Noble Corporation

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, again, press star and one. I would now like to turn the call over to Ian McPherson, Vice President of Investor Relations. You may begin.

Thank you, operator, and welcome everyone to Noble Corporation's first quarter 2025 earnings conference call. You can find a copy of our earnings report along with the supporting statements and schedules on our website at noblecorp.com. We will reference an earnings presentation that's posted on the investor relations page of our website. Today's call will feature prepared remarks from our president and CEO, Robert Eifler, as well as our CFO, Richard Barker. We also have with us Blake Denton, Senior Vice President of Marketing and Contracts. 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. Also note we are referencing non-GAAP financial measures on the call today. You can find the required supplemental disclosure for these measures including the most directly comparable gap measure and an associated reconciliation in our earnings report issued yesterday and filed with the SEC. Now, I'll turn the call over to Robert Eifler, President and CEO of Noble.

Thanks, Ian. Good day, everyone, and thank you for joining us as we present our results for the first quarter. I'll begin with financial and operational highlights from the first quarter, recent commercial activity, our perspective on the market, and then hand it over to Richard to cover the financials. As usual, I'll wrap up with closing remarks before we go to Q&A. In the first quarter, we delivered strong results with adjusted EBITDA of $338 million and free cash flow of $173 million. We continue to execute on our return of capital program, paying $80 million in dividends and repurchasing $20 million of shares during Q1. Yesterday, our board declared another 50 cent per share dividend for the second quarter of 2025. And I'm pleased to highlight that we have now surpassed $1 billion in combined dividends and buybacks since Q4 2022, including this quarter's announced dividend. On the integration front, our progress has been right on target. The Legacy Diamond fleet recently went live on Noble's ERP system ahead of schedule. positioning us to achieve our previously stated synergies of at least $100 million by the end of the year. We are also pleased to share a number of significant commercial and operational successes. As we announced yesterday, we have recently been awarded long-term contracts by two major oil companies comprising nearly 14 rig years of additional backlog across four rigs with a total revenue potential between $2.0 and $2.5 billion. First, the Noble Voyager and another 7G drill ship to be named were awarded four rig years each by Shell for operations in the U.S. Gulf. These contracts provide for a base day rate value of $606 million per rig, plus the potential to earn up to an additional 20% based on the operational performance of each rig. Voyager is expected to commence in mid-2026. and the second drill ship is slated to commence in Q4, 2027. And both contracts have four one-year options following the firm four-year term at mutually agreed day rates. As part of the shell contracts, we will be making certain upgrades to the rigs, including increasing the derrick hook load from 2.5 to 2.8 million pounds, adding a controlled mudline system, which is essentially an alternative approach to managed pressure drilling, installing active heave compensated cranes, and finally, installing closed-bust power system upgrades for reduced carbon footprint, all of which are intended to make these units among the most high-spec drill ships in the world for the remaining life of the assets. In total, these upgrades are expected to comprise $60 to $70 million of capex per rig, which we anticipate being spread among 2025, 26, and 27. So all in, we are incredibly happy to be awarded these landmark long-term contracts from Shell in a premier basin and look forward to getting started. Next, we've also recently been awarded strategic contracts from Total Energies and Suriname for two rigs, one 7G drill ship yet to be named and also the 6G semi-noble developer. The contract spans 16 wells per rig or approximately 1,060 days each. and are expected to commence between Q4 2026 and Q1 2027. Together, the firm revenue of the two contracts is $753 million, and the contracts allow for an additional $297 million in revenue tied to collective operational performance. There are also four one-well options available across both contracts. We don't have any significant capex associated with these programs. Again, we are immensely proud to be selected by Total for their marquee development program in Suriname, which affords us the opportunity to expand not only a very robust and longstanding relationship with Total, but also our comprehensive presence throughout the Guyana Suriname region, where we have been able to develop highly valuable basin scale and expertise. Each of these new long-term contracts in Suriname and the U.S. Gulf carries customary cost escalation provisions as well. We firmly believe that Noble shines brightest in long-term and collaborative relationships, and we look forward to delivering meaningful efficiency and risk management through these four new contracts. Based on an abundance of internal performance data and learning from across our fleet, We generally expect that, quote, normal operational performance on these contracts can yield a significant amount of incentive revenue capture. And we are booking an average across the four contracts of approximately 40% of the combined variable revenue components in our backlog, which we believe represents a reasonable estimate at this time. Although we can certainly envision realistic upsides to that through the course of the campaigns. These performance contracts provide a great alignment with our customers, enabling substantial economic upside to both parties as drilling efficiencies are realized. In other words, if we're getting paid at the high end of the range, everyone is happy. Now, turning to other new contracts and extensions. In Colombia, Petrobras has exercised an option for an additional 390 days on the Noble Discoverer at its existing day rate. which we expect will extend this campaign into August 2026. It keeps the discoverer well-positioned for additional development opportunities following the largest gas discovery in the history of