Last updated on April 17, 2014 at 1:21 EDT

Noble Corporation Reports First Quarter 2012 Earnings of $0.47 per Diluted Share

April 18, 2012

ZUG, Switzerland, April 18, 2012 /PRNewswire/ — Noble Corporation (NYSE: NE) today reported first quarter 2012 earnings of $120 million, or $0.47 per diluted share, versus $127 million, or $0.50 per diluted share, for the fourth quarter of 2011. Earnings for the first quarter of 2011 were $54 million, or $0.21 per diluted share. Contract drilling services revenues for the first quarter of 2012 were $746 million versus $720 million for the fourth quarter of 2011 and $543 million in the first quarter of 2011.

David W. Williams, Chairman, President and Chief Executive Officer of Noble Corporation, stated, “Our performance in early 2012 includes a number of noteworthy achievements that are expected to position the Company for improving financial results over the course of 2012 and beyond.

“Relating to our fleet transformation program, the ultra-deepwater drillships Noble Bully I and Noble Bully II commenced their initial contracts in the U.S. Gulf of Mexico and Brazil, respectively, while the ultra-deepwater drillship Noble Globetrotter I arrived in the U.S. Gulf of Mexico and is currently completing the client acceptance and commissioning process before beginning its 10-year contract, expected in late April 2012.

“Also, available days in 2012 on our ultra-deepwater semisubmersible Noble Jim Day were significantly reduced following a series of contract awards at sequentially higher dayrates. In addition, contracts were awarded for the deepwater semisubmersibles Noble Homer Ferrington, Noble Max Smith, and Noble Amos Runner. These contract awards, which reflect significant dayrate improvement, are evidence of the strong fundamental environment that is driving client demand for deepwater rigs.

“Finally, we successfully completed a $1.2 billion issuance of five, ten and 30 year notes at an average annual coupon of 4.1%, providing the Company with a solid base of liquidity to support our fleet transformation efforts.”

Debt as a percentage of total capitalization increased slightly to approximately 35% at March 31, 2012, from 33% at December 31, 2011. Capital expenditures in the first quarter of 2012 totaled $368 million, including $133 million (excluding capitalized interest) related to Noble’s fleet transformation program. The Company continues to expect capital expenditures for 2012 to total an estimated $1.9 billion, including approximately $650 million for newbuild construction programs.

Operations Highlights

At the end of the first quarter of 2012, approximately 73% of the Company’s available rig operating days were committed for the remainder of 2012, including 77% of the floating rig fleet and 75% of the jackup fleet. For 2013, an estimated 51% of operating days are committed, including 74% of the floating rig days and 42% of jackup days. Total backlog at March 31, 2012 was approximately $14.5 billion, up from $13.7 billion at December 31, 2011.

Contract drilling services revenues totaled $746 million in the first quarter of 2012, up approximately 4% from revenues of $720 million in the fourth quarter of 2011. The improvement was due largely to reduced downtime, especially among the Company’s floating rigs operating offshore the U.S. Gulf of Mexico and Brazil, as well as improved dayrates, mobilization fees and incentive bonuses. The revenue improvement was partially offset by lower fleet utilization, which totaled 74% in the first quarter of 2012 compared to 79% in the fourth quarter of 2011. The lower utilization resulted primarily from several rigs completing planned shipyard maintenance and others transitioning between contracts.

In the U.S. Gulf of Mexico, deepwater drilling activity continued to increase, with many operators now moving forward with exploration, appraisal and development drilling programs slowed by the pace of drilling permits in 2010 and 2011. The increase in activity has led to a shortage of available floating rigs, leading to improving dayrates. The Company recently contracted the conventionally moored, deepwater semisubmersible Noble Amos Runner at a dayrate of $460,000, up from a previous dayrate of $360,000. The rig is now committed into late 2013. Availability in 2012 for the ultra-deepwater semisubmersible Noble Jim Day has been reduced to approximately 120 days following the award of a series of short-term drilling assignments, the latest at a dayrate of $605,000.

