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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________________________________________
FORM 10-Q
_____________________________________________________________________________________________________
| | | | | |
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended: September 30, 2024
OR
| | | | | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
_____________________________________________________________________________________________________
Commission file number: 001-41520
Noble Corporation plc
(Exact name of registrant as specified in its charter)
_____________________________________________________________________________________________________
| | | | | | | | |
England and Wales | | 98-1644664 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. employer identification number) |
13135 Dairy Ashford, Suite 800, Sugar Land, Texas, 77478
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (281) 276-6100
_____________________________________________________________________________________________________
_______________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
A Ordinary Shares, par value $0.00001 per share | NE | New York Stock Exchange |
Tranche 1 Warrants of Noble Corporation plc | NE WS | New York Stock Exchange |
Tranche 2 Warrants of Noble Corporation plc | NE WSA | New York Stock Exchange |
_____________________________________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
Large accelerated filer | ☑ | | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |
| | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☑ No ☐
Number of shares outstanding at November 1, 2024: Noble Corporation plc - 160,370,364
TABLE OF CONTENTS | | | | | | | | | | | | | | |
| | | | Page |
PART I | | | | |
Item 1 | | | | |
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Item 2 | | | | |
Item 3 | | | | |
Item 4 | | | | |
PART II | | | | |
Item 1 | | | | |
Item 1A | | | | |
Item 2 | | | | |
Item 5 | | | | |
Item 6 | | | | |
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
ASSETS | | | | |
Current assets | | | | |
Cash and cash equivalents | | $ | 391,858 | | | $ | 360,794 | |
Accounts receivable, net | | 752,270 | | | 548,844 | |
Taxes receivable | | 81,803 | | | 39,845 | |
Prepaid expenses and other current assets | | 184,760 | | | 112,265 | |
Total current assets | | 1,410,691 | | | 1,061,748 | |
Intangible assets | | 1,580 | | | 10,128 | |
Property and equipment, at cost | | 6,795,699 | | | 4,591,936 | |
Accumulated depreciation | | (746,262) | | | (467,600) | |
Property and equipment, net | | 6,049,437 | | | 4,124,336 | |
| | | | |
Other assets | | 573,436 | | | 311,225 | |
Total assets | | $ | 8,035,144 | | | $ | 5,507,437 | |
LIABILITIES AND EQUITY | | | | |
Current liabilities | | | | |
| | | | |
Accounts payable | | $ | 405,907 | | | $ | 395,165 | |
Accrued payroll and related costs | | 119,665 | | | 97,313 | |
Taxes payable | | 109,018 | | | 56,420 | |
Interest payable | | 75,715 | | | 10,707 | |
| | | | |
Other current liabilities | | 190,160 | | | 82,075 | |
Total current liabilities | | 900,465 | | | 641,680 | |
Long-term debt | | 1,981,237 | | | 586,203 | |
Deferred income taxes | | 8,912 | | | 11,416 | |
Noncurrent contract liabilities | | 23,397 | | | 50,863 | |
Other liabilities | | 436,184 | | | 296,035 | |
Total liabilities | | 3,350,195 | | | 1,586,197 | |
Commitments and contingencies (Note 10) | | | | |
Shareholders’ equity | | | | |
Common stock, $0.00001 par value; 160,341,619 and 140,773,750 ordinary shares outstanding as of September 30, 2024, and December 31, 2023, respectively | | 1 | | | 1 | |
Additional paid-in capital | | 4,236,409 | | | 3,377,048 | |
Retained earnings | | 445,054 | | | 541,159 | |
Accumulated other comprehensive income (loss) | | 3,485 | | | 3,032 | |
Total shareholders’ equity | | 4,684,949 | | | 3,921,240 | |
Total liabilities and equity | | $ | 8,035,144 | | | $ | 5,507,437 | |
See accompanying notes to the unaudited condensed consolidated financial statements.
NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
Operating revenues | | | | | | | | |
Contract drilling services | | $ | 763,543 | | | $ | 671,004 | | | $ | 2,036,678 | | | $ | 1,852,474 | |
Reimbursables and other | | 37,006 | | | 26,446 | | | 93,799 | | | 93,565 | |
| | 800,549 | | | 697,450 | | | 2,130,477 | | | 1,946,039 | |
Operating costs and expenses | | | | | | | | |
Contract drilling services | | 434,192 | | | 354,199 | | | 1,159,913 | | | 1,078,521 | |
Reimbursables | | 28,185 | | | 16,682 | | | 69,196 | | | 67,484 | |
Depreciation and amortization | | 109,879 | | | 77,146 | | | 287,347 | | | 218,412 | |
General and administrative | | 43,596 | | | 33,039 | | | 109,226 | | | 95,428 | |
Merger and integration costs | | 69,214 | | | 12,966 | | | 89,163 | | | 47,049 | |
(Gain) loss on sale of operating assets, net | | — | | | — | | | (17,357) | | | — | |
Hurricane losses and (recoveries), net | | — | | | 2,642 | | | — | | | 22,120 | |
| | 685,066 | | | 496,674 | | | 1,697,488 | | | 1,529,014 | |
Operating income (loss) | | 115,483 | | | 200,776 | | | 432,989 | | | 417,025 | |
Other income (expense) | | | | | | | | |
Interest expense, net of amounts capitalized | | (24,951) | | | (13,005) | | | (54,491) | | | (44,539) | |
Gain on bargain purchase | | — | | | 5,005 | | | — | | | 5,005 | |
Gain (loss) on extinguishment of debt, net | | — | | | — | | | — | | | (26,397) | |
Interest income and other, net | | 2,292 | | | 17,206 | | | (10,626) | | | 16,292 | |
Income (loss) before income taxes | | 92,824 | | | 209,982 | | | 367,872 | | | 367,386 | |
Income tax benefit (provision) | | (31,608) | | | (51,659) | | | (16,167) | | | (35,184) | |
Net income (loss) | | $ | 61,216 | | | $ | 158,323 | | | $ | 351,705 | | | $ | 332,202 | |
| | | | | | | | |
Per share data | | | | | | | | |
Basic: | | | | | | | | |
Net income (loss) | | $ | 0.41 | | | $ | 1.14 | | | $ | 2.43 | | | $ | 2.42 | |
Diluted: | | | | | | | | |
Net income (loss) | | $ | 0.40 | | | $ | 1.09 | | | $ | 2.37 | | | $ | 2.29 | |
See accompanying notes to the unaudited condensed consolidated financial statements.
NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
Net income (loss) | | $ | 61,216 | | | $ | 158,323 | | | $ | 351,705 | | | $ | 332,202 | |
Other comprehensive income (loss) | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Net changes in pension and other postretirement plan assets and benefit obligations recognized in other comprehensive income (loss), net of tax provision (benefit) of $6 and zero for the three months ended September 30, 2024 and 2023, respectively, and $16 and $2,436 for the nine months ended September 30, 2024 and 2023, respectively. | | 432 | | | (65) | | | 453 | | | (2,210) | |
| | | | | | | | |
Other comprehensive income (loss), net | | 432 | | | (65) | | | 453 | | | (2,210) | |
Comprehensive income (loss) | | $ | 61,648 | | | $ | 158,258 | | | $ | 352,158 | | | $ | 329,992 | |
See accompanying notes to the unaudited condensed consolidated financial statements.
NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
| | 2024 | | 2023 |
Cash flows from operating activities | | | | |
Net income (loss) | | $ | 351,705 | | | $ | 332,202 | |
Adjustments to reconcile net income (loss) to net cash flow from operating activities: | | | | |
Depreciation and amortization | | 287,347 | | | 218,412 | |
Amortization of intangible assets and contract liabilities, net | | (46,580) | | | (95,540) | |
Gain on bargain purchase | | — | | | (5,005) | |
(Gain) loss on extinguishment of debt, net | | — | | | 26,397 | |
(Gain) loss on sale of operating assets, net | | (17,357) | | | — | |
Deferred income taxes | | (60,151) | | | (42,445) | |
Amortization of share-based compensation | | 35,959 | | | 28,058 | |
Other costs, net | | (10,157) | | | 7,248 | |
Changes in components of working capital and other operating activities: | | | | |
Change in taxes receivable | | (34,987) | | | (17,927) | |
Net changes in other operating assets and liabilities | | 13,482 | | | (164,552) | |
Net cash provided by (used in) operating activities | | 519,261 | | | 286,848 | |
Cash flows from investing activities | | | | |
Capital expenditures | | (434,653) | | | (268,131) | |
Proceeds from insurance claims | | 16,426 | | | — | |
Cash paid in stock-based business combination, net | | (400,458) | | | — | |
Proceeds from disposal of assets, net | | 4,885 | | | — | |
Net cash provided by (used in) investing activities | | (813,800) | | | (268,131) | |
Cash flows from financing activities | | | | |
Issuance of debt | | 824,000 | | | 600,000 | |
Borrowings on credit facilities | | 35,000 | | | — | |
Repayments of credit facilities | | (35,000) | | | — | |
Repayments of debt | | — | | | (673,411) | |
Debt extinguishment costs | | — | | | (25,697) | |
Debt issuance costs | | (10,002) | | | (24,914) | |
Warrants exercised | | 628 | | | 156 | |
Share repurchases | | (250,000) | | | (80,000) | |
Dividend payments | | (198,150) | | | (42,369) | |
Taxes withheld on employee stock transactions | | (57,167) | | | (8,612) | |
Other | | 22,578 | | | — | |
Net cash provided by (used in) financing activities | | 331,887 | | | (254,847) | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | | 37,348 | | | (236,130) | |
Cash, cash equivalents, and restricted cash, beginning of period | | 367,745 | | | 485,707 | |
Cash, cash equivalents, and restricted cash, end of period | | $ | 405,093 | | | $ | 249,577 | |
See accompanying notes to the unaudited condensed consolidated financial statements.
NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Shares | | Additional Paid-in Capital | | Retained Earnings (Accumulated Deficit) | | Accumulated Other Comprehensive Income (Loss) | | Total Equity | | | | | | | | | | |
| | Balance | | Par Value | | | | | | | | | | | | | | |
Balance at June 30, 2024 | | 142,904 | | | $ | 1 | | | $ | 3,338,030 | | | $ | 643,918 | | | $ | 3,053 | | | $ | 3,985,002 | | | | | | | | | | | |
Employee related equity activity | | | | | | | | | | | | | | | | | | | | | | |
Amortization of share-based compensation | | — | | | — | | | 21,632 | | | — | | | — | | | 21,632 | | | | | | | | | | | |
Issuance of share-based compensation shares | | 10 | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | |
Shares withheld for taxes on equity transactions | | — | | | — | | | (3,540) | | | — | | | — | | | (3,540) | | | | | | | | | | | |
Warrants exercised | | 126 | | | — | | | 346 | | | — | | | — | | | 346 | | | | | | | | | | | |
Share repurchases | | (6,938) | | | — | | | — | | | (250,000) | | | — | | | (250,000) | | | | | | | | | | | |
Issuance of common stock for Diamond Offshore Drilling merger | | 24,240 | | | — | | | 879,941 | | | — | | | — | | | 879,941 | | | | | | | | | | | |
Dividends | | — | | | — | | | — | | | (10,080) | | | — | | | (10,080) | | | | | | | | | | | |
Net income (loss) | | — | | | — | | | — | | | 61,216 | | | — | | | 61,216 | | | | | | | | | | | |
Other comprehensive income (loss), net | | — | | | — | | | — | | | — | | | 432 | | | 432 | | | | | | | | | | | |
Balance at September 30, 2024 | | 160,342 | | | $ | 1 | | | $ | 4,236,409 | | | $ | 445,054 | | | $ | 3,485 | | | $ | 4,684,949 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Balance at December 31, 2023 | | 140,774 | | | $ | 1 | | | $ | 3,377,048 | | | $ | 541,159 | | | $ | 3,032 | | | $ | 3,921,240 | | | | | | | | | | | |
Employee related equity activity | | | | | | | | | | | | | | | | | | | | | | |
Amortization of share-based compensation | | — | | | — | | | 35,959 | | | — | | | — | | | 35,959 | | | | | | | | | | | |
Issuance of share-based compensation shares | | 2,058 | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | |
Shares withheld for taxes on equity transactions | | — | | | — | | | (57,167) | | | — | | | — | | | (57,167) | | | | | | | | | | | |
Warrants exercised | | 208 | | | — | | | 628 | | | — | | | — | | | 628 | | | | | | | | | | | |
Share repurchases | | (6,938) | | | — | | | — | | | (250,000) | | | — | | | (250,000) | | | | | | | | | | | |
Issuance of common stock for Diamond Offshore Drilling merger | | 24,240 | | | — | | | 879,941 | | | — | | | — | | | 879,941 | | | | | | | | | | | |
Dividends | | — | | | — | | | — | | | (197,810) | | | — | | | (197,810) | | | | | | | | | | | |
Net income (loss) | | — | | | — | | | — | | | 351,705 | | | — | | | 351,705 | | | | | | | | | | | |
Other comprehensive income (loss), net | | — | | | — | | | — | | | — | | | 453 | | | 453 | | | | | | | | | | | |
Balance at September 30, 2024 | | 160,342 | | | $ | 1 | | | $ | 4,236,409 | | | $ | 445,054 | | | $ | 3,485 | | | $ | 4,684,949 | | | | | | | | | | | |
See accompanying notes to the unaudited condensed consolidated financial statements.