Columbia. Additionally, we recently announced new short-term contracts for the Noble Viking, Noble Intrepid, and Noble Regina Allen, which are detailed in our earnings release and fleet status report. Combined, these 15 total rig years of new awards bringing our current backlog to $7.5 billion, which represents an increase of 30% since last quarter and marks the first crucial step in the significant backlog inflection that we have been anticipating and forecasting over our past couple of earnings calls. We are also eyeing several opportunities for additional contract awards to build on these recent bookings, and we'll look forward to bringing you more news on this front in the not-too-distant future. Now for a word on the markets more broadly. First thing I would say is that obviously throughout an incredible amount of market volatility recently across virtually all risk assets and commodities, throughout all this turmoil, not only has offshore drilling remained open for business, so too has our commercial pipeline remained very much intact as our customers around the world appear to remain engaged and active in sourcing their rig needs for 2026 and 2027. While we certainly see signs that our customer base is reacting to near-term oil prices by taking actions with their 2025 spending, it is very important to note that long-term strip pricing for Brent crude has remained in the mid to high 60s as the curve has flipped into contango. This is not a throwaway fact as it relates to long cycle offshore FID planning. We generally see that the middle part of the strip is the most relevant indicator for the economics of our business. And this price range in the mid 60s per barrel is only down by about $5 versus a year ago and still quite supportive of project economics in most cases. I would also note that over 90% of the 15 rig years worth of backlog we've just announced were signed after the April 2nd market correction. No one here is glib about the state of financial markets. And we are, of course, concerned like everyone else about looming tariff effects on global demand. But we also derive strength and stability from our alignment with a large swath of customers that have generally resilient capital programs and less twitchy planning factors when it comes to offshore projects. We still see a choppy spot market for deepwater and jackups throughout 2025 and into 2026. But we also believe the medium to long term fundamentals are actually enhanced by every month of curtailed investment and spare capacity unwind. Contracted UDW utilization has been flat, with total rig count having dipped only slightly from 100 rigs to 99 rigs since the time of our last earnings call, offset by a two-rig reduction in marketed supply, leaving marketed utilization essentially unchanged at 90%. We still expect this contracted rig count to sag a bit lower through the rest of this year, with an anticipated inflection sometime in 2026. Although admittedly, forecasting precision is definitely hampered right now. But again, we do have decent visibility for some additional work for our own fleet, which would support a materially improved contracted position by next year. In the meantime, recent contract awards indicate day rate resilience for high-end deepwater rigs firmly in the low to high 400s per day with long-term visibility, which we think is completely at odds with prevailing market pessimism. We remain committed to managing our costs in marginal idle capacity in a prudent manner. As a first mover in what is likely to become a broader scrapping cycle for uncompetitive idle assets, recall that we recently announced the disposal of our cold-stacked drill ships Meltem in Sirocco. We have now entered into a definitive agreement to sell these vessels in a manner intended to effectively retire them, and we expect to finalize this transaction mid-year. NOW, I'LL PROVIDE A LITTLE MORE COLOR ON THE STATUS AND OUTLOOK FOR OUR RIGS WITH NEAR-TERM MARKET EXPOSURE. IN THE U.S. GULF, THE NOBLE VALIANT HAS RECENTLY COMPLETED ITS CONTRACT AND THE NOBLE BLACK LINO IS DUE TO ROLL OFF CONTRACT IN JULY. WE ARE IN ACTIVE DISCUSSIONS WITH CUSTOMERS FOR BOTH OF THESE UNITS FOR A LIMITED AMOUNT OF 2025 JOBS AS WELL AS A LARGER 2026 OPPORTUNITY SET. WE WILL ALSO WORK TO FILL 2026 AVAILABILITY FOR THE RECENTLY COMMITTED Noble Voyager ahead of its Shell program, that rig is more likely to be warmstacked in 2025 as we prioritize the Valiant and Black Rhino for near-term jobs. Turning to our sixth gen rigs, our three D-class semis have a promising outlook, with the Developer and Discoverer both well-contracted in the Americas and the Deliverer looking well-aligned for multiple prospective contracts that are expected to start in 2026. In contrast, the Ocean Great White's near-term outlook is softer, and we anticipate the rig will be idled for the balance of the year following the conclusion of its campaign in the UK North Sea in late May. However, there are long-term programs worldwide that align with the rig's high-spec ultra-harsh capabilities with start dates in 2026 and 2027. Looking at our globetrotterships, We are still pursuing various intervention scopes globally and expect to have a clear outlook for these opportunities fairly soon. If it's not a green light scenario for both units, we would likely then move to a cold stack or retirement decision on one of the units. Lastly, with respect to the moored floaters Apex and Endeavor, which are scheduled to roll off contract this summer, We remain encouraged by a healthy amount of harsh environment P&A activity in the pipeline that is well aligned for both of these assets. Now on the jackups. The headwinds from the Saudi suspensions and day rate concessions continue to pressure the international benign environment jackup market. While the harsh jackup market where our fleet primarily competes has remained insulated from these specific dynamics. That said, there has been a recent downtick in demand in the southern North Sea of a couple of rigs, and we do expect softer utilization across our jackup fleet in 2025 compared to 2024. A recent bright spot has been the Intrepid's recent contract award from DNO, which will mark that rig's reentry into the Norwegian market, which is still relatively subdued, albeit ticking up a bit as we get back up to three of our CJ70 jackups contracted in the NCS. So with that, I'll pause here and turn it over to Richard now to discuss the financials.