In Mexico, utilization of the Company’s 12 jackup rigs declined to 64% in the first quarter of 2012 from 84% in the fourth quarter of 2011 due primarily to idle time on the Noble Bill Jennings and Noble Sam Noble, which entered shipyards to complete required maintenance and inspections before commencing new contracts, and the Noble Leonard Jones, which sustained damage while under tow to a new location. At present, 10 of the Company’s jackups are under contract, while opportunities are under review to return the remaining two units to work.

Opportunities continue to develop in Brazil as some international operators execute plans to add deepwater rigs into the region. The deepwater semisubmersible Noble Max Smith was awarded a contract for up to three years that is expected to commence in December 2012, following a planned shipyard program and mobilization. The dayrate on the new contract is $407,000, plus a 15% bonus opportunity, up from $380,000 on the previous contract. We expect operators to mobilize additional rigs to Brazil in 2012 and beyond to explore the region’s vast hydrocarbon potential.

In the North Sea, the Company’s eight jackup rigs remain fully utilized, with some customers now focused on securing rig commitments into late 2013. The jackup rig Noble George Sauvageau was recently awarded a one-year contract at a dayrate of $140,000, up from $115,000 on the current contract and representing a market-leading dayrate for units with standard capabilities. The rig is now committed through 2013, bringing the total to five units with contract commitments into 2013. In addition, the Company’s semisubmersible Noble Ton van Langeveld was recently awarded a two-year contract at a dayrate of $275,000, increasing from $247,500 on its current contract. The rig is now under contract into late 2014.

The Company’s 15-rig jackup fleet operating in the Middle East experienced utilization of 75% in the first quarter of 2012 compared to 87% in the fourth quarter of 2011, with 13 of the 15 units currently under contract. Three rigs, the Noble Gus Androes, Noble Chuck Syring and Noble Charles Copeland, entered shipyards during the quarter, while the Noble George McLeod was idle in the period. A total of 10 jackups are committed through 2012. Standard jackup rig needs continue to develop in Saudi Arabia, while other areas in the region display stable to modestly higher demand.

In closing, Williams stated, “A new, more modern and versatile fleet of mobile offshore drilling rigs is beginning to take shape at Noble as we deliver and place into service our ultra-deepwater drillships and high-specification jackups. These new, more efficient rigs will address a growing and more technically challenging list of client needs into the future, and once all 14 projects are delivered, will place Noble’s among the industry’s premium fleets. Given the solid industry fundamentals and building client demand that is providing greater long-term visibility, especially in the ultra-deepwater sector, we are fortunate to have uncontracted newbuild capacity to offer clients, with three drillships and six high-specification jackups currently available following delivery from the shipyards. Client interest in each of these units is noticeably greater today than six months ago, and we believe it is increasingly likely that a number of these units will secure contracts before the close of 2012. Our decision to expand our fleet with new state-of-the-art capabilities was well-timed, and we will continue to evaluate further growth opportunities that offer exceptional returns.”

About Noble Corporation

Noble is a leading offshore drilling contractor for the oil and gas industry. Noble performs, through its subsidiaries, contract drilling services with a fleet of 79 offshore drilling units (including five ultra-deepwater rigs and six jackup drilling rigs currently under construction), located worldwide, including in the U.S. Gulf of Mexico, Mexico, Brazil, the North Sea, the Mediterranean, West Africa, the Middle East, India and the Asian Pacific. Noble’s shares are traded on the New York Stock Exchange under the symbol “NE.” Additional information on Noble Corporation is available on the Company’s Web site at http://www.noblecorp.com.

Conference Call

Noble has scheduled a conference call and webcast related to its first quarter 2012 results on Thursday, April 19, 2012, at 8:00 a.m. U.S. Central Daylight Time. Interested parties are invited to listen to the call by dialing 1-866-461-7129, or internationally 1-706-679-3084, using access code: 20607252, or by asking for the Noble Corporation conference call. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company’s Web site.