NOBLE CORPORATION plc AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - CONTINUED
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Shares | | Additional Paid-in Capital | | Retained Earnings (Accumulated Deficit) | | Accumulated Other Comprehensive Income (Loss) | | Total Equity |
| | Balance | | Par Value | | | | |
Balance at June 30, 2023 | | 137,084 | | | $ | 1 | | | $ | 3,358,108 | | | $ | 359,809 | | | $ | 1,502 | | | $ | 3,719,420 | |
Employee related equity activity | | | | | | | | | | | | |
Amortization of share-based compensation | | — | | | — | | | 9,204 | | | — | | | — | | | 9,204 | |
Issuance of share-based compensation shares | | 15 | | | — | | | — | | | — | | | — | | | — | |
Shares withheld for taxes on equity transactions | | — | | | — | | | (257) | | | — | | | — | | | (257) | |
Warrants exercised | | 4,144 | | | — | | | 54 | | | — | | | — | | | 54 | |
Share repurchases | | (197) | | | — | | | — | | | (10,000) | | | — | | | (10,000) | |
Dividends | | — | | | — | | | — | | | (43,679) | | | — | | | (43,679) | |
Net income (loss) | | — | | | — | | | — | | | 158,323 | | | — | | | 158,323 | |
Other comprehensive income (loss), net | | — | | | — | | | — | | | — | | | (65) | | | (65) | |
Balance at September 30, 2023 | | 141,046 | | | $ | 1 | | | $ | 3,367,109 | | | $ | 464,453 | | | $ | 1,437 | | | $ | 3,833,000 | |
| | | | | | | | | | | | |
Balance at December 31, 2022 | | 134,681 | | | $ | 1 | | | $ | 3,347,507 | | | $ | 255,930 | | | $ | 3,647 | | | $ | 3,607,085 | |
Employee related equity activity | | | | | | | | | | | | |
Amortization of share-based compensation | | — | | | — | | | 28,058 | | | — | | | — | | | 28,058 | |
Issuance of share-based compensation shares | | 462 | | | — | | | — | | | — | | | — | | | — | |
Shares withheld for taxes on equity transactions | | — | | | — | | | (8,612) | | | — | | | — | | | (8,612) | |
Warrants exercised | | 7,920 | | | — | | | 156 | | | — | | | — | | | 156 | |
Share repurchases | | (2,017) | | | — | | | — | | | (80,000) | | | — | | | (80,000) | |
Dividends | | — | | | — | | | — | | | (43,679) | | | — | | | (43,679) | |
Net income (loss) | | — | | | — | | | — | | | 332,202 | | | — | | | 332,202 | |
Other comprehensive income (loss), net | | — | | | — | | | — | | | — | | | (2,210) | | | (2,210) | |
Balance at September 30, 2023 | | 141,046 | | | $ | 1 | | | $ | 3,367,109 | | | $ | 464,453 | | | $ | 1,437 | | | $ | 3,833,000 | |
See accompanying notes to the unaudited condensed consolidated financial statements.
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 1 — Organization and Basis of Presentation
Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”, the “Company”, or “we”), is a leading offshore drilling contractor for the oil and gas industry. We provide contract drilling services to the international oil and gas industry with our global fleet of mobile offshore drilling units. Noble and its predecessors have been engaged in the contract drilling of oil and gas wells since 1921. As of the filing date of this report, our fleet of 41 drilling rigs consisted of 28 floaters and 13 jackups.
We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist primarily of large, integrated, independent and government-owned or controlled oil and gas companies throughout the world.
The accompanying unaudited condensed consolidated financial statements of Noble have been prepared pursuant to the rules and regulations of the US Securities and Exchange Commission (“SEC”) as they pertain to Quarterly Reports on Form 10-Q. Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited financial statements are prepared on a going concern basis and reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the financial position and results of operations for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a recurring nature. The December 31, 2023, Condensed Consolidated Balance Sheet presented herein is derived from the December 31, 2023, audited consolidated financial statements. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed by Noble. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Note 2 — Acquisitions
Business Combination with Diamond Offshore Drilling
On June 9, 2024, Noble entered into an agreement and plan of merger (the “Diamond Merger Agreement”) with Diamond Offshore Drilling, Inc. (“Diamond”), Dolphin Merger Sub 1, Inc., and Dolphin Merger Sub 2, Inc., under which Noble would acquire Diamond in a stock plus cash transaction (the “Diamond Transaction”). On September 4, 2024 (“the Diamond Closing Date”), Noble completed its acquisition of Diamond. Pursuant to the terms and conditions set forth in the Diamond Merger Agreement, Diamond shareholders received 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond.
Purchase Price Allocation
The Diamond Transaction has been accounted for using the acquisition method of accounting under ASC Topic 805, Business Combinations, with Noble being treated as the accounting acquirer. Under the acquisition method of accounting, the assets acquired and liabilities assumed of Diamond and its subsidiaries were recorded at their respective fair values on the Diamond Closing Date. Total consideration for the acquisition was $1.5 billion, which included $610.3 million in cash paid and $879.9 million in non-cash consideration, primarily related to Noble shares issued to legacy Diamond shareholders and the replacement of legacy Diamond RSUs (as defined below).
Determining the fair values of the assets and liabilities of Diamond and the consideration paid required judgment and certain assumptions to be made. The most significant fair value estimates related to the valuation of Diamond’s mobile offshore drilling units and other related tangible assets, the fair value of drilling contracts, and debt.
Offshore drilling units. The valuation of Diamond’s mobile offshore drilling units was determined using the discounted cash flows expected to be generated from the drilling assets over their remaining useful lives. Assumptions used in our assessment included, but were not limited to, future marketability of each unit in light of the current market conditions and its current technical specifications, timing of future contract awards and expected operating dayrates, operating costs, rig utilization rates, tax rates, discount rate, capital expenditures, synergies, market values, estimated economic useful lives of
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
the rigs and, in certain cases, our belief that a drilling unit is no longer marketable and is unlikely to return to service in the near to medium term.
Diamond off-market contracts. The Company recorded, with the assistance of external valuation specialists, liabilities from drilling contracts that had unfavorable terms compared to the current market which were recorded on the Diamond Closing Date. The Company recognized the fair value adjustments as off-market contract liabilities recorded in “Noncurrent contract liabilities.”
Diamond debt. In connection with the Diamond Transaction, the Company assumed Diamond’s outstanding principal debt of $550 million and terminated Diamond’s $300 million senior secured revolving credit facility (the “Diamond RCF”), which was scheduled to mature in April 2026. The valuation of the Diamond Second Lien Notes (as defined herein) was based on relevant market data as of the Diamond Closing Date and the term of the notes. Considering that the interest rate and implied yield for the Diamond Second Lien Notes were within a range of comparable market yields (with considerations for term and seniority), a fair value adjustment was recorded relating to the notes. For additional information, see “Note 6 — Debt.”
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The following table represents the allocation of the total purchase price of Diamond to the identifiable assets acquired and the liabilities assumed based on the fair values as of the Diamond Closing Date. In connection with this acquisition, the Company incurred $69.4 million of acquisition related costs during the nine months ended September 30, 2024. The results of Diamond operations were included in the Company’s results of operations effective on the Diamond Closing Date. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the Diamond Closing Date. Any final adjustment to the valuation could change the fair values assigned to the assets and liabilities, resulting in a change to our consolidated financial statements. Such change could be material.
| | | | | | | | |
Purchase price consideration: | | |
Fair value of Noble shares transferred to legacy Diamond shareholders | | $ | 857,678 | |
Fair value of replacement Diamond RSU Awards attributable to the purchase price | | 22,263 | |
Cash paid to legacy Diamond shareholders | | 583,152 | |
Cash paid to terminate the Diamond RCF | | 308 | |
Cash paid to settle contingent success fees | | 17,316 | |
Cash paid for retention bonuses | | 4,422 | |
Cash paid for short-term incentive plans | | 5,086 | |
Total purchase price consideration | | $ | 1,490,225 | |
| | |
Assets acquired: | | |
Cash and cash equivalents | | $ | 209,826 | |
Accounts receivable, net | | 193,194 | |
Taxes receivable | | 6,971 | |
Prepaid expenses and other current assets | | 74,739 | |
Total current assets | | 484,730 | |
| | |
Property, plant, and equipment, net | | 1,834,890 | |
Assets held for sale (1) | | 5,300 | |
Other assets | | 172,936 | |
Total assets acquired | | 2,497,856 | |
Liabilities assumed: | | |
| | |
Accounts payable | | 82,805 | |
Accrued payroll and related costs | | 36,791 | |
Taxes payable | | 28,629 | |
Interest payable | | 19,750 | |
Other current liabilities | | 132,142 | |
Total current liabilities | | 300,117 | |
Long-term debt | | 580,250 | |
Deferred income taxes | | 184 | |
Noncurrent contract liabilities | | 27,663 | |
Other liabilities | | 99,417 | |
Total liabilities assumed | | 1,007,631 | |
Net assets acquired | | $ | 1,490,225 | |
(1)During the third quarter of 2024, we sold the Ocean Valiant for total proceeds of $5.6 million.
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Diamond Revenue and Net Income
The following table represents Diamond’s revenue and earnings included in Noble’s Condensed Consolidated Statements of Operations subsequent to the Diamond Closing Date of the Diamond Transaction.
| | | | | | | | |
| | Period from September 4, 2024 through September 30, 2024 |
Revenue | | $ | 94,380 | |
Net income (loss) | | $ | 2,690 | |
Pro Forma Financial Information
The following unaudited pro forma summary presents the results of operations as if the Diamond Transaction had occurred on January 1, 2023. The pro forma summary uses estimates and assumptions based on information available at the time. Management believes the estimates and assumptions to be reasonable; however, actual results may have differed significantly from this pro forma financial information. The pro forma information does not reflect any synergy savings that might have been achieved from combining the operations and is not intended to reflect the actual results that would have occurred had the companies actually been combined during the periods presented.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2024 | | Nine Months Ended September 30, 2024 | | Three Months Ended September 30, 2023 | | Nine Months Ended September 30, 2023 |
Revenue | | $ | 997,566 | | | $ | 2,854,991 | | | $ | 942,410 | | | $ | 2,704,609 | |
Net income (loss) | | $ | 81,406 | | | $ | 369,124 | | | $ | (28,061) | | | $ | 265,772 | |
Net income (loss) per share: | | | | | | | | |
Basic | | $ | 0.41 | | | $ | 1.92 | | | $ | (0.17) | | | $ | 1.65 | |
Diluted | | $ | 0.4 | | | $ | 1.86 | | | $ | (0.17) | | | $ | 1.55 | |
The pro forma results include, among others, (i) a reduction in Diamond’s historically reported depreciation expense related to adjustments of property and equipment values, (ii) adjustments to reflect certain acquisition related costs incurred directly in connection with the Diamond Transaction as if it had occurred on January 1, 2023, and (iii) net adjustments to increase contract drilling services revenue related to off-market customer contract liabilities recognized in connection with the Diamond Transaction on a pro forma basis.
Note 3 — Accounting Pronouncements
Accounting Standards Adopted
There have been no new accounting standards adopted during the current quarter.
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU No. 2024-03 ("ASU 2024-03"), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this Update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. An entity is not precluded from providing additional voluntary disclosures that may provide investors with additional decision-useful information. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company continues to assess the potential impact of this pronouncement.
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09 ("ASU 2023-09"), Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires, among other things, the following for public business entities: (i) enhanced disclosures of specific categories of reconciling items included in the rate reconciliation, as well as additional information for any of these items meeting certain qualitative and quantitative thresholds, (ii) disclosure of the nature, effect, and underlying causes of each individual reconciling item disclosed in the rate reconciliation and the judgment used in categorizing them if not otherwise evident, and (iii) enhanced disclosures for income taxes paid, which includes federal, state, and foreign taxes, as well as for individual jurisdictions over a certain quantitative threshold. The amendments in ASU 2023-09 eliminate the requirement to disclose the nature and estimate of the range of the reasonably possible change in unrecognized tax benefits for the 12 months after the balance
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
sheet date. The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024; early adoption is permitted. The Company continues to evaluate the potential impact of this pronouncement.
In November 2023, the FASB issued ASU No. 2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires, among other things, the following: (i) enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included in a segment's reported measure of profit or loss, (ii) disclosure of the amount and description of the composition of other segment items, as defined in ASU 2023-07, by reportable segment, and (iii) reporting the disclosures about each reportable segment's profit or loss and assets on an annual and interim basis. The provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024; early adoption is permitted. The Company continues to evaluate the potential impact of this pronouncement.
Note 4 — Income (Loss) Per Share
The following table presents the computation of basic and diluted income (loss) per share:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
Numerator: | | | | | | | | |
Basic | | | | | | | | |
Net income (loss) | | $ | 61,216 | | | $ | 158,323 | | | $ | 351,705 | | | $ | 332,202 | |
| | | | | | | | |
| | | | | | | | |
Denominator: | | | | | | | | |
Weighted average shares outstanding – basic | | 149,727 | | | 139,400 | | | 144,863 | | | 137,478 | |
Dilutive effect of share-based awards | | 1,877 | | | 3,204 | | | 1,877 | | | 3,204 | |
Dilutive effect of warrants | | 1,334 | | | 3,117 | | | 1,502 | | | 4,339 | |
Weighted average shares outstanding – diluted | | 152,938 | | | 145,721 | | | 148,242 | | | 145,021 | |
Per share data: | | | | | | | | |
Basic | | | | | | | | |
Net income (loss) | | $ | 0.41 | | | $ | 1.14 | | | $ | 2.43 | | | $ | 2.42 | |
Diluted | | | | | | | | |
Net income (loss) | | $ | 0.40 | | | $ | 1.09 | | | $ | 2.37 | | | $ | 2.29 | |
Only those items having a dilutive impact on our basic income (loss) per share are included in diluted income (loss) per share. The following table displays the share-based instruments that have been excluded from diluted income (loss) per share since the effect would have been anti-dilutive:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
| | | | | | | | |
Warrants (1) | | 10,242 | | | 2,774 | | | 10,242 | | | 2,774 | |
(1)Represents the total number of warrants outstanding which did not have a dilutive effect. In periods where the warrants are determined to be dilutive, the number of shares which will be included in the computation of diluted shares is determined using the Treasury Stock Method, adjusted for mandatory exercise provisions under the warrant agreements, if applicable.
