Overview of Noble’s Financial Performance

Revenue and Profit Trends

In the first quarter of 2024, Noble reported:

• Total operating revenue of $637.1 million, up 4% from $610.1 million in the first quarter of 2023
• Net income of $95.5 million or $0.66 per diluted share, down from $108.1 million or $0.74 per diluted share in the first quarter of 2023

The increase in revenue was primarily driven by higher average dayrates for both the floater and jackup rig fleets. This was partially offset by fewer operating days for some rigs compared to the first quarter of 2023.

Floaters

• Floater utilization averaged 64% compared to 77% last year
• Floater operating days were 1,101 compared to 1,314 last year
• Average floater dayrates were $433,608 compared to $331,705 last year

Jackups

• Jackup utilization averaged 67% compared to 70% last year
• Jackup operating days were 794 compared to 877 last year
• Average jackup dayrates were $144,187 compared to $97,940 last year

Expenses

• Contract drilling services costs increased due to higher labor, transportation, fuel, insurance, repairs and maintenance
• Depreciation increased by $16.8 million due to new assets placed in service
• General and administrative expenses decreased by $4.1 million due to lower integration costs

Liquidity and Capital Resources

• Cash provided by operating activities was $128.7 million compared to cash used of $63.1 million last year
• Working capital was $367.7 million at March 31, 2024
• Capital expenditures were $114.9 million, focused on rig sustaining costs and major upgrade projects
• Paid quarterly dividend of $0.40 per share, totaling $59.4 million

Backlog

At March 31, 2024, the contract backlog was $4.5 billion, including:

Strengths

High-specification drilling fleet

• One of the youngest and highest specification fleets in the industry
• Strong presence in ultra-deepwater and harsh environment jackup markets

High customer and geographic diversification

• Largest customers are ExxonMobil, Aker BP, and Petrobras
• Operations span multiple regions worldwide

Solid backlog provides revenue visibility

• $4.5 billion backlog as of March 31, 2024
• 60% of available days contracted for remainder of 2024

Weaknesses and Challenges

Lower specification assets face competitive pressure

• Customer focus on highest specification floaters resulting in lower utilization of other assets

Shorter-term contracts and idle periods

• Leads to lower utilization and more frequent start-ups
• Can result in higher costs and delivery delays

Inflationary pressures and supply chain issues

• Persistent inflation and disruptions are increasing costs
• Geopolitical issues pose challenges to operations

Energy transition and capital allocation changes

• Customers shifting investments towards renewable energy
• Could reduce offshore drilling demand long-term

Outlook

Noble expects improving offshore drilling demand overall, led by growing confidence in commodity prices and need for energy security. However, the company faces near-term headwinds from inflation, supply chain instability, and the energy transition.

Noble remains focused on providing efficient and reliable operations for customers. The company believes its high-specification fleet concentrated in deepwater and harsh environment jackups is well-positioned competitively. However, Noble’s financial results may continue to fluctuate with changes in broader market dynamics.

Maintaining a strong balance sheet and liquidity position remains a priority. Noble has taken actions to enhance financial flexibility, including a new revolving credit facility and debt refinancing. The company expects to fund its capital expenditures through operating cash flows.