A replay of the conference call will be available on Thursday, April 19, 2012, beginning at 11:00 a.m. U.S. Central Daylight Time, through Thursday, May 3, 2012, ending at 5:00 p.m. U.S. Central Daylight Time. The phone number for the conference call replay is 1-855-859-2056 or, for calls from outside of the U.S., 1-404-537-3406, using access code: 20607252. The replay will also be available on the Company’s Web site following the end of the live call. The conference call may include non-GAAP financial measures. Noble will post a reconciliation of any such measures to the most directly comparable GAAP measures in the “Investor Relations” section of the Company’s Web site under the heading “Regulation G Reconciliations.”

Statements regarding financial performance, contract backlog, earnings, costs, capital expenditures, revenue, rig demand, fleet composition, condition or performance, shareholder value, timing of delivery of newbuilds, contract commitments, dayrates, contract commencements, contract extensions or renewals, letters of intent or award, industry fundamentals, customer relationships, future performance, growth opportunities, market outlook, as well as any other statements that are not historical facts in this release, are forward-looking statements that involve certain risks, uncertainties and assumptions. These include but are not limited to operating hazards and delays, risks associated with operations outside of the U.S., actions by regulatory authorities, customers and other third parties, legislation and regulations affecting drilling operations, compliance with regulatory requirements, costs and difficulties relating to the integration of acquired businesses, factors affecting the level of activity in the oil and gas industry, supply and demand of drilling rigs, factors affecting the duration of contracts, delays in the construction of newbuilds, the actual amount of downtime, factors that reduce applicable dayrates, violations of anti-corruption laws, hurricanes and other weather conditions, the future price of oil and gas and other factors detailed in the Company’s most recent Form 10-K, Form 10-Q’s and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.

                             NOBLE CORPORATION AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF INCOME
                          (In thousands, except per share amounts)

                                                                    Three Months Ended
                                                                         March 31,
                                                                       2012                2011
                                                                       ----                ----
                      Contract drilling services                   $746,310            $542,605
                      Reimbursables                                  35,141              22,291
                      Labor contract drilling services               16,008              13,547
                      Other                                             231                 445

                                                                    797,690             578,888
                                                                    -------             -------
     Operating costs
      and expenses
                      Contract drilling services                    420,011             306,363
                      Reimbursables                                  30,601              17,103
                      Labor contract drilling services                9,232               8,523
                      Depreciation and amortization                 171,077             158,122
                      Selling, general and administrative            23,126              23,715
                      Gain on contract extinguishments, net               -             (21,202)
                                                                    654,047             492,624
                                                                    -------             -------

     Operating income                                               143,643              86,264

     Other income
                      Interest expense, net of amount
                       capitalized                                  (10,496)            (19,041)
                      Interest income and other, net                  1,785               2,592

     Income before
      income taxes                                                  134,932              69,815
                      Income tax provision                          (21,589)            (15,359)

     Net income                                                     113,343              54,456
                                                                    -------              ------

                      Net loss attributable to noncontrolling
                       interests                                      6,832                  39
     Net income
      attributable to
      Corporation                                                  $120,175             $54,495
                                                                   ========             =======

     Net income per
                      Basic                                           $0.47               $0.22
                      Diluted                                         $0.47               $0.21

                                                 NOBLE CORPORATION AND SUBSIDIARIES
                                                    CONSOLIDATED BALANCE SHEETS
                                                           (In thousands)

                                                          March 31,                     December 31,
                                                                                   2012                       2011
                                                                                   ----                       ----
     Current assets
              Cash and cash equivalents                                      $208,840                   $239,196
              Accounts receivable                                             738,835                    587,163
              Prepaid expenses and other current
               assets                                                         306,998                    233,253

     Total current assets                                                   1,254,673                  1,059,612
                                                                            ---------                  ---------

     Property and equipment                                                15,371,823                 15,037,112
              Accumulated depreciation                                     (3,282,511)                (3,139,645)

     Property and equipment, net                                           12,089,312                 11,897,467
                                                                           ----------                 ----------

     Other assets                                                             551,216                    538,080
                                                                              -------                    -------
              Total assets                                                $13,895,201                $13,495,159