Settlement of the Diamond Transaction
On September 4, 2024, Noble issued 24,239,941 class A ordinary shares of Noble to former shareholders of Diamond, in connection with the closing of the Diamond acquisition. Further, Noble assumed all outstanding and unexercised warrants of Diamond, which will be exercisable for 90 days from the effective time of the Diamond acquisition. Following such 90-day exercise period, the warrants assumed from Diamond will no longer be exercisable and will expire in accordance with their terms.
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Assumption of Diamond RSUs
On September 4, 2024, in connection with the closing of the acquisition of Diamond, each performance-vesting and time-vesting restricted stock unit covering shares of Diamond (together "Diamond RSUs") held by key employees were assumed by Noble and represented the right to receive shares in Noble. The Diamond RSUs were assumed by Noble on substantially the same terms and conditions (including vesting conditions) as applicable to the original Diamond RSUs prior to the closing of the acquisition.
Notwithstanding the foregoing, to the extent that a Diamond RSU vested as of the acquisition (including any awards that vested as a result of a termination of employment at or immediately after the acquisition), such awards were instead settled in cash or shares of Diamond, as applicable, immediately prior to the acquisition and any such shares of Diamond were treated the same as other Diamond shares.
Share Capital
As of September 30, 2024, Noble had approximately 160.3 million A ordinary shares, par value $0.00001 per share (“Ordinary Shares”) outstanding as compared to approximately 140.8 million Ordinary Shares outstanding at December 31, 2023. In addition, as of September 30, 2024, 0.9 million Tranche 1 Warrants, 1.0 million Tranche 2 Warrants, 2.8 million Tranche 3 Warrants, and 7.5 million Diamond Warrants (each as defined herein) were outstanding and exercisable. We also have 6.7 million Ordinary Shares authorized and reserved for issuance pursuant to equity awards under the Noble Corporation plc 2022 Long-Term Incentive Plan.
Our most recent quarterly dividend payment to shareholders, totaling approximately $81.6 million (or $0.50 per share), was declared on June 10, 2024, and paid on September 26, 2024, to shareholders of record at close of business on September 12, 2024.
The declaration and payment of dividends require authorization of the Board of Directors, provided that such dividends on issued share capital may be paid only out of the Company’s “distributable reserves” as determined by reference to relevant statutory accounts in accordance with English law. The Company is not permitted to pay dividends out of share capital, which includes share premiums. The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, the availability of sufficient distributable reserves, contractual and indenture restrictions, and other factors deemed relevant by the Board of Directors.
Share Repurchases
Under law, the Company is only permitted to purchase its own Ordinary Shares by way of an “off-market purchase” pursuant to a contract approved by shareholders. Such purchases may be paid for only out of Noble’s “distributable reserves” as determined by reference to relevant statutory accounts in accordance with law. As of the date of this report, we have shareholder authority to repurchase up to 15% per annum of the issued share capital of the Company as of the beginning of each fiscal year for a five-year period (subject to an overall aggregate maximum of 20,601,161 Ordinary Shares). During the three and nine months ended September 30, 2024, we repurchased 6.9 million of our Ordinary Shares. During the three and nine months ended September 30, 2023, we repurchased 0.2 million and 2.0 million of our Ordinary Shares, respectively. All repurchased shares were subsequently cancelled.
Warrants
The tranche 1 warrants (the “Tranche 1 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $19.27 per warrant, the tranche 2 warrants (the “Tranche 2 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $23.13 per warrant, and the tranche 3 warrants (the “Tranche 3 Warrants”) are exercisable for one Ordinary Share per warrant at an exercise price of $124.40 per warrant. Warrants originally issued by Diamond Offshore Drilling, Inc. (the “Diamond Warrants”) are exercisable through December 3, 2024, for $5.65 in cash and 0.2316 Ordinary Shares at an exercise price of $29.22 per Diamond Warrant.
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 5 — Property and Equipment
Property and equipment, at cost, for Noble consisted of the following:
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
Drilling equipment and facilities | | $ | 6,567,828 | | | $ | 4,338,229 | |
Construction in progress | | 170,696 | | | 210,759 | |
Other | | 57,175 | | | 42,948 | |
Property and equipment, at cost | | $ | 6,795,699 | | | $ | 4,591,936 | |
Capital additions, including capitalized interest, during the three months ended September 30, 2024 and 2023, totaled $107.7 million and $88.6 million, respectively, and during the nine months ended September 30, 2024 and 2023, totaled $374.3 million and $259.4 million, respectively.
During the second quarter of 2024, we sold the Noble Explorer for total proceeds of $25.0 million, $21.5 million of which was received in the fourth quarter of 2023, resulting in a pre-tax gain of $17.4 million.
Note 6 — Debt
Amended and Restated Senior Secured Revolving Credit Agreement
In April 2023, Noble entered into the Amended and Restated Senior Secured Revolving Credit Agreement, dated April 18, 2023, and as amended on June 24, 2024 (the “2023 Revolving Credit Agreement”), by and among Noble Finance II LLC (“Noble Finance II”), Noble International Finance Company, and Noble Drilling A/S, as borrowers, the lenders and issuing banks party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, and security trustee (the 2023 Revolving Credit Agreement and the facility thereunder, the “2023 Revolving Credit Facility”). The 2023 Revolving Credit Facility provides for commitments of $550.0 million with maturity in 2028. The guarantors (the “Guarantors”) under the 2023 Revolving Credit Facility are the same subsidiaries of Noble Finance II that are or will be guarantors of the 2030 Notes (as defined below). As of September 30, 2024, we had no borrowings outstanding and $24.0 million of letters of credit issued under the 2023 Revolving Credit Agreement.
8.000% Senior Notes due 2030
In April 2023, Noble Finance II, a wholly owned subsidiary of Noble, issued the $600.0 million in aggregate principal amount of its 8.000% Senior Notes due 2030. In August 2024, Noble Finance II issued an additional $800.0 million in aggregate principal amount of its 8.000% Senior Notes due 2030 at a premium of 103% bringing the total outstanding principal amount to $1.4 billion (collectively, the “2030 Notes”). The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023, among Noble Finance II, certain subsidiaries of Noble Finance II (the Guarantors), and U.S. Bank Trust Company, National Association, as trustee.
The 2030 Notes are unconditionally guaranteed on a senior unsecured basis by the Guarantors and will be unconditionally guaranteed on the same basis by certain of Noble Finance II’s future subsidiaries that guarantee certain indebtedness of Noble Finance II and the Guarantors, including the 2023 Revolving Credit Facility.
The 2030 Notes will mature on April 15, 2030, and interest on the 2030 Notes is payable semi-annually in arrears on each April 15 and October 15, commencing October 15, 2023, to holders of record on the April 1 and October 1 immediately preceding the related interest payment date, at a rate of 8.000% per annum.
Diamond Second Lien Notes due 2030
On September 21, 2023, Diamond Foreign Asset Company and Diamond Finance, LLC (collectively referred to as the “Issuers”) issued $550.0 million aggregate principal amount of 8.500% Senior Secured Second Lien Notes due October 2030 (or the “Diamond Second Lien Notes”) with interest payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2024. The Diamond Second Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by Noble Offshore Drilling, Inc. (or “NODI”, formerly Diamond Offshore Drilling, Inc.) and each of its existing restricted subsidiaries (other than the Issuers) and by certain of NODI’s future restricted subsidiaries (other than the Issuers).
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The Diamond Second Lien Notes obligate NODI and its specified subsidiaries to comply with an indenture dated as of September 21, 2023, (or the Indenture) entered into by the Issuers, NODI, and certain of its subsidiaries named therein and HSBC Bank USA, National Association. The Indenture contains covenants that, among other things, restrict NODI’s ability and the ability of certain of its subsidiaries to: (i) incur additional debt and issue certain preferred stock; (ii) incur or create liens; (iii) make certain dividends, distributions, investments, and other restricted payments; (iv) sell or otherwise dispose of certain assets; (v) engage in certain transactions with affiliates; and (vi) merge, consolidate, amalgamate, or sell, transfer, lease, or otherwise dispose of all or substantially all of NODI’s assets. These covenants are subject to important exceptions and qualifications.
Noble Second Lien Notes
On February 5, 2021, pursuant to the Backstop Commitment Agreement, dated October 12, 2020, among the Debtors and the backstop parties thereto, Noble Cayman and Noble Finance Company consummated the Rights Offering of the Noble Second Lien Notes and associated Noble Cayman Shares at an aggregate subscription price of $200.0 million.
On April 18, 2023, we redeemed the remaining balance of approximately $173.7 million aggregate principal amount of outstanding Noble Second Lien Notes using a portion of the proceeds from the offering of the 2030 Notes, and recognized a loss of approximately $25.7 million.
DNB Credit Facility and New DNB Credit Facility
On October 3, 2022 (the “Closing Date”), the merger, pursuant to a Business Combination Agreement, dated November 10, 2021, as amended (the “Business Combination”) by and among Noble, the Drilling Company of 1972 A/S, a Danish public limited liability company (“Maersk Drilling”) and the other parties thereto, became effective and Noble guaranteed the Term and Revolving Facilities Agreement dated December 6, 2018, by and among Maersk Drilling, the rig owners and material intragroup charterers party thereto and DNB Bank ASA as agent (as amended from time to time, the “DNB Credit Facility”) and on December 22, 2022, it was terminated and replaced with the New DNB Credit Facility. On April 18, 2023, we repaid the $347.5 million of outstanding borrowings under the New DNB Credit Facility using a portion of the proceeds from the offering of the 2030 Notes, and recognized a loss of approximately $0.7 million.
DSF Credit Facility
The Company guaranteed the DSF Credit Facility in connection with the Business Combination, and it was repaid in full on February 23, 2023, using cash on hand.
Diamond Credit Facility
On September 4, 2024, in connection with the closing of the Diamond Transaction, Noble terminated Diamond’s $300 million senior secured revolving credit facility, which was scheduled to mature on April 22, 2026. At the time of the merger and termination, Diamond had no outstanding borrowings under the facility.
Fair Value of Debt
Fair value represents the amount at which an instrument could be exchanged in a current transaction between willing parties. The estimated fair value of our debt instruments was based on the quoted market prices for similar issues or on the current rates offered to us for debt of similar remaining maturities (Level 2 measurement). The fair values of each of the Revolving Credit Facility, the New DNB Credit Facility and the DSF Credit Facility approximates its respective carrying amount as its interest rate is variable and reflective of market rates.
The following table presents the carrying value, net of unamortized debt issuance costs and discounts or premiums, and the estimated fair value of our total debt, not including the effect of unamortized debt issuance costs, respectively:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
| | Carrying Value | | Estimated Fair Value | | Carrying Value | | Estimated Fair Value |
Senior secured notes | | | | | | | | |
8.000% Senior Notes due April 2030 | | $ | 1,401,271 | | | $ | 1,445,416 | | | $ | 586,203 | | | $ | 626,472 | |
8.500% Senior Secured Second Lien Notes due October 2030 | | 579,966 | | | 574,838 | | | — | | | — | |
| | | | | | | | |
| | | | | | | | |
Total debt | | 1,981,237 | | | 2,020,254 | | | 586,203 | | | 626,472 | |
Less: Current maturities of long-term debt | | — | | | — | | | — | | | — | |
Long-term debt | | $ | 1,981,237 | | | $ | 2,020,254 | | | $ | 586,203 | | | $ | 626,472 | |
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Note 7 — Revenue and Customers
Disaggregation of Revenue
The following table provides information about contract drilling services revenue by rig types:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2024 | | 2023 | | 2024 | | 2023 |
Floaters | | $ | 605,327 | | | $ | 549,130 | | | 1,617,538 | | | 1,519,346 | |
Jackups | | 158,216 | | | 121,874 | | | 419,140 | | | 333,128 | |
Total | | $ | 763,543 | | | $ | 671,004 | | | $ | 2,036,678 | | | $ | 1,852,474 | |
Contract Balances
Accounts receivable are recognized when the right to the consideration becomes unconditional based upon contractual billing schedules. Payment terms on invoiced amounts are typically 30 to 60 days. Customer contract assets and liabilities generally consist of deferred revenue and contract costs resulting from past transactions related to the provision of services under contracts with customers. Current contract asset and liability balances are included in “Prepaid expenses and other current assets” and “Other current liabilities,” respectively, and noncurrent contract assets and liabilities are included in “Other assets” and “Other liabilities,” respectively, on our Condensed Consolidated Balance Sheets. Off-market customer contract assets and liabilities have been recognized in connection with our emergence from Chapter 11, the Business Combination with Maersk Drilling, and the Diamond Transaction, and are included in “Intangible assets” and “Noncurrent contract liabilities,” respectively.
