Noble Corporation

Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Noble Corporation PLC fourth quarter 2021 results conference call. 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 at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. It is now my pleasure to turn today's call over to Mr. Craig Nearhead, Vice President of Investor Relations and Treasurer. Sir, please go ahead.

Thank you, Brent, and welcome everyone to Noble Corporation's fourth quarter and full year 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, and Richard Barker, Senior Vice President and Chief Financial Officer. Also joining are Blake Denton, Vice President, Marketing and Contracts, and Joey Kawaja, Vice President of Operations. For today's call, we will begin with prepared remarks, followed by a question and answer session. During the course of this call, we may make certain 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. including risks and uncertainties associated with our previously announced business combination with Maersk Drilling. Investors should carefully read our previous and ongoing disclosure with respect to such business combination, including in our press release issued yesterday and in our upcoming annual report on Form 10-K that will be filed with the SEC. 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 recently comparable GAAP measure and an associated reconciliation on our website. And with that, I'll now turn the call over to Robert Eifler, President and Chief Executive Officer of Noble.

Thanks, Craig. And thanks to everyone joining us on the call today. I'll kick off today with a recap of the key strategic milestones we achieved in 2021, followed by some commentary on our global operations in the rig market, before turning the call over to Richard to review our financial results for the quarter. The last year has been transformative for Noble. I'm proud to be a part of an organization that can execute a high-paced and challenging strategic plan such as the one we delivered in 2021. In February, Noble emerged from restructuring and quickly closed our acquisition of Pacific Drilling. Our stock was relisted on the New York Stock Exchange in early June, while the management team and board explored various strategic growth opportunities. In the second half of the year, our operations team successfully entered Norway, concurrent with the divestiture of four jackups in Saudi Arabia. To cap off 2021, we announced an historic agreement to combine Noble Corporation with Marist Drilling, which is on track to close mid 2022. This combination will create a world-class offshore driller with the youngest and highest spec fleet and a combined track record of industry-leading utilization. Together, our complementary cultures with unwavering commitments to safety, operational excellence, and customer satisfaction, will allow us to better serve our customers. We expect to realize $125 million in annual run rate synergies within the first two years after closing, which makes this combination accretive to both sets of shareholders. As a combined company, we will have a robust balance sheet to serve our best-in-class fleet, creating a strong platform for cashflow generation in today's offshore market and even further as the recovery continues. Beyond Noble, the broader offshore rig market made a remarkable recovery in 2021. After being written off for dead during the depths of the pandemic, ultra deep water market rates grew by over 50% in just the last three quarters of 2021, led primarily by fixtures in the US Gulf of Mexico. Commodity prices obviously supported the demand growth, and we expect offshore rigged demand to improve going forward in all market segments. On the back of strong cash flows, our customers drilling budgets are generally up by double digits in 2022 versus 2021, and project sanctioning in 2023 is on pace to be beyond pre-pandemic expectations. We expect 2022 to bring continued day rate improvement across market segments, as well as an increase in longer-duration programs in the UDW segment. With that as a backdrop, we will transition to some perspective on the global market, highlighting NOBLES activities in each region along the way. The U.S. Gulf of Mexico continues to lead the floater recovery in utilization and rate appreciation. Also, driven by elevated ultra-deepwater demand and limited rig availability, we have seen an increased operator preference to direct negotiate their programs as opposed to running open tenders. With respect to our activities, Noble currently operates four drill ships in the U.S. Gulf of Mexico, and we are very pleased to announce the continued relationship with Murphy on the Noble Stanley LaFosse through the exercise of two optional wells at $300,000 per day. We also look forward to commencing work for Quarter North Energy with the Noble Fay Kozak in the very near future. The U.S. Gulf of Mexico's continued strength presents a number of additional opportunities for us We are encouraged by ongoing discussions with customers around their forward plans in the basin. Dropping down to South America, the deepwater demand is largely located in two key regions, Guyana, Suriname, and Brazil. Let's visit Guyana and Suriname first. As many of you know, Noble has four drill ships operating in Guyana under a Commercial Enabling Agreement, or CEA, with ExxonMobil. We've recently received a conditional award of 7.4 rig years under that agreement, which continues to build