     Current liabilities
              Accounts payable                                               $335,276                   $436,006
              Accrued payroll and related costs                               111,251                    117,907
              Other current liabilities                                       234,630                    273,267
     Total current liabilities                                                681,157                    827,180
                                                                              -------                    -------

     Long-term debt                                                         4,444,161                  4,071,964
     Deferred income taxes                                                    240,341                    242,791
     Other liabilities                                                        306,175                    255,372
                                                                              -------                    -------
              Total liabilities                                             5,671,834                  5,397,307

     Commitments and contingencies

              Total shareholders' equity                                    7,498,868                  7,406,521
              Noncontrolling interests                                        724,499                    691,331
              Total equity                                                  8,223,367                  8,097,852

              Total liabilities and equity                                $13,895,201                $13,495,159

                                                          NOBLE CORPORATION AND SUBSIDIARIES
                                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                    (In thousands)
                                                                                 Three months ended
                                                                                      March 31,
                                                                                                     2012       2011
                                                                                                     ----       ----
     Cash flows from operating activities
                Net income                                                                      $113,343    $54,456
                Adjustments to reconcile net income to net cash
                 from operating activities:
                Depreciation and amortization                                                    171,077    158,122
                Gain on contract extinguishments, net                                                  -    (21,202)
                Other changes in operating activities                                           (180,712)  (104,602)
                Net cash from operating activities                                               103,708     86,774

     Cash flows from investing activities
                New construction                                                                (133,075)  (404,529)
                Other capital expenditures                                                      (161,243)  (143,634)
                Major maintenance expenditures                                                   (33,010)   (39,058)
                Capitalized interest                                                             (40,637)   (27,103)
                Other investing activities                                                      (127,393)    18,171
                Net cash from investing activities                                              (495,358)  (596,153)

     Cash flows from financing activities
                Draws from bank credit facilities                                                365,000    (40,000)
                Repayments of bank credit facilities                                          (1,190,000)         -
                Proceeds from issuance of senior notes, net of
                 debt issuance costs                                                           1,186,636  1,087,833
                Contributions from joint venture partners                                         40,000    396,000
                Payments of joint venture debt                                                         -   (693,494)
                Settlement of interest rate swaps                                                      -    (29,032)
                Par value reduction payments                                                     (36,370)   (34,920)
                Financing costs on credit facilities                                                   -     (2,835)
                Proceeds from employee stock transactions                                          2,479      2,337
                Repurchases of employee shares surrendered for
                 taxes                                                                            (6,451)    (5,700)
                Net cash from financing activities                                               361,294    680,189

                Net change in cash and cash equivalents                                          (30,356)   170,810
     Cash and cash equivalents, beginning of
      period                                                                                     239,196    337,871
                                                                                                 -------    -------
     Cash and cash equivalents, end of period                                                   $208,840   $508,681
                                                                                                ========   ========

                                                                                                                                  NOBLE CORPORATION AND SUBSIDIARIES
                                                                                                                           FINANCIAL AND OPERATIONAL INFORMATION BY SEGMENT
                                                                                                           (In thousands, except utilization amounts, operating days and average dayrates)

                                                             Three Months Ended March 31,                                        Three Months Ended December 31,
                                                             ----------------------------                                        -------------------------------
                                                                      2012                                         2011                                                    2011
                                                                      ----                                         ----                                                    ----
                                            Contract                                                                                            Contract                                                                  Contract
                                            Drilling                                                                                            Drilling                                                                  Drilling
                                            Services                                   Other           Total                                    Services                                   Other          Total           Services           Other          Total
                                            --------                                   -----           -----                                    --------                                   -----          -----           --------           -----          -----
     Operating revenues
     Contract drilling services                      $746,310                                $       -         $746,310                                   $542,605                               $      -       $542,605           $719,711        $     -        $719,711
     Reimbursables                                     34,702                                      439           35,141                                     21,604                                    687         22,291             18,046         (2,702)         15,344
     Labor contract drilling services                       -                                   16,008           16,008                                          -                                 13,547         13,547                  -         15,881          15,881
     Other                                                231                                        -              231                                        445                                      -            445                109              -             109
                                                          ---                                      ---              ---                                        ---                                    ---            ---                ---            ---             ---
                                                     $781,243                                  $16,447         $797,690                                   $564,654                                $14,234       $578,888           $737,866        $13,179        $751,045
                                                     ========                                  =======         ========                                   ========                                =======       ========           ========        =======        ========