The following table provides information about contract assets and contract liabilities from contracts with customers:
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
Current customer contract assets | | $ | 17,166 | | | $ | 4,208 | |
Noncurrent customer contract assets | | 13,759 | | | 208 | |
Total customer contract assets | | 30,925 | | | 4,416 | |
| | | | |
Current deferred revenue | | (48,148) | | | (19,679) | |
Noncurrent deferred revenue | | (37,721) | | | (23,393) | |
Total deferred revenue | | $ | (85,869) | | | $ | (43,072) | |
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Significant changes in the remaining performance obligation contract assets and the contract liabilities balances for the nine months ended September 30, 2024 and 2023, are as follows:
| | | | | | | | | | | | | | |
| | Contract Assets | | Contract Liabilities |
Net balance at December 31, 2023 | | $ | 4,416 | | | $ | (43,072) | |
| | | | |
Amortization of deferred costs | | (17,088) | | | — | |
Additions to deferred costs | | 43,597 | | | — | |
Amortization of deferred revenue | | — | | | 54,411 | |
Additions to deferred revenue | | — | | | (97,208) | |
Total | | 26,509 | | | (42,797) | |
| | | | |
Net balance at September 30, 2024 | | $ | 30,925 | | | $ | (85,869) | |
| | | | |
Net balance at December 31, 2022 | | $ | 11,537 | | | $ | (59,797) | |
| | | | |
Amortization of deferred costs | | (21,722) | | | — | |
Additions to deferred costs | | 13,356 | | | — | |
Amortization of deferred revenue | | — | | | 62,125 | |
Additions to deferred revenue | | — | | | (35,891) | |
| | | | |
Total | | (8,366) | | | 26,234 | |
| | | | |
Net balance at September 30, 2023 | | $ | 3,171 | | | $ | (33,563) | |
Contract Costs
Certain direct and incremental costs incurred for upfront preparation, initial rig mobilization and modifications are costs of fulfilling a contract and are recoverable. These recoverable costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract. Certain of our contracts include capital rig enhancements used to satisfy our performance obligations.
Off-market Customer Contract Assets and Liabilities
Upon emergence from Chapter 11, the Company recognized fair value adjustments of $113.4 million related to intangible assets for certain favorable customer contracts, which were fully amortized as of August 2023. In addition, in connection with the Business Combination with Maersk Drilling, the Company recognized additional fair value adjustments of $23.0 million. These intangible assets will be amortized as a reduction of contract drilling services revenue from the Closing Date through the remainder of the contracts.
In connection with the Business Combination with Maersk Drilling and the Diamond Transaction, the Company recognized fair value adjustments of $237.7 million and $27.7 million, respectively, related to certain unfavorable customer contracts acquired. These liabilities will be amortized as an increase to contract drilling services revenue from the Closing Date and the Diamond Closing Date through the remainder of the contracts.
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
| | | | | | | | | | | | | | | |
| | Unfavorable contracts | | Favorable contracts | |
Balance at December 31, 2023 | | $ | (50,863) | | | $ | 10,128 | | |
Additions | | (27,663) | | | — | | |
Amortization | | 55,129 | | | (8,549) | | |
Balance at September 30, 2024 | | $ | (23,397) | | | $ | 1,579 | | |
| | | | | |
Balance at December 31, 2022 | | $ | (181,883) | | | $ | 34,372 | | |
Additions | | — | | | — | | |
Amortization | | 118,571 | | | (23,031) | | |
Balance at September 30, 2023 | | $ | (63,312) | | | $ | 11,341 | | |
Estimated future amortization over the expected remaining contract periods:
| | | | | | | | | | | | | | | | | | | | | | |
| | For the Year Ended December 31, | | |
| | 2024 | | 2025 | | | | Total |
Unfavorable contracts | | $ | 14,531 | | | $ | 8,866 | | | | | $ | 23,397 | |
Favorable contracts | | (1,365) | | | (214) | | | | | (1,579) | |
Total | | $ | 13,166 | | | $ | 8,652 | | | | | $ | 21,818 | |
Note 8 — Income Taxes
At September 30, 2024, the Company had deferred tax assets of $340.9 million, net of valuation allowance. Additionally, the Company also had deferred tax liabilities of $8.9 million, inclusive of a valuation allowance of $18.2 million.
During the three months ended September 30, 2024, the Company recognized additional discrete deferred tax benefits of $36.2 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana and Luxembourg.
During the nine months ended September 30, 2024, the Company recognized additional discrete deferred tax benefits of $117.8 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Nigeria, Switzerland, and Luxembourg.
During the three months ended September 30, 2023, the Company recognized additional discrete deferred tax benefits of $17.2 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Norway, Switzerland, and Luxembourg.
During the nine months ended September 30, 2023, the Company recognized additional discrete deferred tax benefits of $80.8 million, $18.1 million, $10.5 million, and $4.1 million in Guyana, Luxembourg, Switzerland, and Norway, respectively.
In deriving the above net deferred tax benefits, the Company relied on sources of income attributable to the projected taxable income for the period covered by the Company’s relevant existing drilling contracts based on the assumption that the relevant rigs will be owned by the relevant rig owners during the relevant existing drilling contract periods. Given the mobile nature of the Company’s assets, we are not able to reasonably forecast the jurisdictions in which taxable income from future drilling contracts may arise. We also have limited objective positive evidence in historical periods. Accordingly, in determining the amount of additional deferred tax assets to recognize, we did not consider projected book income beyond the conclusion of existing drilling contracts. As new drilling contracts are executed or as current contracts are extended, we will reassess the amount of deferred tax assets that are realizable. Finally, once we have established sufficient objective positive evidence for historical periods, we may consider reliance on forecasted taxable income from future drilling contracts.
At September 30, 2024, the reserves for uncertain tax positions totaled $208.4 million (net of related tax benefits of $8.8 million). At December 31, 2023, the reserves for uncertain tax positions totaled $202.3 million (net of related tax benefits of $0.1 million).
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may fluctuate in the next 12 months primarily due to the completion of open audits or the expiration of statutes of limitation.
During the three months ended September 30, 2024, our tax provision included tax benefits of $36.2 million related to releases of valuation allowance for deferred tax benefits primarily in Luxembourg. Such tax benefits are offset by tax expenses related to recurring quarterly accruals of $67.8 million mostly in Guyana, Luxembourg, Switzerland, and Nigeria.
During the nine months ended September 30, 2024, our tax provision included tax benefits of $117.8 million related to releases and adjustments of valuation allowance for deferred tax benefits in Nigeria, Switzerland, and Luxembourg. Such tax benefits are offset by recurring quarterly accruals of $134.0 million mostly in Guyana, Luxembourg, Switzerland, and Nigeria.
Note 9 — Employee Benefit Plans
Pension costs (gain) include the following components:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, |
| | 2024 | | 2023 |
| | Non-US | | US | | Non-US | | US |
Interest cost | | $ | 608 | | | $ | 2,188 | | | $ | 508 | | | $ | 2,248 | |
Return on plan assets | | (665) | | | (2,311) | | | (433) | | | (2,394) | |
Recognized net actuarial (gain) loss | | 28 | | | — | | | 54 | | | (58) | |
Net pension benefit cost (gain) | | $ | (29) | | | $ | (123) | | | $ | 129 | | | $ | (204) | |
| | | | | | | | |
| | Nine Months Ended September 30, |
| | 2024 | | 2023 |
| | Non-US | | US | | Non-US | | US |
Interest cost | | $ | 1,642 | | | $ | 6,563 | | | 1,632 | | | 6,744 | |
Return on plan assets | | (1,796) | | | (6,932) | | | (1,392) | | | (7,184) | |
Recognized net actuarial (gain) loss | | 77 | | | — | | | 176 | | | (173) | |
Net pension benefit cost (gain) | | $ | (77) | | | $ | (369) | | | $ | 416 | | | $ | (613) | |
During the three and nine months ended September 30, 2024 and 2023, we made no contributions to our pension plans. Effective December 31, 2016, employees and alternate payees accrue no future benefits under the US plans and, as such, Noble recognized no service costs with the plans for the three and nine months ended September 30, 2024 and 2023.
Note 10 — Commitments and Contingencies
Tax Matters
Audit claims of approximately $390.5 million attributable to income and other business taxes remain outstanding and are under continued objection by Noble. Such audit claims are primarily attributable to Brazil, Egypt, Ghana, and Guyana. We intend to vigorously defend our reported positions and currently believe the ultimate resolution of the audit claims will not have a material adverse effect on our condensed consolidated financial statements. This remains under continued monitoring and evaluation on a quarterly basis as facts change and as audits and/or litigation continue to progress.
We operate in numerous countries throughout the world and our tax returns filed in those jurisdictions are subject to review and examination by tax authorities within those jurisdictions. We recognize uncertain tax positions that we believe have a greater than 50% likelihood of being sustained upon challenge by a tax authority. We cannot predict or provide assurance as to the ultimate outcome of any existing or future assessments.
Hurricane Ida Personal Injury Claims
In preparation for Hurricane Ida in the US Gulf of Mexico in August 2021, the Noble Globetrotter II successfully secured the well it was drilling and detached from the blowout preventer without incident. Due to the environmental conditions, a
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
number of crew members were treated for injuries and released from medical care. We have had multiple parties, some of which are subject to a third-party contractual indemnity to our benefit, who have filed answers to the Limitation of Liability Action in the United States District Court Western District of Louisiana, seeking damages related to physical and emotional harm allegedly suffered as a result of the Hurricane Ida incident. We are in the discovery phase and we intend to defend ourselves vigorously against these claims, although there is inherent risk in litigation, and we cannot predict or provide assurance as to the ultimate outcome of this lawsuit. As claims progress, the Company’s estimated loss could change from time to time, and any such change individually or in the aggregate could be material. We have insurance for such claims with a deductible of $5.0 million, in addition to contractual indemnity owed to us for a portion of the third-party claims. Timing differences are likely to exist between any losses incurred and the recognition and receipt of insurance proceeds reflected in the Company’s financial statements. Costs, as well as insurance recoveries, are presented in “Hurricane losses and (recoveries), net” on the Condensed Consolidated Statement of Operations.
Services Agreement
In February 2016, Diamond entered into a ten-year agreement with a subsidiary of Baker Hughes Company (formerly named Baker Hughes, a GE company) to provide services with respect to certain blowout preventer and related well control equipment on our drillships. Such services include management of maintenance, certification, and reliability with respect to such equipment. Future commitments under the contractual services agreements are estimated to be approximately $24.7 million annually. Total future commitments are projected to be $73.6 million in the aggregate over the remaining term of the agreement, including a $37.0 million commitment for the purchase of consumables and capital spare parts owned and controlled by the vendor at the end of the service arrangement.
Letters of Credit and Surety bonds
As of September 30, 2024, we had $24.0 million of letters of credit issued under the 2023 Revolving Credit Facility and an additional $114.7 million in letters of credit and surety bonds issued under bilateral arrangements which guarantee our performance as it relates to our drilling contracts, contract bidding, tax appeals, customs duties, and other obligations in various jurisdictions. We expect to comply with the underlying performance requirements and we expect obligations under these letters of credit and surety bonds will not be called.
Other Contingencies
We are a defendant in certain claims and litigation arising out of operations in the ordinary course of business, including other personal injury claims, the resolution of which, in the opinion of management, will not be material to our financial position, results of operations, or cash flows. There is inherent risk in any litigation or dispute and no assurance can be given as to the outcome of these claims.
Note 11 — Supplemental Financial Information
Condensed Consolidated Balance Sheets Information
Restricted cash
Noble’s restricted cash balance as of September 30, 2024, and December 31, 2023, was $13.2 million and $7.0 million, respectively. All restricted cash is recorded in “Prepaid expenses and other current assets.”
Leases
We determine if an arrangement is a lease at inception. Our lease agreements are primarily for real estate, equipment, storage, dock space, and automobiles and are included within “Other assets”, “Other current liabilities”, and “Other liabilities” on our Condensed Consolidated Balance Sheets. In connection with the Diamond Transaction, the Company assumed several leases entered into by Diamond consisting of operating leases for corporate and shorebase offices, office and information technology equipment, employee housing, onshore storage yards, and certain rig equipment and tools as well as finance leases for well control equipment used on the drillships. The finance leases commenced in 2016 and also include an option to purchase the leased equipment at the end of the respective lease term.
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
Supplemental balance sheet information related to leases is as follows:
| | | | | | | | | | | | | | |
| | September 30, 2024 | | December 31, 2023 |
Operating leases | | | | |
Right-of-use assets | | $ | 83,775 | | | $ | 24,528 | |
Current lease liabilities | | 16,378 | | | 10,581 | |
Long-term lease liabilities | | 69,627 | | | 15,082 | |
Finance leases | | | | |
Right-of-use assets | | $ | 44,254 | | | $ | — | |
Current lease liabilities | | 26,443 | | | — | |
Long-term lease liabilities | | 15,616 | | | — | |
Condensed Consolidated Statements of Cash Flows Information
Operating cash activities
The net effect of changes in other assets and liabilities on cash flows from operating activities is as follows:
| | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
| | 2024 | | 2023 |
Accounts receivable | | $ | (10,232) | | | $ | (169,944) | |
Other current assets | | 8,624 | | | (30,250) | |
Other assets | | 153 | | | 7,356 | |
Accounts payable | | (18,136) | | | (721) | |
Other current liabilities | | 27,592 | | | 22,815 | |
Other liabilities | | 5,481 | | | 6,192 | |
Total net change in assets and liabilities | | $ | 13,482 | | | $ | (164,552) | |
Non-cash investing and financing activities
Non-cash investing and financing activities excluded from unaudited Condensed Consolidated Statements of Cash Flows are as follows:
| | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
| | 2024 | | 2023 |
Accrued capital expenditures at period end | | $ | 60,691 | | | $ | 71,291 | |
| | | | |
On September 4, 2024, Noble completed the acquisition of Diamond, which included $400.5 million in net cash paid and $879.9 million in non-cash consideration, primarily related to Noble shares issued to legacy Diamond shareholders and the replacement of legacy Diamond RSU Awards, in exchange for $1.5 billion net assets acquired. See “Note 2 — Acquisitions” for additional information.
Note 12 — Information about Noble Finance II
8.000% Senior Notes due 2030
Noble Finance II, a wholly owned subsidiary of Noble, or one or more 100% owned subsidiaries of Noble Finance II, is an issuer or full and unconditional guarantor or otherwise obligated as of September 30, 2024, with respect to the 2030 Notes. See “Note 6 — Debt” for additional information.
