Noble Corporation

Good morning. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to Noble Corporation's third quarter 2021 results conference call. If you have a question, please dial 1-888-330-2506. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. Craig Muirhead, Vice President, Investor Relations and Treasurer, may begin your conference.

Thank you, Julianne, and welcome everyone to Noble Corporation's third quarter 2021 earnings conference call. We appreciate your continued interest in the company. You can find a copy of Noble's earnings report issued yesterday evening along with the supporting statements and schedules on our website at noblecorp.com. Joining me today are Robert Eifler, President and Chief Executive Officer, Richard Barker, Senior Vice President and Chief Financial Officer. Also joining is Blake Denton, Vice President, Marketing and Contracts. For today's call, we will begin with prepared remarks followed by a question and answer session. During the course of the call, we may make forward looking statements regarding various matters related to our business and companies that are not historical facts. Such statements are based upon current expectations and assumptions of management, and are therefore subject to certain risks and uncertainties. Many factors could cause actual results to differ materially from these forward-looking statements, and Noble does not assume any obligation to update these statements. Please refer to our SEC filings for more information regarding our forward-looking statements, including the risks and uncertainties that could impact our future results. Also note, we are referencing non-GAAP financial measures in the call today. You will find the required supplemental disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation on our website. And with that, I will now turn the call over to Robert Eifler, President and Chief Executive Officer of Noble.

Thanks, Craig, and welcome and thank you to everyone joining us on the call today. I'll begin by highlighting several of our recent key accomplishments. and then provide some market commentary before turning the call to Richard to review our financial results for the quarter. In late October, the Noble Lloyd Noble began work in Norway for Equinor. By many measures, the Noble Lloyd Noble is one of the most capable jackups ever constructed and serves as the perfect platform for Noble's entry into Norway. This tremendous accomplishment required our team to overcome numerous challenges, including substantial COVID-related logistical issues, And I would like to express my appreciation to everyone who worked tirelessly to get the rig ready for work. I would also like to thank our customer, Equinor, for their support throughout the process. We look forward to a long partnership in Norway. Earlier this week, we closed the sale of four jackup rigs working in Saudi Arabia, which we expect will generate approximately $285 million of cash, net of transaction fees, expenses, and settlement of working capital. This transaction is accretive for our shareholders, bolsters our already strong balance sheet, and will better position Noble to execute on our strategic and financial priorities. I would again like to thank the employees working in our Saudi operation for their focus and professionalism during the transition period. The third quarter was also the first full quarter of activity for the former Pacific drilling rigs as part of the Noble fleet. These highly capable rigs are performing very well in the improving ultra-deepwater market, and I want to quickly walk you through some of the contracting success. The noble Fay Kozak, formerly Pacific Compton, recently completed its program with Petronas in Mexico and has mobilized to the U.S. Gulf for work with a number of different operators. We expect that rig to be fully committed through the end of 2022. The noble Stanley LaFosse, formerly Pacific Shirov, continues its work with Murphy in the U.S. Gulf of Mexico under a firm contract until June of 2022, with great opportunities for follow-on work. The noble Jerry D'Souza, formerly Pacific Santa Ana, is currently in Las Palmas preparing for its next job with APA Corp in Suriname, scheduled to start in early 2022. We are upgrading this rig to add a second BOP, as well as replacing the existing dual-gradient system with an integrated MPD system. We look forward to positioning the rig with these enhanced capabilities in one of the world's most prolific deepwater basins early next year. Turning to the market, oil prices remain stable through the third quarter and within a range that provides supportive economics for our customers' offshore projects. Global energy demand also continues to normalize from last year's pandemic-driven lows. On the back of these global macro improvements, the rig market has continued to show consistent signs of recovery throughout 2021, especially in the UDW segment. In the U.S. Gulf of Mexico, where four of our drill ships are working, floater day rates have surpassed the late 2019 peak. The market is now approaching $300,000 per day for the most capable drill ships, as evidenced by our most recent contract for the Noble Fay COSAC at $290,000 per day. The majority of contract durations remain short, with most new opportunities for one to two well programs, which has limited additional drill ship mobilizations to the fewer long-term programs. Leading indicators such as FIDs, investment levels, and operator conversations continue to support robust demand growth in the ultra-deepwater segment. Before moving on from the Gulf of Mexico, as previously reported, Our Noble Globetrotter II was impacted by Hurricane Ida and is currently in the shipyard undergoing repairs. We expect to be back in service by the end of the year, and Richard will provide some additional financial details in a moment. In South America, utilization and rates have increased quarter over quarter, and the deepwater fleet is fully contracted. Petrobras has year-to-date awarded almost 23 rig years of work, mostly in the form of multi-year contracts, with roughly half of those awards going to local contractors. Brazil continues to be a bright spot for future demand in the region with potential incremental demand from Petrobras as well as IOCs over the next several years. Our strongest position in South America is in the Guyana Suriname Basin where we currently have five high spec ultra deep water rigs under contract. Our operations in Guyana represent a great example of how a healthy and long term strategic customer partnership can enhance the level of service we can provide. Our scale in the region with four similar rigs working for the same customer creates a number of operational efficiencies, while the duration allows both parties to optimize the full capabilities of these drill ships. Moving to the North Sea, I would characterize the jackup market as steady, although tender activity has been strong since the last few weeks of the summer, mostly for 2022 programs. Supply continues to outpace demand, and each tender will be competitive. In Norway, we expect softness during 2022, but are fortunate that the Noble Lloyd Noble is contracted through the majority of the year with options that extend into late 2023. Summing up the North Sea, we expect activity and rates to reflect modest improvement in the near term, with demand in the Norway sector increasing from 2023 onwards. Overall, we expect a stable market for our jackup fleet and an improving market for floaters. We are encouraged by the activity levels for ultra-deep water floaters and the resulting day rate improvement, which we expect to contribute to improving results as we move through 2022. I will now turn the call to Richard to provide more details on our financial results and guidance.