     Operating costs and expenses
     Contract drilling services                      $420,011                              $         -         $420,011                                   $306,363                             $        -       $306,363           $382,562      $       -        $382,562
     Reimbursables                                     30,173                                      428           30,601                                     16,440                                    663         17,103             11,181         (2,539)          8,642
     Labor contract drilling services                       -                                    9,232            9,232                                          -                                  8,523          8,523                  -          8,559           8,559
     Depreciation and amortization                    167,948                                    3,129          171,077                                    154,888                                  3,234        158,122            169,574          1,612         171,186
     Selling, general and administrative               22,844                                      282           23,126                                     23,449                                    266         23,715             18,242            252          18,494
     (Gain) loss on contract extinguishment                 -                                        -                -                                    (21,202)                                     -        (21,202)                 -              -               -
                                                     $640,976                                  $13,071         $654,047                                   $479,938                                $12,686       $492,624           $581,559         $7,884        $589,443
                                                     ========                                  =======         ========                                   ========                                =======       ========           ========         ======        ========

     Operating income                                $140,267                                   $3,376         $143,643                                    $84,716                                 $1,548        $86,264           $156,307         $5,295        $161,602
                                                     ========                                   ======         ========                                    =======                                 ======        =======           ========         ======        ========

     Operating statistics
     Average Rig Utilization                               79%                                                                                                  62%                                                                      86%
     Operating Days                                     3,089                                                                                                2,381                                                                    3,386
     Average Dayrate                                  $90,382                                                                                              $80,866                                                                  $89,049

     Average Rig Utilization                               86%                                                                                                  69%                                                                      88%
     Operating Days                                     1,092                                                                                                  868                                                                    1,134
     Average Dayrate                                 $355,098                                                                                             $277,859                                                                 $318,013

     Average Rig Utilization                               51%                                                                                                  70%                                                                      50%
     Operating Days                                       285                                                                                                  361                                                                      277
     Average Dayrate                                 $278,693                                                                                             $301,647                                                                 $207,769

     Average Rig Utilization                               74%                                                                                                  61%                                                                      79%
     Operating Days                                     4,466                                                                                                3,610                                                                    4,797
     Average Dayrate                                 $167,124                                                                                             $150,294                                                                 $150,027
             (In thousands, except per share amounts)

     The following table sets forth the computation of basic
      and diluted net income per share:

                                                             Three months ended
                                                                 March 31,
                                                                              2012     2011
                                                                              ----     ----
     Allocation of net income
     Net income attributable to Noble
      Corporation                                                         $120,175  $54,495
     Earnings allocated to unvested
      share-based payment awards                                            (1,126)    (509)
                                                                            ------     ----
     Net income to common
      shareholders -basic                                                 $119,049  $53,986
                                                                          ========  =======

     Net income attributable to Noble
      Corporation                                                         $120,175  $54,495
     Earnings allocated to unvested
      share-based payment awards                                            (1,125)    (509)
                                                                            ------     ----
     Net income to common
      shareholders -diluted                                               $119,050  $53,986
                                                                          ========  =======

     Weighted average number of
      shares outstanding -basic                                            251,971  251,026
     Incremental shares issuable from
      assumed exercise of stock
      options                                                                  491      775
     Weighted average number of
      shares outstanding -diluted                                          252,462  251,801
                                                                           =======  =======

     Weighted average unvested share-
      based payment awards                                                   2,407    2,419
                                                                             =====    =====

     Earnings per share
     Basic                                                                   $0.47    $0.22
     Diluted                                                                 $0.47    $0.21

SOURCE Noble Corporation

Source: PR Newswire