The indenture governing the 2030 Notes contains a covenant that requires Noble Finance II to furnish to holders of the 2030 Notes certain financial information relating to Noble Finance II and its restricted subsidiaries. The obligation to furnish such information may be satisfied by providing financial information of Noble along with a description of the differences between such information and the financial information of Noble Finance II and its restricted subsidiaries on a standalone basis.
NOBLE CORPORATION plc AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise indicated, dollar and share amounts in tables are in thousands, except per share data)
The summarized financial information below reflects the consolidated accounts of Noble Finance II:
| | | | | | | | |
| | September 30, 2024 |
Balance Sheet | | |
Cash and cash equivalents | | $ | 211,596 | |
Total current assets | | 1,568,804 | |
Total current liabilities | | 588,894 | |
Total debt | | 1,401,271 | |
Total shareholders' equity | | 4,469,705 | |
| | | | | | | | |
| | Nine Months Ended September 30, 2024 |
Statement of Operations | | |
Operating revenues | | $ | 2,035,977 | |
Operating costs and expenses | | 1,533,046 | |
Depreciation and amortization | | 275,990 | |
| | |
Statement of Cash Flows | | |
Net cash provided by (used in) operating activities | | $ | 611,988 | |
Capital expenditures | | (423,892) | |
Proceeds from disposal of assets, net | | (690) | |
Dividend payments | | — | |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion is intended to assist you in understanding our financial position at September 30, 2024, and our results of operations for the three and nine months ended September 30, 2024 and 2023. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q, the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), filed by Noble Corporation plc, a public limited company incorporated under the laws of England and Wales (“Noble”) and our other filings with the US Securities and Exchange Commission (“SEC”). References in this Quarterly Report on Form 10-Q to “Noble,” the “Company,” “we,” “us,” “our,” and words of similar meaning refer collectively to Noble and its consolidated subsidiaries.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, as amended. All statements other than statements of historical facts included in this report or in the documents incorporated by reference, are forward looking statements, including those regarding expected financial performance, revenues, expected utilization, and fleet status, stacking of rigs, effects of new rigs on the market revenues, operating expenses, cash flows, contract status, tenders, terms and duration, dayrates, termination and extensions, contract backlog, the availability, delivery, mobilization, stacking or reactivation, contract commencement, relocation or other movement of rigs and the timing thereof, contract claims, capital expenditures, insurance maintenance and renewals, access to financing, rig demand, peak oil, the offshore drilling market, oil prices, production levels among members of the Organization of Petroleum Exporting Countries (“OPEC”) and other oil and gas producing nations (together with OPEC, “OPEC+”), and any expectations we may have with respect thereto, our future financial position, business strategy, impairments, repayment of debt, credit ratings, liquidity, borrowings under any credit facilities or other instruments, sources of funds, cost inflation, planned acquisitions or divestitures of assets, governmental regulations and permitting, taxes and tax rates, indebtedness covenant compliance, dividends and distributable reserves, share repurchases, progress, plans and goals related to environmental, social, and governance matters; the outcome of tax disputes; assessments and settlements; and expense management, the outcome of any dispute, litigation, audit or investigation, plans, foreign currency requirements, results of joint ventures, general economic, market, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war, timing for compliance with any new regulations the benefits or results of acquisitions or dispositions (including the Business Combination (as defined herein) and the Diamond Transaction (as defined herein), our plans, objectives, expectations, and intentions related to the Business Combination and Diamond Transaction). Forward-looking statements involve risks, uncertainties, and assumptions, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. When used in this report or in the documents incorporated by reference, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “shall,” “target,” “will,” and similar expressions are intended to be among the terms that identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and we undertake no obligation to revise or update any forward-looking statement for any reason, except as required by law. The expectations expressing in forward-looking statements are subject to a number of risks and uncertainties, which include, but are not limited to: a decline in the price of oil or gas, reduced demand for oil and gas products and increased regulation of drilling and production, price competition and cyclicality in the offshore drilling industry, offshore rig supply, dayrates and demand for rigs, contract duration, renewal, terminations and repricing, national oil companies and governmental clients, contract backlog, risks related to the recently completed Diamond Transaction, including the risk that the benefits of the transaction may not be fully realized or may take longer to realize than expected, customer and geographic concentration, operational hazards and risks, labor force unionization, labor interruptions and labor regulations, major natural disasters, catastrophic events, acts of war, terrorism or social unrest, pandemic, or other similar event, joint ventures as well as investments in associates, international operations and related mobilization and demobilization of rigs, operational interruptions, delays, upgrades, refurbishment and repair of rigs and any related delays and cost overruns or reduced payment of dayrates, impacts of inflation, renewal of insurance, protection of sensitive information, operational technology systems and critical data, the ability to attract and retain skilled personnel or the increased cost in doing so, supplier capacity constraints or shortages in parts or equipment, supplier production disruptions, supplier quality and sourcing issues or price increases, future mergers, acquisitions or dispositions of businesses or assets or other strategic transactions, hurricanes and windstorm damage, responding to energy rebalancing, non-performance of suppliers or third-party subcontractors, risks related to the Business Combination and the Diamond Transaction and the related integration and compliance with laws and regulations, increasing attention to environmental, social, and governance matters, including climate change, compliance with anti-bribery or anti-corruption, international trade laws and regulations, litigation, our ability to maintain effective disclosure controls and procedures and internal control over financial reporting, impairments on property and equipment, including rigs and related capital spares, operating and financial restrictions and maintenance of covenants in our debt financing, tax disputes or tax challenges, that could cause actual plans or results to differ materially from those included in any forward-looking statements. Actual results could differ materially from those expressed as a result of various factors and could, among other impacts, impact our ability to repurchase shares and declare and pay dividends such that we suspend our share repurchase program and reduce, suspend, or totally eliminate dividend payments in the future. These factors include those “Risk Factors” referenced or described in Part II, Item 1A “Risk Factors” of this Form 10-Q, Part I, Item 1A. “Risk Factors” of our Form 10-K, and in our other filings with the SEC. We cannot control such risk factors and other uncertainties, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. You should
consider these risks and uncertainties when you are evaluating us. Future quarterly dividends and other shareholder returns will be subject to, amongst other things, approval by the Board of Directors, and may be modified as market conditions dictate.
Our Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at our website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Our website address is http://www.noblecorp.com. Investors should also note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the investor relations section of our website to communicate with our investors. It is possible that the financial and other information (including fleet status reports) posted there could be deemed to be material information. Noble may also use social media channels including, but not limited to, Noble's accounts on LinkedIn, Facebook, Instagram, and Twitter, to communicate with investors and the public about its business, services, and other matters, and those communications could be deemed to be material information. Except to the extent explicitly stated herein, documents and information on our website or our social media channels are not incorporated by reference herein.
Executive Overview
Noble is a leading offshore drilling contractor for the oil and gas industry. As of the filing date of this Quarterly Report on Form 10-Q, Noble performs, through its subsidiaries, contract drilling services with a fleet of 41 drilling rigs, consisting of 28 floaters and 13 jackups focused largely on ultra-deepwater and high-specification jackup drilling opportunities in both established and emerging regions worldwide. Following the recent Diamond Transaction, our total floater count now also includes several lower specification semisubmersibles. We typically employ each drilling unit under an individual contract, and many contracts are awarded based upon a competitive bidding process.
We report our contract drilling operations as a single reportable segment, Contract Drilling Services, which reflects how we manage our business. The mobile offshore drilling units comprising our offshore rig fleet operate in a global market for contract drilling services and are often redeployed to different regions due to changing demands of our customers, which consist primarily of large, integrated, independent and government-owned or controlled oil and gas companies throughout the world.
Recent Events
Diamond Transaction. On June 9, 2024, Noble entered into an agreement and plan of merger (the “Diamond Merger Agreement”) with Diamond Offshore Drilling, Inc. (“Diamond”), Dolphin Merger Sub 1, Inc., and Dolphin Merger Sub 2, Inc., under which Noble would acquire Diamond in a stock plus cash transaction (the “Diamond Transaction”). On September 4, 2024 (“the Diamond Closing Date”), Noble completed its acquisition of Diamond. Pursuant to the terms and conditions set forth in the Diamond Merger Agreement, Diamond shareholders received 0.2316 shares of Noble, plus cash consideration of $5.65 per share for each share of Diamond.
8.000% Senior Notes due 2030. In August 2024, Noble Finance II issued an additional $800.0 million in aggregate principal amount of its 8.000% Senior Notes due 2030 at a premium of 103% bringing the total outstanding principal amount to $1.4 billion (collectively, the “2030 Notes”). The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023, among Noble Finance II, certain subsidiaries of Noble Finance II (the “Guarantors”), and U.S. Bank Trust Company, National Association, as trustee.
Market Outlook
In recent years, oil prices have generally remained at levels that are supportive of offshore exploration and development activity and global rig demand is increasing. This increasing demand has been caused by the combination of growing confidence in commodity prices, heightened focus on energy security, recent multi-year underinvestment in the development and exploration of hydrocarbons, and relative attractiveness of offshore plays with respect to both cost and carbon emissions. This increase had a positive impact on dayrates for certain of our rig classes.
The global rig supply has come down from historic highs as Noble and other offshore drilling contractors have retired less capable and idle assets. Concurrently, the incoming supply of newbuild offshore drilling rigs has diminished materially, with several newbuild rigs stranded in shipyards. However, we expect many of these stranded newbuild rigs may continue to make their way into the global market over the next few years.
Although the market outlook in our business varies by geographical region and water depth, we remain encouraged by the long-term outlook in the ultra-deepwater floater market, with overall demand having increased from 2020 lows. However, within this ultra-deepwater market, our customers continue to focus on our highest specification floaters, which represents the majority of our floater fleet. Assuming current market fundamentals, continued customer prioritization towards these highest specification floaters is likely to result in lower utilization for our lower specification drillships and our semi-submersibles. Demand for midwater semisubmersibles is primarily driven by brownfield activity in mature basins, especially in Northwest Europe and the Asia Pacific regions, where a generally stable level of baseload demand is supported by infield drilling and plug and abandonment requirements. We have also observed an overall demand increase in the global jackup market since 2020, with the Middle East being the largest component of this increase. While we remain encouraged about overall rig demand, to the extent global macroeconomic concerns become more prevalent and produce downward pressure on oil and gas prices, we could experience downward pressure on overall rig demand for both floaters and jackups.
As of the date of this report, the majority of our jackup fleet is positioned in the North Sea. While we are starting to see some increased tender activity in the UK North Sea, overall activity levels in this region remain subdued compared to historical levels. The Norway ultra-harsh environment jackup market is similar, where current activity also remains below
historical levels, despite the market being attractive to operators given it is characterized by low-cost and low-emission barrels.
Returning to the broader offshore drilling market, while the length of contract terms has started to moderately increase, the overall market remains characterized by generally shorter-term contracts. This leads to an increased number of rig contract start-ups, both with different customers and among different regions. These rig contract start-ups and other shipyard projects may result in incremental resources and costs and, in certain cases, may delay delivery of the applicable rig which may trigger applicable late delivery clauses. A combination of customers delaying certain drilling programs and shorter-term contracts, have resulted in, and are likely to continue to result in, lower overall utilization for our fleet.
The energy transition from hydrocarbons to renewables poses a challenge to the oil and gas sector and our market. Energy rebalancing trends have accelerated in recent years as evidenced by promulgated or proposed government policies and commitments by many of our customers to further invest in sustainable energy sources. Our industry could be further challenged as our customers rebalance their capital investments more towards alternative energy sources. However, at the same time, there continues to be a global dependence on the combustion of hydrocarbons to provide reliable and affordable energy. Low-cost and low-emission barrels are expected to be the most attractive conventional source to meet energy needs, both currently and in the future. Global energy demand is predicted to increase over the coming decades, and we expect that offshore oil and gas will continue to play an important and lasting role in meeting this demand.
We expect inflationary pressures to persist, which has led or may lead to increased costs of services. Additionally, we expect supply chain disruptions to continue, and potentially accelerate, as geopolitical crises, such as the Russia-Ukraine conflict, Middle East conflicts, the Guyana-Venezuela dispute, and their respective regional and global ramifications, have the potential to negatively impact our ability to conduct our day-to-day operations.
Contract Drilling Services Backlog
We maintain a backlog of commitments for contract drilling services. Our contract drilling services backlog reflects estimated future revenues attributable to signed drilling contracts. While backlog did not include any letters of intent as of September 30, 2024, in the past we have included in backlog certain letters of intent that we expect to result in binding drilling contracts. As of September 30, 2024, contract drilling services backlog totaled approximately $6.5 billion, which includes a commitment of approximately 70% of available days for the remainder of 2024.
We calculate backlog for any given unit and period by multiplying the full contractual operating dayrate for such unit by the number of days remaining in the period, and include certain assumptions based on the terms of certain contractual arrangements, discussed in the notes to the table below. The reported contract drilling services backlog does not include amounts representing revenues for mobilization, demobilization, and contract preparation, which are not expected to be significant to our contract drilling services revenues, amounts constituting reimbursables from customers, or amounts attributable to uncommitted option periods under drilling contracts or letters of intent.