on the collective value achieved through close collaboration between our two organizations. This value is further evidenced by the positive impact to the local community where Noble employs nearly 300 Guyanese nationals as one of several initiatives underway to benefit the communities in which we operate. To provide supporting detail, The award specifies the additional rig years are subject to government approvals and final project sanctions for the Yellowtail project and also reallocates the existing term evenly across all four rigs. Once the conditions are satisfied, the extended CEA will provide utilization visibility into the fourth quarter of 2025. As mentioned on previous calls, this agreement includes a periodic pricing adjustment mechanism that keeps day rates in line with current market conditions. In addition to the four CEA rigs for ExxonMobil, the noble Jerry D'Souza is preparing to mobilize to Suriname for its contract with APA Corp, where the work history between our two companies in the basin is expected to deliver exceptional drilling results. This legacy Pacific drilling rig has been upgraded with a second BOP and an MPD system, enhancing both its capabilities for this contract and its competitiveness against seventh generation drill ships for future drilling programs. Finally, as depicted in yesterday's fleet status report, we are grateful for the opportunity to drill a well in Guyana starting in the second quarter for Repsol using our jackup, the noble Regina Allen, which recently concluded its contract in neighboring Trinidad and Tobago for BHP. Further south, Brazil continues to play an important role in the deepwater segment with significant potential for demand growth. The potential demand is estimated to require as many as 10 incremental floaters in Brazil over the next several years, representing almost a 50% increase to the 21 floaters under contract there now. In West Africa, the deepwater market recovery lags the Americas as this key offshore basin was particularly impacted by the downturn. West Africa's active drill ship supply slid from over 25 in 2014 to as low as 5 in 2020, but indications of a demand recovery are emerging there too. the tendering activity increased through the fourth quarter with a bulk of opportunities in Ghana and Nigeria. Noble, both directly and through legacy Pacific drilling, possesses significant operational history on the continent and are actively competing there today. I would like to now offer a few thoughts on the harsh environment jack-up market, starting with the Norwegian continental shelf. Norway and the customers and suppliers operating there are at the forefront of technology and policy innovation to build a sustainable energy future in oil and gas. Going forward globally, the barrels with the lowest carbon intensity and lifting costs will be produced, and Norway's are among the lowest on Earth, making this a new and important part of Nobel's future. The Nobel-Lloyd-Nobel, a CJ-70 design jackup, began its first well in Norway for Equinor in the fourth quarter. This design of jack-up is the largest, most efficient, and operationally capable in the world. We expect our customers in Norway to continue to prefer these ultra-harsh jack-ups for shallow water projects, and even competing in the transition zone between shallow and mid-water. These rigs are more comparable to drill ships than jack-ups on several financial dimensions, including new build costs, maintenance, and operating costs, as well as premium day rates. we've signaled in previous quarters we acknowledge that 2022 will be a transitional year for demand in norway as the activity law created by the pandemic works through the pipeline of projects however the exercise options on the noble lloyd noble keep the rig working into 2023 and recent market announcements only bolster confidence in the norway market long term we look forward to serving equinor and new customers there as activity normalizes over the coming years Elsewhere in the North Sea, such as the UK, Danish, and Dutch sectors, rig demand remains steady. This region is highly competitive at present, with many drillers working hard to string together continuous work. Noble has four jackups currently located in the region, and we expect some idle time this year on the two uncontracted rigs. For the rest of the globe, Noble currently has operations in Australia and the Middle East. The Noble Tom Prosser continues to operate in Australia for our client Santos, who has now exercised three of its nine one-well options, keeping the rig busy into the fourth quarter of this year. We also remain hopeful to secure additional work in the Middle East on the Noble Mick O'Brien, which has spent the last three and a half years working for Qatar Gas. Lastly, in a challenging Southeast Asia deepwater market, the Noble Claude Boudreau has concluded its contract with Premier and mobilized to Malaysia. Despite the rig's great operational history, The inconsistent utilization and depressed rate environment prompt us to divest of the asset, and we are currently making plans to do so. In summary, market movements over the quarter are clear and strong indications of recovery, and we expect continued demand improvement across all market segments. Noble is focusing on executing on our strategic priorities and is well positioned to benefit from the recovery. I'll now turn the call over to Richard to provide an overview of our financial results and guidance.