, has to more more other of honestly, in more opportunities interesting we Africa lot There's And Golden is not from particularly not then Triangle. Sure. whole changed There South West are globally. there. growth a the definitely Golden abundant that with then They in color color U.S. the and

are in same regions, I key as think well. the the honestly,

mean, question, and got online, 'XX in for coming -- you've got your to think, Suriname I earnest. You've I 'XX

You on kind called more have opportunities that change we've have whole a the coast, And African frame. and Mozambique lot down Namibia should the guess out I in of West, African a but up of coast forecasted. West time number of the what East kind not from and on specifically I seen of eventually

sure any time occur. So, line on make tracking more we're actually meaningful probably come in focused where these hoping that changes might than in things that the tracking we're they to through

currently No, helpful, that's floaters you're in Are Also, anything, lately you each confident about market you given Any provide basis are jack-ups, you since mixed about relative you on cetera? different you the than the floaters a nonetheless. thinking X your call against it, have and segments and player more rank with et a would can how outlook? changed jack-ups, around other? weigh how market

upside that continue as side the much but don't recently at has been matched negative in than news The on say that, floaters. I floaters, I we've has current here more seen know much, valuations. of on market recently. mean if there's certainly in cycle more to that particularly trading concern a I that jack-up probably around jack-ups Yes, been would market obviously. focused we've -- our lot more And growth has see

quoted. well look quite But is up if be due there. XX%, really at However, we you XX%, that in utilization held jack-up think have the larger numbers, may up to I still total numbers above space, a denominator

early looking North we're takes direction too tell have in -- the some indications, reactions the it's North but kind XXXX to a probably at Like And little what so, really it's said, I to Sea. we closely of early Sea.

watching And on floater have we we've, can that then very so color the market and the And where of we're closely. we're course, said all probably hopeful.

Yes.

quick final one. a Just super

a have with get a you'll remember than I budgeting? done within of you see, this target it $XXX at synergies Diamond, million actually you're out point, correctly, work if integration $XXX Do XX% the chances that On of you year. more the million,

$XXX Fredrik, obviously year the that million a to after good Yes, the it $XXX Maersk there's that's case. then that announced and million. chance increased we about a Obviously, in transaction,

opportunities definitely say is would the of increase and than million I here. synergies integration there's to achieve progressing more total So, that expected, -- $XXX to as

is David from question Pickering next Energy line Partners. with the of Smith Your

about I Discoverer the rig I last extended I'm operating idle was your to an for and look seventh period? idle the you about costs hear the though, curious could the that about drillship? glad which outlook be Developer gen than the conversations think I'm talk lower and for active Deliverer. during that what September this in like guessing 'XX. Could worked

Yes.

fill we've -- you So all in.

as rigs well there. We on And have that the all minimize costs into of D moved I the would same we say lump of outlook. to kind

so got a think leads. I number we've And of

and continue have there we will the then will from there, XXXX. will obviously seem of around we've But number additional in first probably quite also We and had space, -- opportunities 'XX. of 'XX be change starting late color later to a given around continue. And no that quite have -- in half we

$XXX,XXX Dave, cost right from from And of kind day a now, about think perspective OpEx the that a Yes. range in perspective. kind of an

cost is... Developer, I'm for sorry, that operating per day the

Yes. Yes. Correct. -- sorry. Well, yes

fully it, think to scale the about numbers. from operating close of down backed to it, kind more the call essentially $XXX,XXX So a washed

follow-up, Yes. if I may. And quick a

to well working demand stay about wanted comments would correctly. you I Just in potential conversations active rigs And seeing both the wanted those to Are intervention rigs understood Globetrotter to make I your keep gulf? expect for sure being back in you the 'XX? circle to the to in work.

Yes.

historically, that which even in there's I more has that Yes, conversations becomes rigs. about probably But more we'll than said, But not been quickly. tends both right the to to Gulf first U.S. take if are talking a globally. about the it active obvious the that, work 'XX. a prepared moving the drilling, talking X, X-rig market we a right that we to obviously to talking are about focus there's -- action P&A So propensity susceptible for than here said that we're Again, then shown recently. intervention higher appropriate remarks be and half would now. in in extent of we that's then say,

remarks. time, today's there further to back hand now for I no the this are At any call closing would presenters questions. over

to forward and us quarter. again speaking with Have a you Thanks, everyone, today, look good for day. will joining next we

you This joining. Thank concludes today's call. for

disconnect now lines. your may You