The table below presents the amount of our contract drilling services backlog as of September 30, 2024, and the percent of available operating days committed for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Year Ending December 31, |
| | Total | | 2024 (1) | | 2025 | | 2026 | | 2027 | | 2028 |
| | (In thousands) |
Contract Drilling Services Backlog | | | | | | | | | | | | |
Floaters (2) | | $ | 5,563,671 | | | $ | 693,300 | | | $ | 2,179,556 | | | $ | 1,458,562 | | | $ | 828,953 | | | $ | 403,300 | |
Jackups (3) | | 925,631 | | 137,555 | | 390,293 | | 214,723 | | 183,060 | | — |
Total | | $ | 6,489,302 | | | $ | 830,855 | | | $ | 2,569,849 | | | $ | 1,673,285 | | | $ | 1,012,013 | | | $ | 403,300 | |
Percent of Available Days Committed (4) | | | | | | | | | | | | |
Floaters | | | | 65 | % | | 49 | % | | 33 | % | | 21 | % | | 9 | % |
Jackups | | | | 81 | % | | 50 | % | | 18 | % | | 14 | % | | — | % |
Total | | | | 70 | % | | 49 | % | | 28 | % | | 19 | % | | — | % |
(1)Represents a three-month period beginning October 1, 2024.
(2)Noble entered into a multi-year Commercial Enabling Agreement (the “CEA”) with ExxonMobil in February 2020. Under the CEA, dayrates for the rigs are repriced on March 1 and September 1 each year to the projected market rate at the time the new rate goes into effect, subject to a scale-based discount and a performance bonus that appropriately aligns the interests of Noble and ExxonMobil. Under the CEA, the table above includes awarded and remaining current contract term to August 18, 2028, related to each of the four following rigs: the Noble Tom Madden, Noble Bob Douglas, Noble Don Taylor, and Noble Sam Croft. Under the CEA, ExxonMobil may reassign remaining contract term among rigs, subject to maintaining certain minimum contract term on the rig from which term is removed.
(3)In 2022, Noble renewed its five-year Framework Agreement with Aker BP (the “Framework Agreement”) for the provision of ultra-harsh environment jackup rigs, the Noble Integrator and Noble Invincible, for activities offshore Norway. Under the Framework Agreement, different rate structures apply reflecting different operating modes, agreed incentive schemes, and adjustments for operating expenses. Rate structures are adjusted annually to reflect market conditions.
(4)Percent of available days committed is calculated by dividing the total number of days our rigs are operating under contract for such period by the product of the number of our rigs, including cold-stacked rigs, and the number of calendar days in such period.
The amount of actual revenues earned and the actual periods during which revenues are earned may be materially different than the backlog amounts and backlog periods presented in the table above due to various factors, including, but not limited to, shipyard and maintenance projects, unplanned downtime, the operation of market benchmarks for dayrate resets, achievement of bonuses, weather conditions, reduced standby or mobilization rates, and other factors that result in applicable dayrates lower than the full contractual operating dayrate. In addition, amounts included in the backlog may change because drilling contracts may be varied or modified according to their terms or by mutual consent, or customers may exercise early termination rights contained in some of our drilling contracts or decline to enter into a drilling contract after executing a letter of intent. As a result, our backlog as of any particular date may not be indicative of our actual operating results for the periods for which the backlog is calculated. See Part I, Item 1A, “Risk Factors – Risks Related to Our Business and Operations – Our current backlog of contract drilling revenue may not be ultimately realized” in our Form 10-K.
As of September 30, 2024, ExxonMobil, Petrobras, and BP represented approximately 38.0%, 13.5%, and 13.3% of our backlog, respectively.
Results of Operations
Results for the Three Months Ended September 30, 2024 and 2023
Net income for the three months ended September 30, 2024 (the “current quarter”), was $61.2 million, or $0.40 per diluted share, on operating revenues of $800.5 million compared to net income for the three months ended September 30, 2023, of $158.3 million, or $1.09 per diluted share, on operating revenues of $697.5 million.
Key Operating Metrics
Operating results for our contract drilling services segment are dependent on three primary metrics: operating days, dayrates, and operating costs. We also track rig utilization, which is a function of operating days and the number of rigs in our fleet. For more information on operating costs, see “Contract Drilling Services” below.
The following table presents the average rig utilization, operating days, and average dayrates for our rig fleet for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Average Rig Utilization (1) | | Operating Days (2) | | Average Dayrates (2) | | |
| | Three Months Ended September 30, | | Three Months Ended September 30, | | Three Months Ended September 30, | | |
| | 2024 | | 2023 | | 2024 | | 2023 | | 2024 | | 2023 | | |
Floaters | | 72 | % | | 77 | % | | 1,418 | | | 1,348 | | | $ | 424,199 | | | $ | 403,813 | | | |
Jackups | | 83 | % | | 64 | % | | 991 | | | 824 | | | 159,444 | | | 140,775 | | | |
Total | | 76 | % | | 72 | % | | 2,409 | | | 2,172 | | | $ | 315,295 | | | $ | 304,040 | | | |
(1)We define utilization for a specific period as the total number of days our rigs are operating under contract divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet.
(2)An operating day is defined as a calendar day during which a rig operated under a drilling contract. We define average dayrates as revenue from contract drilling services earned per operating day. Average dayrates exclude the effect of non-cash amortization related to favorable and unfavorable off-market customer contract assets and liabilities.
Contract Drilling Services
The following table presents the operating results for our contract drilling services segment for the periods indicated (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Change |
Operating revenues: | | 2024 | | 2023 | | $ | | % |
Contract drilling services | | $ | 763,543 | | | $ | 671,004 | | | $ | 92,539 | | | 14 | % |
Reimbursables and other (1) | | 37,006 | | | 26,446 | | | 10,560 | | | 40 | % |
| | 800,549 | | | 697,450 | | | 103,099 | | | 15 | % |
Operating costs and expenses: | | | | | | | | |
Contract drilling services | | $ | 434,192 | | | $ | 354,199 | | | $ | 79,993 | | | 23 | % |
Reimbursables (1) | | 28,185 | | | 16,682 | | | 11,503 | | | 69 | % |
Depreciation and amortization | | 109,879 | | | 77,146 | | | 32,733 | | | 42 | % |
General and administrative | | 43,596 | | | 33,039 | | | 10,557 | | | 32 | % |
Merger and integration costs | | 69,214 | | | 12,966 | | | 56,248 | | | 434 | % |
(Gain) loss on sale of operating assets, net | | — | | | — | | | — | | | — | % |
Hurricane losses and (recoveries), net | | — | | | 2,642 | | | (2,642) | | | (100) | % |
| | 685,066 | | | 496,674 | | | 188,392 | | | 38 | % |
Operating income (loss) | | $ | 115,483 | | | $ | 200,776 | | | $ | (85,293) | | | (42) | % |
(1)We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations, or cash flows.
The following table provides information about contract drilling revenue and costs by rig types (dollars in millions except average dayrates):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, |
| | | 2024 | | 2023 |
| | | Floaters | | Jackups | | Floaters | | Jackups |
Contract drilling services revenues | | $ | 605.3 | | | $ | 158.2 | | | $ | 549.1 | | | $ | 121.9 | |
Contract drilling services costs | | $ | 332.6 | | | $ | 101.6 | | | $ | 266.9 | | | $ | 87.3 | |
Average rig utilization | | | 72 | % | | 83 | % | | 77 | % | | 64 | % |
Operating days | | | 1,418 | | | 991 | | | 1,348 | | | 824 | |
Average dayrates | | | $ | 424,199 | | | $ | 159,444 | | | $ | 403,813 | | | $ | 140,775 | |
Total rigs | — Beginning | | 18 | | | 13 | | | 19 | | | 13 | |
| — Acquired | | 11 | | | — | | | — | | | — | |
| — Disposed | | (1) | | | — | | | — | | | — | |
| — Ending | | 28 | | | 13 | | | 19 | | | 13 | |
Contract Drilling Services Revenues
Floaters. During the third quarter of 2024, floaters generated revenue of $605.3 million, as compared to $549.1 million in the third quarter of 2023. The increase in revenue was mainly attributable to $84.0 million provided by the 10 additional floaters acquired in connection with the Diamond Transaction as well as $56.8 million from an increase in average dayrates in the current period. These increases were partly offset by $83.4 million from rigs with net changes in operating days in the current period.
Jackups. During the third quarter of 2024, jackups generated revenue of $158.2 million, as compared to $121.9 million in the third quarter of 2023. The increase in revenue was mainly attributable to $24.8 million from an increase in average
dayrates in the current period and $20.3 million from rigs with net changes in operating days in the current period. Additionally, jackup revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $5.7 million in the current period.
Operating Costs and Expenses
Floaters. During the third quarter of 2024, total contract drilling services costs related to floaters was $332.6 million, as compared to $266.9 million in the third quarter 2023. The primary drivers of this increase were $44.0 million related to the 10 additional floaters acquired in connection with the Diamond Transaction, $7.6 million in repairs and maintenance, $4.0 million in transportation and storage, and $19.3 million in non-labor crew costs and operations support costs across the fleet. These increases were partially offset by decreases of $3.3 million in labor, and $6.0 million in mobilization.
Jackups. During the third quarter of 2024, total contract drilling services cost related to jackups was $101.6 million, as compared to $87.3 million in the third quarter 2023. The primary drivers of the aggregate increase of $29.6 million related to labor costs, repairs and maintenance, mobilization, operations support, and other costs across the fleet. These increases were partially offset by decreases in fuel and other costs across the fleet. Further, there was a decrease of $15.3 million after the completion of disposal activities regarding certain rigs.
Depreciation and amortization. Depreciation and amortization totaled $109.9 million and $77.1 million during the third quarter of 2024 and 2023, respectively. Depreciation and amortization increased by $32.7 million in the current quarter primarily due to the timing of capital additions that were placed in service as compared to retirements among the periods and the Diamond Transaction.
General and administrative. General and administrative expenses totaled $43.6 million and $33.0 million during the third quarter of 2024 and 2023, respectively. The increase was primarily a result of the Diamond Transaction and other individually insignificant items within certain corporate charges such as professional fees, corporate leases, and employee related costs.
Merger and integration costs. Noble incurred $69.2 million and $13.0 million of merger and integration costs during the third quarter of 2024 and 2023, respectively. In the third quarter of 2024, $63.1 million and $6.1 million of costs related directly to the Diamond Transaction and the Business Combination with Maersk Drilling, respectively. Costs incurred prior to the third quarter of 2024 related to the Business Combination with Maersk Drilling in October 2022. A majority of the costs in the third quarter of 2024 attributable to the Diamond Transaction related to the closing of the transaction and included charges for professional fees, severance, and share-based compensation.
Hurricane losses and (recoveries), net. During the third quarter of 2024, costs incurred in connection with the Hurricane Ida incident were offset by accrued recoveries. For additional information about the Hurricane Ida incident, see “Note 10 — Commitments and Contingencies” to our unaudited condensed consolidated financial statements.
Other Income and Expenses
Interest expense, net of amounts capitalized. Interest expense totaled $25.0 million and $13.0 million during the third quarter of 2024 and 2023, respectively. Interest expense primarily relates to our 8.000% Senior Notes issued in August 2024 and April 2023 as well as 8.500% Senior Secured Second Lien Notes assumed in connection with the Diamond Transaction. For additional information, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
Gain on bargain purchase. Noble recognized a $5.0 million gain on the bargain purchase of Maersk Drilling during the third quarter of 2023. For additional information, see “Note 2 — Acquisitions” to our unaudited condensed consolidated financial statements.
Interest income and other, net. Noble recognized other income of $2.3 million and $17.2 million during the third quarter of 2024 and 2023, respectively. The third quarter of 2023 included approximately $18.0 million of compensation related to a joint taxation scheme with A.P. Møller Holding A/S.
Income tax benefit (provision). Noble recorded an income tax provision of $31.6 million and $51.7 million during the third quarter of 2024 and 2023, respectively.
During the third quarter of 2024, our tax provision included tax benefits of $36.2 million related to releases of valuation allowance for deferred tax benefits primarily in Luxembourg. Such tax benefits are offset by tax expenses related to recurring quarterly accruals of $67.8 million mostly in Guyana, Luxembourg, Switzerland, and Nigeria.
During the third quarter of 2023, our tax provision included tax benefits of $17.2 million related to releases and adjustments of valuation allowance for deferred tax benefits in Guyana, Norway, Switzerland, and Luxembourg and a tax benefit of $2.0 million related to a foreign tax credit refund. Such tax benefits are offset by tax expenses related to contract fair value amortization of $7.4 million and various recurring quarterly accruals of $63.5 million primarily in Guyana, Australia, Denmark, and Luxembourg.
Results for the Nine Months Ended September 30, 2024 and 2023
Net income for the nine months ended September 30, 2024, was $351.7 million, or $2.37 per diluted share, on operating revenues of $2.1 billion compared to compared to net income for the nine months ended September 30, 2023, of $332.2 million, or $2.29 per diluted share, on operating revenues of $1.9 billion.
Key Operating Metrics
Operating results for our contract drilling services segment are dependent on three primary metrics: operating days, dayrates, and operating costs. We also track rig utilization, which is a function of operating days and the number of rigs in our fleet. For more information on operating costs, see “Contract Drilling Services” below.
The following table presents the average rig utilization, operating days and average dayrates for our rig fleet for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Average Rig Utilization (1) | | Operating Days (2) | | Average Dayrates (2) | | |
| | Nine Months Ended September 30, | | Nine Months Ended September 30, | | Nine Months Ended September 30, | | |
| | 2024 | | 2023 | | 2024 | | 2023 | | 2024 | | 2023 | | |
Floaters | | 69 | % | | 77 | % | | 3,658 | | | 3,966 | | | $ | 430,615 | | | $ | 366,560 | | | |
Jackups | | 76 | % | | 65 | % | | 2,700 | | | 2,487 | | | 153,648 | | | 121,913 | | | |
Total | | 71 | % | | 72 | % | | 6,358 | | | 6,453 | | | $ | 313,007 | | | $ | 272,279 | | | |
(1)We define utilization for a specific period as the total number of days our rigs are operating under contract divided by the product of the total number of our rigs, including cold stacked rigs, and the number of calendar days in such period. Information reflects our policy of reporting on the basis of the number of available rigs in our fleet.
(2)An operating day is defined as a calendar day during which a rig operated under a drilling contract. We define average dayrates as revenue from contract drilling services earned per operating day. Average dayrates exclude the effect of non-cash amortization related to favorable and unfavorable off-market customer contract assets and liabilities.
Contract Drilling Services
The following table presents the operating results for our contract drilling services segment for the periods indicated (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | |
| | Nine Months Ended September 30, | | Change |
Operating revenues: | | 2024 | | 2023 | | $ | | % |
Contract drilling services | | $ | 2,036,678 | | | $ | 1,852,474 | | | $ | 184,204 | | | 10 | % |
Reimbursables and other (1) | | 93,799 | | | 93,565 | | | 234 | | | — | % |
| | $ | 2,130,477 | | | $ | 1,946,039 | | | $ | 184,438 | | | 9 | % |
Operating costs and expenses: | | | | | | | | |
Contract drilling services | | $ | 1,159,913 | | | $ | 1,078,521 | | | $ | 81,392 | | | 8 | % |
Reimbursables (1) | | 69,196 | | | 67,484 | | | 1,712 | | | 3 | % |
Depreciation and amortization | | 287,347 | | | 218,412 | | | 68,935 | | | 32 | % |
General and administrative | | 109,226 | | | 95,428 | | | 13,798 | | | 14 | % |
Merger and integration costs | | 89,163 | | | 47,049 | | | 42,114 | | | 90 | % |
(Gain) loss on sale of operating assets, net | | (17,357) | | | — | | | (17,357) | | | — | % |
Hurricane losses and (recoveries), net | | — | | | 22,120 | | | (22,120) | | | (100) | % |
| | 1,697,488 | | | 1,529,014 | | | 168,474 | | | 11 | % |
Operating income (loss) | | $ | 432,989 | | | $ | 417,025 | | | $ | 15,964 | | | 4 | % |
(1)We record reimbursements from customers for out-of-pocket expenses as operating revenues and the related direct costs as operating expenses. Changes in the amount of these reimbursables generally do not have a material effect on our financial position, results of operations, or cash flows.
The following table provides information about contract drilling revenue and costs by rig types (dollars in millions except average dayrates):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Nine Months Ended September 30, |
| | | 2024 | | 2023 |
| | | Floaters | | Jackups | | Floaters | | Jackups |
Contract drilling services revenues | | $ | 1,617.5 | | | $ | 419.1 | | | $ | 1,519.3 | | | $ | 333.1 | |
Contract drilling services costs | | $ | 870.9 | | | $ | 289.0 | | | $ | 816.3 | | | $ | 262.2 | |
Average rig utilization | | | 69 | % | | 76 | % | | 77 | % | | 65 | % |
Operating days | | | 3,658 | | | 2,700 | | | 3,966 | | | 2,487 | |
Average dayrates | | | $ | 430,615 | | | $ | 153,648 | | | $ | 366,560 | | | $ | 121,913 | |
Total rigs | — Beginning | | 19 | | | 13 | | | 19 | | | 13 | |
| — Acquired | | 11 | | | — | | | — | | | — | |
| — Disposed | | (2) | | | — | | | — | | | — | |
| — Ending | | 28 | | | 13 | | | 19 | | | 13 | |
Contract Drilling Services Revenues
Floaters. During the nine months ended September 30, 2024, floaters generated revenue of $1.6 billion, as compared to $1.5 billion in the nine months ended September 30, 2023. The increase in revenue was mainly attributable to $84.0 million provided by the 10 additional floaters acquired in connection with the Diamond Transaction as well as $247.0 million from an increase in average dayrates in the current period. These increases were partly offset by $209.6 million from rigs with net changes in operating days in the current period. Additionally, floater revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $23.2 million in the current period.
Jackups. During the nine months ended September 30, 2024, jackups generated revenue of $419.1 million, as compared to $333.1 million in the nine months ended September 30, 2023. The increase in revenue was mainly attributable to $72.8 million from an increase in average dayrates in the current period and $41.2 million from rigs with net changes in operating days in the current period. Additionally, jackup revenue from net non-cash amortization related to off-market customer contract assets and liabilities decreased $25.6 million in the current period.
Operating Costs and Expenses
Floaters. During the nine months ended September 30, 2024, total contract drilling services costs related to floaters was $870.9 million, as compared to $816.3 million in the nine months ended September 30, 2023. The primary drivers of this increase were $44.0 million related to the 10 additional floaters acquired in connection with the Diamond Transaction, $13.2 million in repairs and maintenance, $10.9 million in labor, $10.5 million in transportation and storage, $6.0 million in fuel, and $6.3 million in non-labor crew costs and operations support costs across the fleet. These increases were offset by a decrease of $36.3 million in mobilization.
Jackups. During the nine months ended September 30, 2024, total contract drilling services cost related to jackups was $289.0 million, as compared to $262.2 million in the nine months ended September 30, 2023. The primary drivers of the aggregate increase of $65.7 million related to labor costs, repairs and maintenance, operations support, and other costs across the fleet. These increases were partially offset by decreases in fuel and other costs across the fleet. Further, there was a decrease of $38.9 million after the completion of disposal activities regarding certain rigs.
Depreciation and amortization. Depreciation and amortization totaled $287.3 million and $218.4 million during the nine months ended September 30, 2024 and 2023, respectively. Depreciation and amortization increased by $68.9 million in the current period primarily due to the timing of capital additions that were placed in service as compared to retirements among the periods as well as an incremental amount added in connection with the Diamond Transaction.
General and administrative. General and administrative expenses totaled $109.2 million and $95.4 million during the nine months ended September 30, 2024 and 2023, respectively. The increase was primarily a result of the Diamond Transaction and other individually insignificant items within certain corporate charges such as professional fees, corporate leases, and employee related costs.
Merger and integration costs. Noble incurred $89.2 million and $47.0 million of merger and integration costs during the nine months ended September 30, 2024 and 2023, respectively, primarily as a result of the Diamond Transaction and the Business Combination with Maersk Drilling. During the current period, $69.4 million and $19.8 million of costs related directly to the Diamond Transaction and the Business Combination with Maersk Drilling, respectively. Costs incurred prior to 2024 related to the Business Combination with Maersk Drilling in October 2022. A majority of the costs attributable to the Diamond Transaction related to the closing of the transaction and included charges for professional fees, severance, and share-based compensation.
Hurricane losses and (recoveries). During the nine months ended September 30, 2024, costs incurred in connection with the Hurricane Ida incident were offset by accrued recoveries. For additional information about the Hurricane Ida incident, see “Note 10 — Commitments and Contingencies” to our unaudited condensed consolidated financial statements.
Other Income and Expenses
Interest expense, net of amounts capitalized. Interest expense totaled $54.5 million and $44.5 million during the nine months ended September 30, 2024 and 2023, respectively. Interest expense primarily relates to our 8.000% Senior Notes issued in August 2024 and in April 2023, which refinanced prior debt assumed in the Business Combination with Maersk Drilling in October 2022 as well as 8.500% Senior Secured Second Lien Notes assumed in connection with the Diamond Transaction. In the nine months ended September 30, 2024, $3.5 million of interest expense related to non-income taxes partially offset decreases in interest on debt. For additional information, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
Gain on bargain purchase. Noble recognized a $5.0 million gain on the bargain purchase of Maersk Drilling during the third quarter of 2023. For additional information, see “Note 2 — Acquisitions” to our unaudited condensed consolidated financial statements.
Interest income and other, net. Noble recognized other losses of $10.6 million and other income of $16.3 million during the nine months ended September 30, 2024 and 2023, respectively. The nine months ended September 30, 2023, included approximately $18.0 million of compensation related to a joint taxation scheme with A.P. Møller Holding A/S.
Income tax benefit (provision). Noble recorded an income tax provision of $16.2 million and $35.2 million during the nine months ended September 30, 2024 and 2023, respectively.
During the nine months ended September 30, 2024, our tax provision included tax benefits of $117.8 million related to releases and adjustments of valuation allowance for deferred tax benefits in Nigeria, Switzerland, and Luxembourg. Such tax benefits are offset by recurring quarterly accruals of $134.0 million mostly in Guyana, Luxembourg, Switzerland, and Nigeria.
During the nine months ended September 30, 2023, our tax provision included tax benefits of $113.5 million related to releases of valuation allowance for deferred tax benefits in Guyana, Luxembourg, Norway and Switzerland; a tax benefit of $6.8 million related to a Ghana uncertain tax position release, and a tax benefit of $2.0 million related to a foreign tax credit refund. Such tax benefits are offset by tax expenses related to a Mexico uncertain tax position of $9.8 million, contract fair value amortization of $16.3 million, and various recurring quarterly accruals of $131.3 million primarily in Guyana, Australia, Denmark, and Luxembourg.
Liquidity and Capital Resources
Amended and Restated Senior Secured Revolving Credit Agreement
On April 18, 2023, Noble entered into the 2023 Revolving Credit Agreement. The Revolving Credit Facility under the 2023 Revolving Credit Agreement provides for commitments of $550 million with maturity in 2028. The guarantors under the 2023 Revolving Credit Facility are the same subsidiaries of Noble Finance II that are or will be guarantors of the 2030 Notes.
As of September 30, 2024, we had no borrowings outstanding and $24.0 million of letters of credit issued under the 2023 Revolving Credit Facility. For additional information about our 2023 Revolving Credit Facility as of September 30, 2024, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
8.000% Senior Notes due 2030
In August 2024, Noble Finance II issued an additional $800.0 million in aggregate principal amount of its 8.000% Senior Notes due 2030 at a premium of 103% bringing the total outstanding principal amount to $1.4 billion. The 2030 Notes were issued pursuant to an indenture, dated April 18, 2023, among Noble Finance II, the Guarantors, and U.S. Bank Trust Company, National Association, as trustee. For additional information about the 2030 Senior Notes, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
Diamond Second Lien Notes due 2030
In connection with the Diamond Transaction, the Company assumed $550 million aggregate principal amount of 8.500% Senior Secured Second Lien Notes due October 2030 issued by Diamond Foreign Asset Company and Diamond Finance, LLC. For additional information about the Diamond Second Lien Notes, see “Note 6 — Debt” to our unaudited condensed consolidated financial statements.
Diamond Credit Facility
In connection with the Diamond Transaction, the Company terminated Diamond’s $300 million senior secured revolving credit facility, which was scheduled to mature in April 2026. At the time of the merger and termination, Diamond had no outstanding borrowings under the facility.
Sources and Uses of Cash
Our principal sources of capital in the current period were cash generated from operating activities as well as net proceeds from the issuance of additional 2030 Notes. Cash on hand during the current period was primarily used for the following:
•cash consideration and fees related to the Diamond Transaction;
•normal recurring operating expenses;
•planned and discretionary capital expenditures;
•fees and expenses related to merger and integration costs;
•share repurchases and dividend payments; and
•certain contractual cash obligations and commitments.
Our anticipated cash flow needs, both in the short term and long term, may also include repurchases, redemptions, or repayments of debt and interest.
We currently expect to fund our cash flow needs with cash generated by our operations, cash on hand, proceeds from sales of assets, or borrowings under the 2023 Revolving Credit Facility and we believe this will provide us with sufficient liquidity to fund our cash flow needs over the next 12 months. Subject to market conditions and other factors, we may also issue equity or long-term debt securities to fund our cash flow needs and for other purposes. In 2023 and during the first three quarters of 2024, we incurred additional expenses and capital costs related to the damage and repair of two jackup rigs. Additionally, during the third quarter of 2024, we incurred additional expenses and capital costs related to the damage and repair of one floater. These incurred costs exceeded our deductible amount. As such, we have received partial insurance recoveries and we continue to seek insurance recoveries for the remainder of the incurred and anticipated costs.
Net cash provided by operating activities was $519.3 million and $286.8 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in net cash provided by operating activities for the nine months ended September 30, 2024 was primarily attributable to improvements in cash flows from operating assets and liabilities, with key drivers being an increase in payments from customers offset by a reduction in payments to vendors. We had working capital of $510.2 million at September 30, 2024, and $420.1 million at December 31, 2023.
Net cash used in investing activities was $813.8 million and $268.1 million for the nine months ended September 30, 2024 and 2023, respectively, and primarily consisted of capital expenditures on routine projects associated with overhauls and upgrades on various rigs and net cash paid related to the closing of the Diamond Transaction.
Net cash provided by financing activities was $331.9 million for the nine months ended September 30, 2024, and net cash used in financing activities was $254.8 million for the nine months ended September 30, 2023. The nine months ended September 30, 2024, included the issuance of an additional $824.0 million of 2030 Notes. We also repurchased 6.9 million of our Ordinary Shares for total of $250.0 million, made dividend payments to our shareholders of $198.2 million, and paid $57.2 million in taxes withheld on vested employee share-based compensation awards. The nine months ended September 30, 2023, included the repayment of the DSF Credit Facility in full, redemption of Noble Second Lien Notes, repayment of the New DNB Credit Facility, totaling $673.4 million, and the $600.0 million issuance of 2030 Notes. We also repurchased 2.0 million of our Ordinary Shares for total of $80.0 million and made dividend payments to our shareholders of $42.4 million.
At September 30, 2024, we had a total contract drilling services backlog of approximately $6.5 billion, which includes a commitment of 70% of available days for the remainder of 2024. For additional information regarding our backlog, see “Contract Drilling Services Backlog.”
Capital Additions
Capital additions totaled $374.3 million for the nine months ended September 30, 2024, and consisted of the following:
•$214.2 million for sustaining capital;
•$132.8 million in major projects, including subsea and other related projects; and
•$27.3 million for rebillable capital and contract modifications.
Our total capital additions estimate for the year ending December 31, 2024, net of reimbursements, is expected to range between $480 million and $510 million, of which approximately $300 million to $330 million is currently anticipated to be spent for sustaining capital. We expect to fund these capital additions with cash generated by our operations and cash on hand.
From time to time we consider possible projects and may have certain events, such as insured losses, that would require expenditures that are not included in our capital budget, and such unbudgeted expenditures could be significant. In addition, while liquidity and preservation of capital remains our top priority, we will continue to evaluate acquisitions of drilling units from time to time.
Dividends
Our most recent quarterly dividend, totaling approximately $81.6 million (or $0.50 per share), was declared on June 10, 2024, and paid on September 26, 2024, to shareholders of record at close of business on September 12, 2024.
On November 5, 2024, Noble’s Board of Directors declared an interim quarterly cash dividend on our Ordinary Shares of $0.50 per share. The $0.50 dividend is expected to be paid on December 19, 2024, to shareholders of record at close of business on December 5, 2024.
The declaration and payment of dividends require authorization of the Board of Directors, provided that such dividends on issued share capital may be paid only out of the Company’s “distributable reserves” as determined by reference to relevant
statutory accounts in accordance with English law. The Company is not permitted to pay dividends out of share capital, which includes share premiums. The payment of future dividends will depend on our results of operations, financial condition, cash requirements, future business prospects, the availability of sufficient distributable reserves, contractual and indenture restrictions, and other factors deemed relevant by the Board of Directors.
Share Repurchases
On October 22, 2024 the Board of Directors approved a share repurchase program of up to $400 million commencing immediately after completion of the prior $400 million share repurchase. All shares purchased under the share repurchase programs are cancelled. The share repurchase programs take place within the limitations of the general authority previously granted by shareholders, or any authorization to be granted at a future general meeting of the Company. As of the date hereof, the repurchase programs do not have fixed expirations, and may be modified, suspended or discontinued at any time. The programs do not obligate the Company to acquire any particular amount of shares.
Condensed Consolidating Financial Information
The indenture governing the 2030 Notes contains a covenant that requires Noble Finance II to furnish to holders of the 2030 Notes certain financial information relating to Noble Finance II and its restricted subsidiaries. The indenture governing the Diamond Second Lien Notes contains a covenant that requires Noble Offshore Drilling, Inc. (or “NODI”, formerly Diamond Offshore Drilling, Inc.) to furnish to holders of the Diamond Second Lien Notes certain financial information relating to NODI and its subsidiaries.
The summarized financial information below reflects combined accounts of Noble Finance II, NODI, and all other subsidiaries of Noble. The financial information is presented on a combined basis and intercompany balances and transactions between entities have been eliminated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Noble Corporation plc and Subsidiaries |
| | Unaudited Condensed Consolidating Selected Financials |
| | September 30, 2024 |
| | | | | | | | | | |
| | Consolidated Noble Finance II LLC | | Consolidated Noble Offshore Drilling, Inc. (1) | | Other Non-guarantor Subsidiaries of Noble | | Consolidating Adjustments | | Total |
Balance Sheets | | | | | | | | | | |
Cash and cash equivalents | | $ | 211,596 | | | $ | 179,801 | | | $ | 461 | | | $ | — | | | $ | 391,858 | |
Total current assets | | 1,568,804 | | | 455,946 | | | 87,087 | | | (701,146) | | | 1,410,691 | |
Total current liabilities | | 588,894 | | | 298,270 | | | 1,260,549 | | | (1,247,248) | | | 900,465 | |
Total debt | | 1,401,271 | | | 1,171,316 | | | — | | | (591,350) | | | 1,981,237 | |
Total shareholders' equity | | 4,469,705 | | | 864,444 | | | 4,216,892 | | | (4,866,092) | | | 4,684,949 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Noble Corporation plc and Subsidiaries |
| | Unaudited Condensed Consolidating Selected Financials |
| | Nine Months Ended September 30, 2024 |
| | | | | | | | | | |
| | Consolidated Noble Finance II LLC | | Consolidated Noble Offshore Drilling, Inc. (1) | | Other Non-guarantor Subsidiaries of Noble | | Consolidating Adjustments | | Total |
Statements of Operations | | | | | | | | | | |
Operating revenues | | $ | 2,035,977 | | | $ | 94,380 | | | $ | 2,544 | | | $ | (2,424) | | | $ | 2,130,477 | |
Operating costs and expenses | | 1,533,046 | | | 95,246 | | | 69,196 | | | — | | | 1,697,488 | |
Depreciation and amortization | | 275,990 | | | 11,357 | | | — | | | — | | | 287,347 | |
| | | | | | | | | | |
Statements of Cash Flows | | | | | | | | | | |
Net cash provided by (used in) operating activities | | $ | 611,988 | | | $ | (8,887) | | | $ | (83,840) | | | $ | — | | | $ | 519,261 | |
Capital expenditures | | (423,892) | | | (10,562) | | | (199) | | | — | | | (434,653) | |
Proceeds from disposal of assets, net | | (690) | | | 5,575 | | | — | | | — | | | 4,885 | |
Dividend payments | | — | | | — | | | (198,150) | | | — | | | (198,150) | |
(1)Consolidated Noble Offshore Drilling, Inc. from merger effective date on September 4, 2024.
Critical Accounting Estimates
We prepare our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures of contingent assets and liabilities. We disclose our significant accounting policies in “Note 1— Organization and Significant Accounting Policies” to our audited consolidated financial statements included in Part II, Item 8 of our Form 10-K.
For information about our critical accounting policies and estimates, see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Form 10-K. As of September 30, 2024, there have been no material changes to the judgments, assumptions, and estimates upon which our critical accounting policies and estimates are based.
See Part I, Item 1, Financial Statements, “Note 3 — Accounting Pronouncements,” to the unaudited condensed consolidated financial statements for a description of the recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There has been no significant change in our exposure to market risk when compared to those disclosed in Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in our Form 10-K.
Item 4. Controls and Procedures
Conclusions Regarding Disclosure Controls and Procedures
Robert W. Eifler, President and Chief Executive Officer (Principal Executive Officer) of Noble, and Richard B. Barker, Executive Vice President and Chief Financial Officer (Principal Financial Officer) of Noble, have evaluated the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. On the basis of this evaluation and, as a result of the material weakness in internal control over financial reporting as described below, Mr. Eifler and Mr. Barker have concluded that Noble’s disclosure controls and procedures were not effective as of September 30, 2024.
Previously Reported Material Weakness
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
As disclosed in our Form 10-K, we previously identified a material weakness in the Company’s internal control over financial reporting as the Company did not design and maintain effective controls over certain information technology general controls for an information system that is relevant to the preparation of Noble’s consolidated financial statements. Specifically, the Company did not design and maintain (i) program change management controls to ensure that program and data changes are identified, tested, authorized, and implemented appropriately and (ii) user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel.
The material weakness described above did not result in a misstatement to our annual or interim consolidated financial statements. However, the material weakness could result in a misstatement of our financial statement accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
Remediation Plan
Noble is committed to the planning and implementation of remediation efforts to address the material weakness described above. As of the end of the third quarter of 2023, we completed the design and implementation of controls related to (i) program change management controls to ensure that program and data changes are identified, tested, authorized, and implemented appropriately and (ii) user access controls to ensure appropriate segregation of duties and to adequately restrict user and privileged access to appropriate personnel. While we have completed the design and implementation of these controls, certain controls have not operated effectively for a sufficient period of time to demonstrate the material weakness has been remediated. Therefore, the remediation plan includes the continued operation of the newly designed and implemented controls.
Noble is working to remediate the material weakness by executing the measures outlined above, and we believe the measures described above will remediate the material weakness and strengthen our internal control over financial reporting. This material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded through testing that the controls are operating effectively.
The actions that we are taking are subject to ongoing senior management review as well as Audit Committee oversight. As we continue to monitor the effectiveness of our internal control over financial reporting in the area affected by the material weakness, we will perform additional procedures, including the use of manual mitigating control procedures where necessary, and plan to employ any additional resources deemed necessary to provide assurance that our financial statements continue to be fairly stated in all material respects. As we continue to evaluate and work to improve our internal control over financial reporting, management may execute additional measures to address potential control deficiencies or modify the remediation plan described above. Management will continue reviewing and making necessary changes to our internal controls' overall design.
Changes in Internal Control Over Financial Reporting
Other than as described above, there were no changes in Noble’s internal control over financial reporting that occurred during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of Noble.
Limitations on the Effectiveness of Controls
Internal control over financial reporting includes the controls themselves, monitoring (including internal auditing practices), and actions taken to correct deficiencies as identified. There are inherent limitations to the effectiveness of internal control over financial reporting, however well designed, including the possibility of human error and the possible circumvention or overriding of controls. The design of an internal control system is also based in part upon assumptions and judgments made by management about the likelihood of future events, and there can be no assurance that an internal control will be effective under all potential future conditions. As a result, even an effective system of internal controls can provide no more than reasonable assurance with respect to the fair presentation of financial statements and the processes under which they were prepared.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is presented in “Note 10 — Commitments and Contingencies,” to our unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q and is incorporated herein by reference.
Item 1A. Risk Factors
There are numerous factors that affect our business and results of operations, many of which are beyond our control. You should carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our Form 10-K for the year ended December 31, 2023, as well as “Item 1A Risk Factors” in Part II of our Form 10-Q for the quarter ended June 30, 2024, each of which contains descriptions of significant risks that might cause our actual results of operations in future periods to differ materially from those currently anticipated or expected. There have been no material changes from the risk factors disclosed in our Form 10-K for the year ended December 31, 2023, and Form 10-Q for the quarter ended June 30, 2024, except for the risk factor titled “Failure to complete the Diamond Transaction in a timely manner or at all could have adverse effects on the market value, trading price, and/or the future business results and financial condition of Noble,” which is no longer relevant.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Exercises of Warrants
During the three months ended September 30, 2024:
•71,314 Ordinary Shares were issued to holders of our Tranche 1 Warrants pursuant to exercises of 115,265 Tranche 1 Warrants; and
•55,098 Ordinary Shares were issued to holders of our Tranche 2 Warrants pursuant to exercises of 109,690 Tranche 2 Warrants.
•No Ordinary Shares were issued to holders of our Tranche 3 Warrants pursuant to exercises of 45 Tranche 3 Warrants.
Such Ordinary Shares were issued pursuant to the exemptions from the registration requirements of the Securities Act under Section 4(a)(2) under the Securities Act or Section 1145 of the Bankruptcy Code. For more information on the terms of exercise and other features of the warrants, see our Form 10-K.
Share Repurchases
The following table presents information about our purchases of equity securities for the three months ended September 30, 2024:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Period | | Total Number of Shares Purchased (1) | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of a Publicly Announced Plans or Programs (1) | | Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs (1) |
July 1 - 31, 2024 | | — | | | $ | — | | | — | | | $ | 290,174,049 | |
August 1 - 31, 2024 | | 1,166,493 | | | $ | 37.90 | | | 1,166,493 | | | $ | 245,944,484 | |
September 1- 30, 2024 | | 5,771,635 | | | $ | 35.63 | | | 5,771,635 | | | $ | 40,174,211 | |
Total | | 6,938,128 | | | | | 6,938,128 | | | $ | 40,174,211 | |
(1)On November 2, 2022, we announced a share repurchase plan authorizing us to purchase up to $400 million of outstanding Ordinary Shares or Warrants, subject to restrictions under applicable law discussed in “Note 4 — Income (Loss) Per Share” to our unaudited condensed consolidated financial statements. The $400 million authorization does not have a fixed expiration, and may be modified, suspended, or discontinued at any time. The program does not obligate us to acquire any particular amount of shares. During the three months ended September 30, 2024, we repurchased 6,938,128 of our Ordinary Shares. All repurchased shares were subsequently cancelled.
Item 5. Other Information
Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act. During the three months ended September 30, 2024, no such plans or other arrangements were adopted, terminated or modified.
Item 6. Exhibits
The following exhibits are filed as part of this Quarterly Report on Form 10-Q.
Index to Exhibits
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Exhibit Number | | Exhibit |
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2.1† | | |
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2.2 | | |
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2.3† | | |
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3.1 | | |
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4.1 | | |
| | |
4.2 | | Supplemental Indenture, dated as of September 4, 2024, by and among Diamond Foreign Asset Company and Diamond Finance, LLC, as issuers, Diamond Offshore Drilling, Inc., as existing company, Dolphin Merger Sub 2, Inc., as new company, and HSBC Bank USA, National Association, as trustee and collateral agent (filed as Exhibit 4.1 to the Noble Corporation plc’s Current Report on Form 8-K filed on September 4, 2024 and incorporated herein by reference). |
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10.1* | | |
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10.2* | | |
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31.1 | | |
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31.2 | | |
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32.1+ | | |
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32.2+ | | |
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101.INS | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH | | Inline XBRL Taxonomy Extension Schema Document. |
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101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
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Exhibit Number | | Exhibit |
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101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
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101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document. |
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101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
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104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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* Management contract or compensatory plan or arrangement.
† Certain portions of the exhibit have been omitted. The Company agrees to furnish a supplemental copy with any omitted information to the SEC upon request.
+ Furnished in accordance with Item 601(b)(32)(ii) of Regulation S-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Noble Corporation plc, a public limited company formed under the laws of England and Wales
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/s/ Richard B. Barker | | November 6, 2024 |
Richard B. Barker Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | Date |
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/s/ Jennifer Yeung | | November 6, 2024 |
Jennifer Yeung Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) | | Date |